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Oral Answers to Questions
(11 months, 4 weeks ago)
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Sir Mark Hendrick (Preston) (Lab/Co-op)
Sarah Champion (Rotherham) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The outstanding case load at Preston Crown court stood at 1,454 cases at the end of December 2022. We are taking action across the criminal justice system to bring the caseload down and improve waiting times for those who use our courts. We have ramped up the additional capacity, we have recently announced the continued use of 24 Nightingale courtrooms in this financial year, and we are investing a significant amount of funding in the criminal justice system.
Sir Mark Hendrick
The backlog of court cases means that victims of rape, sexual abuse and violent crime face years of delay in their fight for justice. The emotional burden of the trial and delays have led to victims dropping out of the process and feeling that they would be unwilling to engage again in future. That has happened to a Preston constituent of mine who, after five years, is still waiting for her court case. Does the Secretary of State believe that that is an acceptable state for the British justice system to be in?
Mike Freer
I appreciate, and I know that colleagues in the judiciary appreciate, the sensitivities around such cases. They will always do their best to bring vulnerable cases forward so that victims are seen as fast as possible. There can be a variety of reasons why cases are delayed. If the hon. Gentleman wishes to write to me with the specifics of the case, I can try to find out exactly what caused the delays.
Sarah Champion
The Government are likely to miss their own targets on reducing Crown court backlogs. Wait times for rape and sexual assault cases are at an all-time high. I have two Rotherham families who have been waiting years for access to court for corporate manslaughter cases, and countless victims of sexual abuse who do not know when they will get their day in trial. Thirteen years of erosion of our public services have led us to this point. What exactly will the Minister do to deal with the trauma that victims, survivors and their families in my constituency are facing with such waits? Their lives are on hold. What is he actually going to do today to address that?
Mike Freer
Sexual offences are an incredibly sensitive issue, and the hon. Lady is right to raise it. The Department is working with the judiciary to consider specialist support in several courts to ensure that such cases are brought forward in a faster manner. There can be a variety of reasons why cases are delayed. As I said to the hon. Member for Preston (Sir Mark Hendrick), if hon. Members write to me on specific cases, I can find out why they have been delayed. It can be for a variety of reasons and not just because of the general backlog.
We are dealing with the backlog. It was coming down before the Bar strike, which pushed it back up. In the meantime, we have increased the judiciary across all our courts by 10% in the last five years—we have recruited more than 1,000 judges this year and will recruit 1,000 next year—we have taken the cap off sitting days, and we have 24 Nightingale courts still in use. Those are the practical measures that we are taking to increase capacity.
Sir Desmond Swayne (New Forest West) (Con)
Might we learn from the experience of Rwanda’s Gacaca courts?
Mike Freer
I am not quite sure what to do with that question, Mr Speaker. If my right hon. Friend would like to write to me on the details of that particular court, I will see if there are any lessons we can learn from our Rwandan colleagues.
Siobhan Baillie (Stroud) (Con)
As part of reducing delays in family courts, we need substantial law reform, so I welcome the Department’s decision to refer financial remedy reform to the Law Commission for a review. The problem is causing dramatic delays, costs and uncertainty for thousands of families across the country. Baroness Deech and I are holding an event in the House of Lords next month with Mr Justice Mostyn and Baroness Shackleton. Will the Ministry of Justice ensure that it is represented at that meeting so that it can listen, learn and ensure that we get some changes?
Mike Freer
We appreciate all the issues raised by my hon. Friend, who has been a long-term campaigner on family law. I guarantee that either a senior official or a Minister will attend that meeting.
Alex Cunningham (Stockton North) (Lab)
We have heard the human cost of the Government’s policies, but I have had the pleasure of facing several—four or perhaps five—Justice Ministers across the Dispatch Box who claimed they would sort out the courts backlog. They have all failed. Contrary to what the Minister said, Crown court cases increased by 6% on the previous year in February: up 3,500 to nearly 61,000. Magistrates court cases were up 1,600 to more than 345,000. President of the Law Society Lubna Shuja has said:
“The data cuts through the rhetoric and clearly shows that delays in the criminal justice system aren’t coming down anytime soon.”
What new rhetoric does the Minister have today?
Mike Freer
I thank the hon. Gentleman for not asking a question about Common Platform, which makes a refreshing change. On the issue of reducing the backlog, it is not rhetoric—these are facts. The outstanding case load—
Mike Freer
The outstanding case load is coming down from the impact of the Criminal Bar Association—
Mike Freer
Well, if the hon. Gentleman waits until the figures are published at the end of June, he will see that the case load is coming down. I repeat: this is not rhetoric. These are facts. More judges this year, more judges next year, more money in the criminal justice system for legal aid, Nightingale courts, uncapped sitting days—these are practical measures that will improve access to justice.
Mike Freer
Well, they are working. The hon. Gentleman will not want to admit it, but if he waits to see the facts when they are published, I hope he will then realise that we are taking tangible action to improve the capacity of our courts.
Mr Speaker
Don’t forget that Chorley court is still empty—we’ll take the capacity problems that Preston has.
Dean Russell (Watford) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Ingeniously done, Mr Speaker.
The successful delivery of the pledge to recruit 20,000 additional police officers is good news for victims, good news for the rule of law and bad news for criminals. It is already contributing to more offences being investigated and charged and more offenders being brought to justice in our courts.
Dean Russell
For the past two years, I have had the privilege of attending the Josh Hanson memorial football tournament at the Watford football club training ground. Josh Hanson sadly lost his life at the age of 21 to knife crime. The Josh Hanson Trust, set up by Josh’s mum, Tracey, and her family, provides support for those who have lost loved ones to violent crime, and Tracey’s story is heart-breaking and inspirational in equal measure. What steps will my right hon. and learned Friend take to ensure that victims and their families are supported throughout the criminal justice process and that their voices are heard loudly and acted upon, so that justice can be served?
Alex Chalk
I am so grateful to my hon. Friend for highlighting the brilliant work of Tracey Hanson and the Josh Hanson Trust, which supports those who have lost loved ones to violent crime. Josh’s death was an appalling tragedy. Improving victims’ experience of the criminal justice system is a core mission of this Government. Our Victims and Prisoners Bill, which had its Second Reading just yesterday, will ensure that the public and victims are better protected and can have greater confidence in the system, placing the principles of the victims code on to the face of the Bill, which will make sure what victims can and should expect from the criminal justice system.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As the Secretary of State just said, the additional police officers will lead to more court cases, but as we heard from the previous exchange, there is a huge backlog, which the Public Accounts Committee has looked at. When our Committee challenged his Department’s officials on this issue, we were not convinced that there has been proper planning for how those additional cases will be managed on top of the existing court backlog. Can he give us any up-to-date reassurance?
Alex Chalk
I thank the hon. Lady for the important work she does. These are relevant questions. It is important to understand that 90% of all criminal cases take place in the magistrates court, and because of the enormously good work that they did, any meaningful backlogs had been eroded by the end of 2020. She is right in respect of the Crown court—there are pressures—but as has been indicated, we are keeping 24 Nightingale courts open, increasing the amount of judicial recruitment and ensuring that victims are supported through the process. We now have 700 independent sexual violence advisers, which did not exist as little as 13 years ago, to ensure that as people wait for trials to begin, they are properly supported through the system.
Layla Moran (Oxford West and Abingdon) (LD)
The Minister of State, Ministry of Justice (Edward Argar)
As the Minister for Victims, I am committed to ensuring that victims are supported in seeking justice through the criminal justice system where they choose to do so. I most recently spoke with ministerial colleagues about the use of NDAs in the context of discussions around tackling violence against women and girls.
Layla Moran
I thank the Minister for his response, but non-disclosure agreements and gagging clauses are endemic. They are used almost unthinkingly by businesses, political parties and even schools in cases of harassment, bullying and discrimination. They silence victims, prevent them from accessing vital services, and serve only to disempower. In the Victims and Prisoners Bill, we have a golden opportunity to ban them once and for all, so I thank the Minister for his words in yesterday’s debate and his offer of a meeting for Members, but would he consider meeting the victims so that he can hear at first hand the effect that these insidious things have on the victims themselves?
Edward Argar
As the hon. Lady will be aware, we have legislated to prevent higher education providers from using NDAs in cases of sexual abuse, harassment or misconduct, or other forms of bullying or harassment. The Government held a thorough consultation on the misuse of NDAs between workers and their employees, and we are planning our next steps carefully. As the hon. Lady alluded to, I listened carefully to her speech yesterday, and in that context agreed to meet with her and other Members. I am always willing to meet with victims, but given the cross-cutting nature of this issue across many Government Departments, it is probably most useful if I meet with her in the first instance and we take things from there.
Patrick Grady (Glasgow North) (SNP)
Chris Stephens (Glasgow South West) (SNP)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
The Illegal Migration Bill will break the business model of ruthless people-smuggling gangs, deter migrants from making dangerous channel crossings, and restore fairness to our asylum system. The Bill provides a robust but fair legal framework to remove illegal migrants swiftly while ensuring the proper opportunity to appeal remains. I am working closely with colleagues on the implementation of the Bill.
Patrick Grady
Access to justice is a basic human right, and judicial review is a particularly vital safeguard against unlawful state decision making, so why are the Government blocking the opportunities for judicial review in the Illegal Migration Bill? Does that not reflect a Government who are perhaps not so confident about the actual legality of the Bill?
Alex Chalk
No, absolutely not. Access to justice is at the heart of the Bill, and indeed we make sure that where it is necessary, people can have the legal advice to make those points. But the hon. Gentleman’s question is a little rich in circumstances where the SNP seems hellbent on getting rid of jury trials in some of the most significant cases. We are absolutely clear that juries are the lamp of our liberty. We will not be getting rid of them—why is the hon. Gentleman so keen to do so?
Chris Stephens
In relation to that answer, as Lord Reed set out clearly in the Supreme Court in 2017, the principle of “unimpeded access” to the courts is a right that can be traced all the way back to Magna Carta. How will the courts be able effectively to uphold the rule of law if the UK Government use legislation to shut off legal avenues for judicial review?
Alex Chalk
Respectfully, the hon. Gentleman may not have quite read the entirety of the Bill, which makes it clear that in appropriate cases where there is an imminent risk of serious and irreversible harm, there will be the opportunity to make those points. He mentions Magna Carta; Magna Carta also includes the right to be tried by a jury of one’s peers, which he apparently wants to get rid of. I am interested to note that one of the most effective critics of that proposal was none other than the most eminent Scottish jurist Lord Hope of Craighead.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I start by congratulating the new Justice Secretary on his appointment: he has always come across as a measured and principled parliamentarian, and someone who is very serious about the rule of law. But what better way to trash that hard-earned reputation than by penning a joint opinion piece with the Home Secretary in defence of the outrageous Illegal Migration Bill, which blatantly trashes four international rights conventions and which the Law Society itself has warned has serious implications for the UK’s standing as a country that upholds the rule of law? Why is the Justice Secretary defending the Home Secretary instead of the rule of law?
Alex Chalk
The rule of law is absolutely essential to who we are as a nation. It does mean, on the one hand, that no one should be mightier than the law and we should all be accountable equally before it, but it also means that where there are those who break the law—I pause to note that arriving illegally in the UK has been against the law for decades—there must be consequences. If there are not, the rule of law is brought into disrepute. That would be bad for our country and, indeed, for the international rules-based order.
Nadia Whittome (Nottingham East) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I am looking carefully at the full range of the Department’s work before setting out plans in detail.
Nadia Whittome
The Human Rights Act 1998 is an essential piece of legislation that protects us all from abuses of power, yet the Bill of Rights Bill proposes to scrap it, weakening human rights protections in UK law and making it harder for people to hold the Government and other public bodies to account. If the Minister will not answer my question about the Bill’s future, can he at least commit to keeping the Human Rights Act on the statute book?
Alex Chalk
Human rights are important. I refer the hon. Lady to the answer I gave a few moments ago.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I have already welcomed the Lord Chancellor to his position. He will know that, “If it ain’t broke, don’t fix it” is not a legal maxim, but it is still a sound one that may apply in this case. If it were thought necessary to make changes to the human rights regime in this country, perhaps the report of Sir Peter Gross offers a better way forward, but does he also agree that his Department’s important priorities are those that affect people’s day-to-day lives in their interactions with the justice system? Ensuring that we have fully efficient and working court systems and an efficient and human prison system may therefore be higher priorities. Perhaps meeting the Bar Council and the Law Society to iron out the remaining matters from the Bellamy review and ensuring that we have a proper prison workforce strategy, rather than legislating, may therefore be his best priorities—
Alex Chalk
My hon. Friend makes powerful points, and they are borne very much in mind.
Ellie Reeves (Lewisham West and Penge) (Lab)
I welcome the Justice Secretary to his place. Positive obligations are a cornerstone of the Human Rights Act 1998. They mean that the state must protect as well as refrain from restricting our rights. The victims of the black cab rapist John Worboys used these obligations to hold the police to account for failing to properly investigate more than 105 alleged rapes and sexual assaults perpetrated by him. How can this Government be trusted on ending violence against women and girls when the previous Justice Secretary, the right hon. Member for Esher and Walton (Dominic Raab) wanted to rip up that Act and those obligations? Will the new Justice Secretary commit himself to protecting them and the rights they give to victims?
Alex Chalk
The rights that the hon. Lady refers to derive from the European convention on human rights: the right to life, the privilege against torture and inhumane or degrading treatment, the right to a fair trial, the right to a family life, and so on. Those stand apart from the Human Rights Act, but she is correct to say that they are important rights. The only thing I would take issue with is where she talks about violence against women and girls. It is the Conservative party that made coercive and controlling behaviour a criminal offence—Labour did not. It is this party that made stalking a criminal offence—Labour did not. It is this party that made non-fatal strangulation a stand-alone criminal offence—Labour did not. And it is this party that passed Acts such as the Domestic Abuse Act 2021 and will pass Acts such as the Victims and Prisoners Bill to ensure that victims are properly served.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
If the right hon. and learned Gentleman wants to be seen as a Justice Secretary who will stand up for the rule of law and access to justice, he should be putting the greatest possible distance between himself and the dreadful pet project of his predecessor by disowning the Bill of Rights altogether. Importantly, will he stop that Bill being split up and dropped into other pieces of legislation, as we have already seen with the Illegal Migration Bill? Instead of undermining respect for international rights, why does he not work to incorporate more rights into domestic law, such as the UN convention on the rights of the child?
Alex Chalk
Human rights matter. I refer the hon. Gentleman to the answer I gave a few moments ago. I reiterate this point, because it is important: one of the most vital aspects of access to justice is the right to be tried by a jury of one’s peers. That matters, because it is a bulwark against the power of an overweening state. He should know that. Why is he playing so fast and loose with hard-won Scottish freedoms?
Nicola Richards (West Bromwich East) (Con)
Rob Butler (Aylesbury) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Sorry, Mr Speaker; I was so excited giving that last answer. SLAPPs involve abusing the legal process to shut down legitimate investigations and criticisms that wealthy individuals might find inconvenient. We will introduce a new statutory definition, an early dismissal process to strike out SLAPP litigation and protections against excessive legal costs. We are looking closely at a number of legislative avenues to pursue that.
Nicola Richards
For too long, Russian oligarchs have used SLAPPs to attempt to frustrate journalists from exposing their actions. Journalist and author Catherine Belton and her publisher were left with a £1.5 million bill after libel actions were brought against her for her book “Putin’s People”. Will the Minister agree to do as much as possible to prevent this exploitation of the UK courts?
Alex Chalk
I thank my hon. Friend for making that case so powerfully, and she is right. SLAPPs do represent an abuse of the legal system, as they rely on threatening tactics to silence individuals who act in the public interest. The Government are committed to preventing exploitation of UK courts by legislating against SLAPPs at the earliest opportunity, and we are considering that in legislation already before Parliament.
Rob Butler
As the new chair of the all-party parliamentary group on media freedom globally and a former journalist myself, I am very concerned about SLAPPs. The name says it all: they are strategic litigations against public participation. They are abusive lawsuits designed to shut down the exposure of important facts by journalists, among others. I am pleased to hear what the Lord Chancellor has said. Could he give the House a little bit more detail on the potential scope of the legislation, and just reiterate what a difference it will make for the freedom of the press?
Alex Chalk
My hon. Friend is absolutely right in his use of the word “scope”, because we have to take care with this legislation. There is a balance between speed and ensuring it is sufficiently comprehensive to achieve the policy aim. It is right to note that, if we look around other common law jurisdictions, we see that there are some occasions when such legislation has had unintended consequences that we do not want, so we want to consider that learning carefully. We will proceed carefully but quickly, with all due diligence and expedition, to make sure that it achieves the policy aims.
Catherine West (Hornsey and Wood Green) (Lab)
I warmly welcome the Secretary of State’s answer to the question from the hon. Member for West Bromwich East (Nicola Richards), but how can he introduce fresh challenges for the Department when the backlog is so severe? A visit to Wandsworth prison at Easter with a cross-party group of MPs showed that 75% of prisoners were still waiting for a basic sentence. [Interruption.] While he is reassessing his priorities—and introducing new things such as legislation on SLAPPs—will he reconsider the day job and the bread-and-butter work of getting through the backlog, so that three quarters of prisoners actually get their sentence and victims get justice?
Mr Speaker
Order. Can I just say that I love the imagination, but we have to be careful not to overstretch these questions. Secretary of State, are you happy to have a go?
Alex Chalk
I will give it a go, Mr Speaker. The question was ingenious, and I commend the hon. Member for it. Capacity is critically important—absolutely—and I want to stress, because people will be listening to this, that in 90% of the cases that take place in magistrates courts there are not those difficulties. However, it is true that we are expanding capacity, which is why there are more judges and there are 24 Nightingale courts. List officers are ensuring that we are getting through some of these most sensitive cases as quickly as possible, and the backlog in the Crown court—the case load in the Crown court—is coming down. We are seeing progress, and it is going to accelerate.
Clive Efford (Eltham) (Lab)
Getting back to SLAPPs, they are, as the Secretary of State has accepted, closing down public debate and public exposure of corruption. They are also being used against people who work for the enforcement agencies, such as the Serious Fraud Office, where individuals have been targeted. The Secretary of State has said that he intends to legislate, but can he tell us when he is likely to do that, because the Government have been making these noises for a very long time and what we need is action?
Alex Chalk
Absolutely. The position is that we will do so at the earliest opportunity. As I said before, we are even considering this in legislation before the House at the moment, so I hope that that gives the hon. Member an indication of the urgency. However, the point to note is that it is very easy to say “anti-SLAPPs legislation”, but if we look at other jurisdictions, we see that that can be in the form of costs orders that can have unintended consequences in respect of the law of defamation. I am not suggesting that is any reason not to move quickly—we are going to move quickly—but we have to move quickly and with care. If we do not, we risk undermining the very policy objective we want to deliver.
Mr David Davis (Haltemprice and Howden) (Con)
I will remind the Lord Chancellor that we have debated this matter a number of times in this House over more than the last year, so I do encourage haste. On scope, SLAPPs encourage a lot of other bad practices. For example, we are now the global centre of illegal hacking in this country. We have a very bad record for poorly regulated private investigation, so can he make sure his review covers that as well?
Alex Chalk
As always, my right hon. Friend absolutely has his finger on the pulse of this important issue. He makes a powerful point, and I can assure him that it is being borne in mind.
Sarah Olney (Richmond Park) (LD)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The use of expert evidence is a matter for the independent judiciary, with parameters set in legislation. If the expert’s area is regulated, they must be in possession of a current licence to practice or provide an equivalent to the court. If it is not regulated, they must demonstrate appropriate qualifications or regulation by a relevant professional body. I can confirm that officials from the Ministry of Justice and the Department of Health and Social Care are in discussion on taking this further.
Sarah Olney
The continued reliance on self-declared experts to provide evidence in family courts is placing thousands of children and vulnerable women at risk, with allegations of parental alienation closely linked to cases of domestic abuse and coercive control. I have heard at first hand from constituents just how dangerous this can be. Professional associations and international bodies, including the United Nations, have also highlighted the failings of the current system. Will the Minister take action to protect vulnerable women and children, and finally commit to a full inquiry into the use of parental alienation in family courts, alongside more regulation and accreditation standards for those invited to give specialist testimony?
Mike Freer
I reiterate that it is a matter for the judiciary to question the bona fides of an expert: if they do not believe an expert seeking to give evidence in court is of the required standard, the judiciary can reject them. On taking further steps, the rights of the child are paramount, which is why we are looking forward to discussions to see how we can tighten up the role of experts. Equally, the Government are confident that the family justice system can robustly address this issue already. If there is more work to be done once we have been able to see the evidence, we will do it, but I am not proposing that we rush into a further review at this stage.
Anna McMorrin (Cardiff North) (Lab)
Family courts across the country are being used to perpetuate domestic abuse, and when that abuse proves fatal, which we know it too often does, the family courts allow it to be continued against the victim’s family. Currently, the parents of a woman who was killed by her husband would have to be cross-examined by that same murderer to adopt their orphaned grandchildren. This is a system that is stacked in favour of the killer. Do the Government agree that this practice is abhorrent and support Labour’s calls to implement Jade’s law in the Victims and Prisoners Bill?
Mike Freer
I refer the hon. Lady to my colleague the victims Minister, my right hon. Friend the Member for Charnwood (Edward Argar), because I believe he has already met the right hon. Member for Alyn and Deeside (Mark Tami) to see how the issues raised by Jade’s law can be implemented. [Interruption.] As I have said, my colleague has met the proponent of Jade’s law to see how those issues can be progressed further.
Dame Caroline Dinenage (Gosport) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
We recognise that grandparents often play an important role in children’s lives and can provide stability in families following divorce or bereavement. However, when making any decision about a child’s upbringing the court’s paramount consideration must be the welfare of the child based on the individual facts of the case, and given the importance of considering each case on its individual merits neither adults nor children have a statutory right of access.
Dame Caroline Dinenage
I thank the Minister for his answer but we know that the bond with a grandparent can be one of the most precious relationships in a child’s life, yet so often in the adult wars of family breakdown children are a weapon and actions by grandparents through the family court are often incredibly expensive and frequently fruitless. What more can the Department do to give grandchildren that right to see their grandparents, and is it not about time we followed the example of Scotland, which has an older persons Minister, and Northern Ireland and Wales, which have older persons commissioners, to take up such issues?
Mike Freer
My hon. Friend might want to take up the question of an older persons commissioner with the Prime Minister because I suspect that is well above my pay grade. On access for grandparents, I will double-check this but am pretty sure that we recently extended the ability to get legal aid to special guardianship orders, which may well be accessible for grandparents to secure rights of access.
John Penrose (Weston-super-Mare) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
We are committed to working closely with the judiciary and other partners to improve the efficiency of the criminal courts and family courts, and this includes the judicial-led cross-system Crown court improvement group, which improves ways of working with the Crown court. But across the whole system we are looking at increasing digitisation so that the cost of access to justice is also reduced, and that is an addition to all the measures mentioned in response to other questions to ensure the capacity of our system is robust.
John Penrose
I thank the Minister for those examples. Does he agree that those reductions in the costs, delays and complexity of resolving disputes and enforcing the law are good not just for victims and plaintiffs but for consumers and taxpayers, and are also examples of how red tape can be cut without compromising the quality of British justice? So will he keep going on this crusade, and perhaps persuade other Government Departments to apply the same energy and rigour in their portfolios?
Mike Freer
My hon. Friend is absolutely right. For instance, for online civil money claims the times for issuing, responding and hearing dates are down to 9.4 days from 25 days, while damages claims are down from 11.4 days to one day and financial remedy consent orders are down to four weeks rather than many months, all making access to justice faster, more efficient and cheaper for those who need it.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
On 1 May, my constituent Johanita Dogbey was brutally murdered on Stockwell Park Walk in my constituency, an area that I have walked past many times. She was 31 years old. Yesterday, as I held her mother, trying to console her, she asked me why her family have to wait for over a year to get justice. The Minister outlined improving the courts system and efficiency. Does he agree that every day that my constituents have to wait is a sentence for them and that it is about not just the economic cost but the human cost in bringing forward cases so that our victims get the justice they deserve?
Mike Freer
The hon. Lady is quite right to raise that point. The Department and the judiciary appreciate the sensitivity of such cases to ensure that the families of victims—and the victims, if they are still with us—do get their day in court so that they can see justice done as fast as possible. There can be a variety of reasons why cases are delayed. It could be about the availability of counsel, prosecutors or experts—or, in some cases, the availability of multiple defendants. I do not know the details of that case apart from it being listed for, I believe, the spring—
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
It is spring 2024.
Mike Freer
Spring 2024. If the hon. Lady would like to write with the details of the case, I can find out if there are specific reasons why it has been delayed. As I say, there can be a variety of reasons for that, and I am quite happy to get the details for her.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
Kirsten Oswald (East Renfrewshire) (SNP)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The Ministry of Justice has been working closely with the Scottish Government and other devolved Administrations to consider the implications of the Retained EU Law (Revocation and Reform) Bill for retained EU law in justice policy areas across the UK. My officials have regular discussions with their devolved Administration counterparts to ensure that proposals to revoke or reform retained EU law are carefully considered to avoid any unintended divergence across the UK.
Martin Docherty-Hughes
I wonder whether the Minister agrees with Unison the trade union, which has warned that
“encroaching upon devolved areas, to actively make lives worse for working people will damage the democratic legitimacy of the Westminster Parliament in the eyes of people in devolved nations.”
Mike Freer
With regard to this specific Bill, given the announcement last week, I do not believe that there is any infringement on the Scottish competency.
Kirsten Oswald
The Bill restricts Scotland’s Lord Advocate’s reference and intervention powers to devolved Scottish legislation. However, there is no corresponding restriction on English law officers to limit them to reserved matters. Does the Minister feel it is right that English law officers would be able to refer Scottish legislation to the courts in that manner, or does he agree with the Law Society of Scotland that that should be left to Scottish law officers?
Mike Freer
I will have to look carefully at the references that the hon. Lady has made, but, as far as I am aware, the items of retained EU law in the Ministry of Justice’s remit that are intended to be revoked under the new schedule are all spent measures, and there will be no impact on Scotland.
Maggie Throup (Erewash) (Con)
The Minister of State, Ministry of Justice (Damian Hinds)
Offenders who get off drugs are some 19% less likely to slip back into a life of crime, so the Ministry of Justice is investing strongly across security, testing, treatment and continuity of care.
Maggie Throup
Does my right hon. Friend appreciate that there is a clear correlation between criminal offences involving drugs and alcohol and the prevalence of antisocial behaviour, particularly in and around our town centres? What is being done to ensure that persistent offenders of drink and drug-fuelled antisocial behaviour are not only prosecuted but receive tougher custodial sentences to keep them off the streets so that people feel safer in our communities?
Damian Hinds
I certainly appreciate the link that my hon. Friend mentions. The MOJ has worked closely with the Department for Levelling Up, Housing and Communities and the Home Office on the antisocial behaviour plan, which includes funding to use out-of-court disposal conditions in 10 police and crime commissioner areas to deliver immediate justice. The probation service will pilot new rapid deployment teams of offenders serving community sentences to clean up and repair more serious incidences of antisocial behaviour as quickly as possible.
Dan Jarvis (Barnsley Central) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
We have introduced a number of measures to improve the experience of victims of domestic abuse and their children following the final report of the expert panel on harm in the family courts. We will shortly publish an update setting out progress made since the report’s publication. That includes establishing new pathfinder pilots in Dorset and north Wales to trial a more investigative approach to private family law cases and bolster the voice of the child in proceedings. We are consulting on further measures to spare children from involvement in courtroom battles by supporting the early resolution of private law disputes.
Dan Jarvis
I am grateful to the Minister for that response. Jack and Paul were murdered by their father after it was ruled that it was in their interests to maintain contact with him. The presumption for parental involvement in cases of domestic abuse can have fatal consequences, which is partly why it is under review. However, that review was meant to publish two years ago. Children’s lives depend on it, so will the Minister confirm when the findings will be published?
Mike Freer
As the hon. Gentleman says, work is under way. The review has to be carefully considered, because of the complexities of parental involvement, to ensure that the rights of the child are protected. It is an important and complex issue, and we want to ensure it is based on a solid understanding of the ways the presumption is currently applied and how it affects both parents and children. I have asked that we get a stronger date for the review to be published. I will write to him shortly, once I have a date.
Peter Aldous (Waveney) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
We laid a family statutory instrument in February this year which, among other things, brings special guardianship orders in private law proceedings into the scope of legal aid, injecting a further £5.6 million a year into the system. A special guardianship order can place a child in the care of someone other than their birth parents. That can include family members, including grandparents, and close family friends.
Peter Aldous
I am most grateful to my hon. Friend for that answer. The Government’s announcement, which he outlined, of an additional £5.6 million for legal aid to support family members seeking guardianship of vulnerable children is extremely welcome. I would be grateful if he considered whether that could be part of a wider review of the rights of family members, specifically grandparents who are very often best placed to provide a loving home, care and support.
Mike Freer
The rights of grandparents have risen up the agenda considerably over the last few years. Both colleagues who have spoken on this issue today, including my hon. Friend, make some valid points. I will give a commitment to discuss it with my colleague Lord Bellamy, who leads on this area, to see what further work we can do.
Afzal Khan (Manchester, Gorton) (Lab)
These are not my words on the cuts to legal aid, but the words of the new Lord Chancellor:
“There is now a serious concern that, without some steps to restore a measure of access to justice, serious injustice will inevitably follow.”
Will the Minister heed the words of his new boss and reverse the devastating cuts to legal aid that his party has inflicted over the last decade?
Mike Freer
I think, actually, that it was the Labour party who said that it was going to
“derail the gravy train of legal aid”.
This Government have continued to fund legal aid, with £1.2 billion on criminal and £813 million on civil. In the last few months, we have injected nearly £30 million into the civil part and some £13 million of that is legal aid for special guardianship orders, so I simply do not accept the premise that we are underfunding or cutting legal aid. In fact, we are investing in it. The hon. Gentleman touched on access to civil, family and tribunals. On family, we increased the budget for the Children and Family Court Advisory and Support Service by £8.4 million to £141 million. We are recruiting more judges across the system. That includes more fee-paid judges who can work in this area. That includes a virtual regional pilot to support London and the south-east, so that access to justice is faster. That includes £7.5 million for a family mediation scheme, helping 17,000 families get the access to justice they need. Any attempt to suggest we are not investing in the justice system is simply false.
Holly Mumby-Croft (Scunthorpe) (Con)
The Minister of State, Ministry of Justice (Edward Argar)
As the Victims Minister I am committed to supporting all victims to pursue an outcome in the criminal justice system and bring perpetrators to justice. That is why we are more than quadrupling funding for victims and witness support services by 2024-25, and are recruiting to increase the number of independent sexual violence advisers and independent domestic violence advisers by 300—to more than 1,000—by the same time. Through the groundbreaking Domestic Abuse Act 2021, we have introduced important new protections and support for victims of domestic abuse at court.
Holly Mumby-Croft
It is important to remember that anyone can be a victim of domestic violence, including men. My constituents have raised this issue with me; will the Minister do all he can to reassure them and me that men, too, will be supported through the justice system?
Edward Argar
My hon. Friend is right to highlight that men can be victims of domestic abuse and domestic violence. All victim survivors deserve access to timely and appropriate support. The updated controlling or coercive behaviour statutory guidance 2022 signposts specialist organisations that support men and boys who are victims of domestic abuse, alongside non-gendered services. Among the specialist organisations that we fund as a Government are ManKind and Dads Unlimited. The Home Office also supports the Men’s Advice Line, run by Respect.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Employment advisory boards, chaired by business leaders across the country, do hugely important work to foster links between prisons and employers. I was delighted to attend the EAB conference just last week. Having a job reduces the reoffending rate by up to nine percentage points. That is good for society and for the offenders who turn their lives around. That is why we have rolled out boards to 92 resettlement prisons ahead of schedule.
Gordon Henderson
I welcome the Secretary of State’s response. I recently visited HMP Swaleside, where I witnessed good work done by the excellent employment advisory board, including the setting up of the internal distribution centre run by prisoners and supplies prisons across the estate. I am sure that members of the employment advisory board, the governor, prison staff and prisoners themselves would get a big lift if the Prisons Minister, my right hon. Friend the Member for East Hampshire (Damian Hinds), would find time in his busy schedule to visit the Isle of Sheppey and see for himself this fantastic initiative.
Alex Chalk
I am grateful to my hon. Friend for raising that issue. I know the prison that he speaks of. He is right to highlight the brilliant work of Paul Barrett of Barretts Motor Group, who is bringing that work to HMP Swaleside. Thanks to his hard work we are seeing a dramatic improvement in the percentage of prisoners in employment six months after release—it is up 9% in just a year. When the latest figures come out, I think my hon. Friend will see an even greater increase. That really matters. My right hon. Friend the Prisons Minister is already planning a trip to the Isle of Sheppey to see those initiatives in action.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister of State, Ministry of Justice (Damian Hinds)
The Government have received a pre-reporting list of issues from the UN Committee against Torture, as is routine. We are finalising our response.
Neale Hanvey
Article 3 of the 1984 UN convention against torture and other cruel, unhuman or degrading treatment or punishment sets out the grounds on which a state should judge all risks of mistreatment in considering extradition. Will the Minister clarify whether the UK Government give due consideration to those provisions? Specifically, what consideration is the UK giving to providing a right of safe passage for those fleeing Sudan and South Sudan with family members in the UK? Will the Minister set out what safe, open and legal routes are available to those people?
Damian Hinds
I am grateful to the hon. Gentleman for his question, though I know that you would not want me to stray too far into matters that are for other Government Departments, Mr Speaker. The UK has carried out by far the longest and largest evacuation of any western country from Sudan, bringing 2,450 people to safety. Preventing a humanitarian emergency in Sudan is our top focus. Alongside the evacuation effort, we are working with international partners and the United Nations to bring an end to the fighting.
Maggie Throup (Erewash) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I am delighted to have been appointed Justice Secretary and Lord Chancellor. The rule of law, access to justice and the independence of the judiciary are the bedrock of a safe, free and fair society. It is an honour to continue this Government’s work to deliver a justice system that puts victims of crime first and ensures fairness for all.
Since my appointment I have taken the Victims and Prisoners Bill through its Second Reading, just yesterday. It is an important Bill that will improve the service that victims receive and strengthen our parole system. I have announced the introduction of 13,000 body-worn cameras to help keep our prisons safe and secure. I was pleased to meet the dedicated staff at HMP Isis, who work tirelessly to provide a safe and rehabilitative environment. I have also had introductory meetings with the legal sector, and look forward to engaging more with our excellent legal professionals in the weeks and months ahead.
Maggie Throup
May I welcome my right hon. and learned Friend the Justice Secretary to his rightful place?
In welcoming the measures designed to protect children in the Government’s Online Safety Bill, will my right hon. and learned Friend outline what further action his Department is taking in relation to the criminal justice system to improve prosecution rates for serious offences involving minors, particularly in relation to sex offenders who target young people online?
Alex Chalk
My hon. Friend is absolutely right to raise this point. The Government have invested significantly in new capabilities for law enforcement, including our specially trained network of undercover online officers, to arrest offenders committing online child sexual abuse. Co-ordinated National Crime Agency and policing activity against those offenders is currently resulting in over 800 arrests per month, and we have also delivered a further £4.5 million for organisations supporting victims and survivors of child sexual abuse.
Steve Reed (Croydon North) (Lab/Co-op)
I am delighted to welcome the Secretary of State to his place for the second day running. I have been reading his speeches with interest. He once said the Conservatives should
“do away with the argument that…we are somehow soft on crime.”—[Official Report, 2 July 2018; Vol. 644, c. 90.]
Is it not “soft” to tell judges that they cannot lock up dangerous criminals?
Alex Chalk
Let us just get a few things absolutely clear. We believe in criminals spending longer in custody. It is strange that when there was the opportunity to vote for rapists and serious violent criminals to spend two thirds of their sentence in custody, the hon. Gentleman voted against that. Indeed, I happen to remember, from when I was at the Bar, that his party did exactly the same in the Criminal Justice Act 2003. Whereas previously, people serving sentences over four years would serve two thirds of their sentence in custody, they cut it to half: soft on crime, soft on the causes of crime.
Steve Reed
I am wondering whether the Secretary of State’s handover was a little rushed, because his predecessor wrote to judges and told them not to lock up dangerous criminals, because the Government have run out of prison places. That sounds soft to me, because it tells criminals they can get away with crime. Will he withdraw the letter and tell judges to lock up criminals who deserve to be behind bars?
Alex Chalk
Well, criminals do deserve to be behind bars, which is why I am proud of the fact that when it comes to rape, which is an appalling crime that robs innocence and destroys lives, we have ensured that criminals convicted of that offence get prison sentences a third longer than they did in 2010. I am pleased to be able to record that the numbers convicted of that appalling offence, in the last 12 months for which figures are available, are 10% higher than under the Labour Government.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Alex Chalk
I express my sincere condolences and deep sorrow to the family of my hon. Friend’s young constituent. As he knows, the provisions in the Police, Crime, Sentencing and Courts Act 2022 fulfilled our long-standing commitment to increase the maximum penalty from 14 years to life imprisonment for the offence of causing death by dangerous driving. The Department for Transport is considering the publication of a call for evidence on motoring offences. While work is continuing as to its precise scope and timing, it is expected to include aspects of drink and drug driving and the failure to stop and report, with the opportunity to raise other matters. I encourage my hon. Friend to write to me and the Secretary of State for Transport, and I would be happy to discuss these matters further.
Chris Law (Dundee West) (SNP)
Alex Chalk
It is absolutely right that the judiciary, who I respect enormously, do justice on the facts before them. If they feel they can do justice and provide a remedy for the crime that has been committed against society through an unpaid work order, some sort of community disposal or a suspended sentence order, that is a matter for them. The volume of unpaid work orders has gone up, and we are very keen to ensure that the rehabilitation or the unpaid work takes place as close as possible to the community that has been offended against, so that if there has been criminal damage or shoplifting, individuals should pay back their debt to the very society that they betrayed. That is what we would invite courts, in the exercise of their independent discretion, to do.
Mr Philip Hollobone (Kettering) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The number is roughly 9,135, which is about 15% of the backlog. The cases for which all the documentation has been received will take six to eight weeks to complete. We have recruited 100 additional members of staff to ensure that we can clear the more complex cases, as we realise that the issuing of probate is important.
Helen Morgan (North Shropshire) (LD)
Mike Freer
As we have said in earlier answers, we are trying to ensure that the outstanding caseload continues to diminish by continuing to increase the judiciary. There will be 1,000 more judges this year and next, we are increasing court capacity—there is now no cap on the number of sitting days—and there are also the 24 Nightingale courts. All this will make a tangible difference to the capacity of the court system, which means that the cases in the hon. Lady’s constituency can be heard more quickly.
Scott Benton (Blackpool South) (Ind)
The Minister of State, Ministry of Justice (Damian Hinds)
As my right hon. Friend the Secretary of State explained earlier, getting offenders and ex-offenders into work has a material impact on the odds against their returning to a life of crime. There is a fantastic opportunity to maximise that because of the tightness of the labour market. My hon. Friend is right about the need to match local skills needs, and the employment advisory boards are there to ensure that that happens.
Chris Stephens (Glasgow South West) (SNP)
Alex Chalk
These are sensitive constitutional issues. I should be happy to write to the hon. Gentleman.
Vicky Ford (Chelmsford) (Con)
Two Chelmsford GCSE students, Louis and Mason, have been engaged in a citizenship project on our justice system and reducing reoffending rates. Given that we know employment can help to reduce reoffending, what progress is being made on helping offenders and ex-offenders into work?
Alex Chalk
My right hon. Friend the Member for East Hampshire (Damian Hinds), the Prisons Minister, has talked about this a little. It is very important for people within jails to be given the chance to connect with the opportunities outside. I recently visited HMP Berwyn, which has an employment hub that allows individuals to receive not just career support but, potentially, the interview that they need with an employer on the outside via digital connectivity. I know that my right hon. Friend does excellent work in her local prison, HMP Chelmsford, which is improving greatly following a difficult period, and is now coming out on the other side. We remain committed to ensuring that defendants can get into employment to turn their lives around, but also to repay their debt to society in becoming contributing members of it.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
Damian Hinds
I think that any such review and analysis would be led by the Government Equalities Office, but I can of course speak with reference to the prison system. On the particular issue of transgender prisoners on the women’s prison estate in England and Wales, our approach is that transgender women can be held on the main women’s estate only if risk-assessed to be safe. That is part of the reason why more than 90% of transgender women in custody in England and Wales have been held on the men's estate, compared with only 50% in Scotland. The further changes in our policy strengthen the position, meaning that no transgender woman convicted of a sexual or violent offence and retaining male genitalia can be assigned to the general women’s estate other than in truly exceptional circumstances, with ministerial sign-off.
Tom Hunt (Ipswich) (Con)
A few weeks ago, I visited Poundland at Sailmakers shopping centre in Ipswich, as well as the Military Unit shop and Essential Vintage. All those businesses are at their wits’ end with repeated thieving in their shops, to the point that one of them has temporarily shut its doors. Does the Lord Chancellor agree that the criminal justice system needs to be far harder on those who are repeatedly caught shoplifting? It is debilitating for a town centre, and we should not let cultural sensitivities get in the way.
Alex Chalk
My hon. Friend is right. Crime is crime, and cultural sensitivities should play no part in the police’s enthusiasm for cracking down on it. I am pleased that 20,000 police officers have been recruited, fulfilling the Government’s manifesto commitment. That means that there are more officers on the street not just deterring crime, but ensuring that arrests can be made and people can be brought to justice.
John Cryer (Leyton and Wanstead) (Lab)
I realise that the Secretary of State has only recently been appointed, and I welcome him to his place. Does he have any plans to undertake an assessment of the functioning of the law on joint enterprise?
Alex Chalk
The law on joint enterprise is a sensitive issue. I happen to know that it can be a very important prosecutorial tool to ensure that those who have helped in or encouraged the commission of a serious offence can be brought to justice. The hon. Gentleman will be aware that the Court of Appeal considered very carefully the scope of the law of joint enterprise to ensure that it catches only people who are truly culpable. There are currently no plans to reform the law, but I will of course consider that sensitive matter if he wishes to raise it with me. I would be happy to have that conversation.
Rob Butler (Aylesbury) (Con)
I have said on several occasions in this place that prison officers are the hidden heroes of our public services. Twenty-two came out of hiding and were in plain view during the coronation, when they lined the route of the parade. Will my right hon. and learned Friend join me in congratulating them and welcoming that recognition, which raises the profile of an excellent career? I happen to know that HMP Aylesbury is recruiting.
Alex Chalk
My hon. Friend is an excellent recruiting sergeant for HMP Aylesbury. He is right: I was recently at HMP Isis and spoke to some young band 3 and 4 prison officers. They are remarkable people who do a difficult job and have to show that precious quality of judgment, which is needed in a prison and elsewhere, on when they need to intervene robustly and when they need to show sensitivity. I am proud that we have invested heavily, through a £100 million scheme, to ensure that every prison officer has body-worn video. Those officers told me how that dials down potentially volatile situations and ensures that, on those rare occasions when violence happens, those individuals who make bad decisions can be held properly to account.
Mr Gregory Campbell (East Londonderry) (DUP)
When the Secretary of State holds discussions with Cabinet colleagues on the Illegal Migration Bill, will he ensure that the public perception that there is a massive distinction between people who flee persecution and oppression and arrive in this country to a welcome, and those who leave countries with no oppression and arrive here illegally, remains the case?
Alex Chalk
That is at the heart of the matter. This is a humane, decent and fair country. We have shown that through our track record and will continue to do so. Since 2015, this nation has opened its doors to 500,000 people fleeing persecution, from Syria, Afghanistan and Hong Kong. They are in all our communities across the United Kingdom and we are proud to welcome them. However, if we want to ensure that that humane instinct is not undermined or somehow brought into disrepute, we have to be fair. That means ensuring that those who traffic people, or those who arrive illegally and try to jump the queue, do not do so without consequence.
Dan Jarvis (Barnsley Central) (Lab)
Can the Minister say what the Department is doing to support armed forces veterans in the criminal justice system?
Alex Chalk
We are doing a huge amount, actually. Some of it is to do with what happens in custody. I have been to some prisons that have veterans’ wings, and it is really moving to see, with a lot of the artwork including regimental cap badges and other insignia. That is an important aspect, but critically the chances of people going straight on leaving custody are influenced by three things: whether they have a home, whether they have a job and whether any mental health or drug issues have been addressed. One of the things I am most proud of is that we have rolled out a pilot scheme to ensure that those who leave have a guaranteed 12 weeks of accommodation, so that they can start to rebuild relationships and get into the kind of employment that will help them. That is useful for all offenders, but particularly for armed service personnel, who I know want to go straight and do the right thing.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I recently wrote to the Secretary of State’s predecessor about what his Department calls the “temporary release failure” from Her Majesty’s Prison Sudbury, as it was at the time, of the known criminal Dean Woods, which is on the public record and is of grave concern not only to the Prison Service in England but to some of my constituents, given what he was convicted of and what he is accused of by police forces across Europe. Since last year, has the Department done anything to make sure that Mr Woods is returned not to a category D prison but to a category B prison, and to ensure that it works with colleagues across the rest of Europe to make sure that, if he is to be sent to prison for other possible actions, it happens as quickly as possible?
Damian Hinds
If I may, I offer to meet the hon. Gentleman to talk through that detailed case.
National Crime Agency Investigation: Javad Marandi
(11 months, 4 weeks 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.
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Mr Speaker
I urge Members to be cautious in their references to this live investigation.
Alison Thewliss (Glasgow Central) (SNP)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the implications of the National Crime Agency’s investigation into Mr Javad Marandi.
The Minister for Crime, Policing and Fire (Chris Philp)
The hon. Lady asks about a law enforcement operation, and she and the House know that the Government do not and cannot comment on investigations being undertaken by law enforcement. This Chamber and this Dispatch Box are not the place, cannot and should not be the place, and never have been the place to comment on live investigations by law enforcement. That remains as much the case today as it has been for the last several decades.
UK electoral law sets out a stringent regime of donation controls to ensure that only those with a legitimate interest can make donations, and that those donations are transparent. Permissible donors include registered electors, UK-registered companies carrying out business in the UK, trade unions and other UK-based entities. I remind the House that this Government have taken significant steps to strengthen the integrity of our elections and to update electoral law to ensure that our democracy remains secure, modern, transparent and fair.
This includes reforms to election finance. The Elections Act 2022 introduced a restriction on foreign third-party campaigning at elections. It is an important and existing principle that only those with a legitimate interest in UK elections can spend money to seek to influence the electorate. The Act, moreover, strengthened transparency in the political finance framework by introducing a new requirement for political parties with assets and liabilities above £500, which of course includes the SNP, to produce an assets and liabilities declaration upon registration. It also introduced a new, lower, registration threshold for third-party campaigners spending more than £10,000 during the regulated period before an election.
The Government are developing a new anti-corruption strategy, which we plan to launch later this year, which seeks to address the impact of corruption on our national security and to strengthen trust in our institutions. The Government are committed to the fight against corruption, and since 2010 the United Kingdom has led international efforts to combat corruption through the delivery of the 2017 to 2022 anti-corruption strategy, on which we will continue to build.
Mr Speaker, I conclude by passing on to you and the House the apologies of the Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), who would ordinarily have replied to this urgent question. Unfortunately, he is not available at this moment.
Alison Thewliss
Thank you for granting this urgent question, Mr Speaker.
The news this morning that Javad Marandi has lost a 19-month legal battle with the BBC to remain anonymous is a victory for transparency and freedom of the press in a battle often weighted in favour of wealthy oligarchs. It also goes to the heart of our democracy. Although it is incumbent on me to state that Mr Marandi denies any wrongdoing, and I note that his lawyers emailed me just five minutes ago, the National Crime Agency has found that companies linked to him are a crucial part of the money laundering network known as the Azerbaijani laundromat. Credit must go to Martin Bentham of the Evening Standard and the BBC’s Steve Swann and Dominic Casciani, to the Organised Crime and Corruption Reporting Project, who back in 2017 exposed the $2.9 billion stolen from the people of Azerbaijan, and to the NCA for its part in this case, naming Mr Marandi as a person of importance.
The UK must not be a home for the world’s dirty money, but it has become so under the Tories. Mr Marandi appears to have used corporate structures—
Mr Speaker
Order. Are you going to continue with that—yes or no? If you are, you are going to leave the Chamber. Can I have an answer? Are you going to behave?
Alison Thewliss
Thank you very much, Mr Speaker. Mr Marandi appears—[Interruption.]
Mr Speaker
Order. I am sorry, Mr Malthouse, but I do not want interruptions being shouted when the Member is asking the question. The Minister wants to hear it and this is a serious matter. I do not want backchat from those on the Benches. As I say, if you wish to leave, you are more than welcome to do so, but I am certainly not going to have any more of this.
Alison Thewliss
Thank you, Mr Speaker. Mr Marandi appears to have used UK corporate structures, including Scottish limited partnerships—Hilux Services LP and Polux Management LP—registered to a mailbox in my constituency. In the light of that, what further tightening of the Economic Crime and Corporate Transparency Bill, which is currently in the House of Lords, will the Government carry out?
There are clear political and security aspects to the Azerbaijani laundromat and to this case. Mr Marandi is a significant donor to the Conservative party. Electoral Commission figures show that he donated £756,300 to the Tories between August 2014 and November 2020, while the laundromat investigation was ongoing. That money secured him access to the Conservatives’ leaders group and advisory board, which, no doubt, was part of a wider effort at reputation laundering.
When was the Minister made aware of Mr Marandi’s links to the Azerbaijani laundromat and what action did he take? Can he confirm what meetings Mr Marandi has had with current and former Ministers, and what influence his donations have bought him? Has he received any Government contracts? Does the Minister agree with Transparency International, which considers Mr Marandi’s links to the laundromat to be a national security risk? What will the Minister do to legislate on SLAPPs, strategic lawsuits against public participation, which inhibit journalists investigating—
Mr Speaker
Order. I am sorry, but you had two minutes and you have certainly stretched my patience.
Chris Philp
A sentiment I entirely share, Mr Speaker.
I knew nothing about this gentleman until about an hour or an hour and a half ago, when I was briefed by officials, or perhaps earlier this morning when I saw the story in The Times. The Government are committed to making sure that the United Kingdom does not have dirty money. The hon. Lady has referred to the Economic Crime and Corporate Transparency Bill, which is passing through Parliament. It is designed to further strengthen those measures.
The Government are also firmly committed to legislating as soon as parliamentary time allows to combat so-called SLAPPs, whereby extremely rich individuals use, in essence, vexatious or malfeasant lawsuits to shut down proper scrutiny and proper free speech. Clearly, in this case the judge decided that transparency and the public interest were served by disclosure, and I welcome that.
On the other questions about donations, I am afraid that I do not know anything about those, although that is rather dangerous territory for the nationalists just now, is it not?
Sir Julian Lewis (New Forest East) (Con)
I had not intended to intervene in this urgent question, but I was delighted to hear my right hon. Friend the Minister say that the Government are proceeding with introducing the anti-SLAPPs legislation, as I had seen a report suggesting that it had somewhat fallen off the agenda. Will he tell us when, given the short time left in the life of this Parliament, the anti-SLAPPs legislation will be brought forward? There is cross-party consensus that it is extremely important and valuable.
Chris Philp
I agree with all my right hon. Friend’s sentiments, particularly that about the importance of anti-SLAPP legislation, to which the Government are committed. On the timing, that is out of my hands. I have been informed that it will happen as soon as parliamentary time allows, but I am sure that, if he makes representations to the Security Minister and others, he will receive a fuller answer.
Holly Lynch (Halifax) (Lab)
Here we are again, Mr Speaker, with an urgent question on Conservative party donations. As we have heard, the National Crime Agency has named Mr Marandi as a person of importance in its investigation into what has been described by the judge in the case as a “significant money-laundering scheme”. Mr Marandi has been on the Conservative advisory board of ultra-wealthy supporters, donating £756,300 to the Conservative party between 2014 and 2020. This is not the first time that we have to come to this Chamber to ask questions about the Conservatives’ lack of rigour when accepting donations. Just last month in the urgent question on alleged secret Chinese police stations, my right hon. Friend the shadow Home Secretary told the House that The Times had reported
“a Chinese businessman linked to an alleged Chinese secret police station in London, is linked to the united front work department, and has organised Tory party fundraising dinners and attended events with Conservative Prime Ministers”. —[Official Report, 19 April 2023; Vol. 731, c. 248.]
In April, the Good Law Project published damning revelations that, since the start of Russia’s invasion of Ukraine, the Conservatives had accepted at least £243,000 from Russian-associated donors, some of whom were linked to sanctioned businesses and organisations. I reminded the Security Minister of that when we recently debated Lord Carlile’s proposed amendment to the National Security Bill, which would ensure that political parties do their due diligence when checking where donations come from—an amendment which the Government whipped their MPs to vote against. I warned the Government just two weeks ago that, if they rejected proposals to clean up donations, the public would draw their own conclusions as to why, and here we are again.
Can the Minister confirm when the Government last accepted a donation from Mr Marandi and when he first knew that he was a person of importance in such a case? If he says that he was briefed only this morning, why has it taken until now to understand these revelations and the implications? Will the Government be giving back the donations that they have received in the light of these revelations? Can the Minister now confirm that the Government will back Lord Carlile’s amendment, or will they continue to suggest that there is nothing to see here?
The London laundromat must be shut down. The Government’s donations must be cleaned up.
Chris Philp
I welcome the fact that the National Crime Agency is investigating the apparent wrongdoing that has been going on and taking legal action as well. I am sure that all Members of the House will welcome that.
The National Security Bill is still being considered in the House of Lords, and we may see it down here in the course of ping-pong, so there will be plenty of further opportunities to discuss that. I would add that people are entitled to be considered innocent until proven guilty. That is quite a long-standing principle of law in this country, but all political parties, on both sides, need to be vigilant about donations. [Interruption.] Well, there have been donations received by a Labour Member of Parliament, and connections of a Labour Member of Parliament to someone who was later declared a foreign agent of China by MI5, so to suggest that this is polarised on party political lines is a misrepresentation. All political parties need to be very careful, thoughtful and discerning about where donations come from, regardless of what the law may say, and that is a lesson which political parties need to reflect on very carefully and learn from.
Sir Desmond Swayne (New Forest West) (Con)
If I may be of some assistance to my right hon. Friend the Member for New Forest East (Sir Julian Lewis), the Lord Chancellor told the House earlier today, did he not, that he was looking at using legislation already before the House for the SLAPPs?
Chris Philp
I regret that I was not in the Chamber earlier to hear that, but my right hon. Friend is an impeccable source of information and I am sure that Members will heed him accordingly.
Dame Margaret Hodge (Barking) (Lab)
I thank the hon. Member for Glasgow Central (Alison Thewliss) for tabling the urgent question and you, Mr Speaker, for granting it. These revelations are completely damning. There is an investigation into the Azerbaijan laundromat. A total of $2.9 billion was stolen. It was laundered through UK companies and used to bribe politicians and line the pockets of the corrupt Azerbaijani elite, and Javad Marandi is linked with it. Now we hear that he donated three quarters of a million pounds to the Tory party, got an OBE and access to Government Ministers. We should take these allegations very seriously. If they are true, dirty money has well and truly crept into our politics. The Conservative party will not regulate itself, so will the Government bring forward regulations requiring all parties to do due diligence and checks on the source of all political donations? Will the Minister make sure that this donation is returned, and will he investigate and report back to Parliament on any access that Mr Marandi got to Government Ministers because of his large donations to the Conservative party?
Chris Philp
As I have said, the rules in this area are being debated as the National Security Bill passes through the House. They are currently being debated in the House of Lords and, as I said in response to the shadow Minister, they may well return here in the course of ping-pong. I welcome the National Crime Agency’s investigation and court action, because no one wants to see dirty money flowing through London. The fact that the NCA is taking action is therefore to be welcomed. I gently repeat the point I made previously, that people are entitled to be assumed innocent until proven guilty. Issues of this kind are not exclusive to one side or the other; I have referred already to the foreign agent of the Chinese Government who was linked to a senior Labour Member of Parliament. In that context, all political parties—not just the two main ones, but the others too—need to exercise caution and vigilance in these matters, for all the reasons that the right hon. Lady just outlined.
Christine Jardine (Edinburgh West) (LD)
I thank the hon. Member for Glasgow Central (Alison Thewliss) for tabling the question and you for allowing it, Mr Speaker. Today’s revelations about Mr Marandi’s donations not only raise serious questions about the relationship between money and power in our democracy at present, but are a major security concern. If the Prime Minister is serious about restoring integrity to politics, as he has said, will the Government also now launch an independent inquiry into those and other donations?
Chris Philp
As I have said, there is a live law enforcement investigation connected with the Azerbaijan allegations. I think the right thing to do is to allow that NCA investigation to reach its conclusion.
Cat Smith (Lancaster and Fleetwood) (Lab)
The Minister will know, as we all do, that trust in democracy and our electoral law is precious and should be kept. Today’s revelations come on top of revelations yesterday by a Government MP that the voter ID laws were an attempt at gerrymandering. The public’s trust is precious; it is easily lost and hard to gain. The Minister mentioned aspects of the Elections Act 2022. Parts of that Act make it easier for foreign actors with bad intentions to influence British politics, so will he look again particularly at the overseas electors loopholes included in that legislation, to ensure that our democracy remains safe and secure?
Chris Philp
I agree with the hon. Lady that it is vital that our elections remain safe and secure, but the Elections Act included a number of measures that further tightened up our law, not least the restriction on foreign third parties campaigning at elections, and the strengthening of the transparency framework in relation to political finance. The Act significantly strengthened the law in that area.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I congratulate my hon. Friend the Member for Glasgow Central (Alison Thewliss) on securing this urgent question on something we both have an established interest in. The Javad Marandi case shows that bad-faith actors find it too easy to buy access into the body politic, yet most of his donations were done through the official Conservative and Unionist party channels. Earlier this month, we saw painstaking investigation by Jim Fitzpatrick of openDemocracy, showing how shady so-called think tanks such as Our Scottish Future had the lowest possible financial transparency ranking, leaving them open to manipulation from unknown dark-money donors like the notorious Constitutional Research Council during the Brexit referendum. Can the Minister say how the Government are going to ensure that those think tanks and campaigning organisations, which have a clear political goal, comply with best practice and declare who their donors are?
Chris Philp
Organisations engaged in political campaigning are covered by the expanded remit of recent legislation—but when it comes to transparency of political donations, I must say the Scottish Nationalists have quite a cheek lecturing anyone else.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I understand there has been a court judgment that a $500,000 deposit by Mr Marandi is one of the sources of the £1 million seized by the National Crime Agency as illicit money. Given that, does the Minister think it would offer some public reassurance if he were able to say from the Dispatch Box now that the Government party will immediately investigate the sources of donations it has received from Mr Marandi?
Chris Philp
I am afraid I do not know the details of the cash flows connected with that gentleman; nor do I know the details of the live investigation. I suggest to Members of the House that we wait until the investigation is concluded. All political parties should be careful, in the way the hon. Gentleman just described, in making sure that donations they receive are properly sourced and untainted.
Peter Grant (Glenrothes) (SNP)
I find it astonishing that a Minister who knew he was coming to the Dispatch Box to answer this question did not bother to read the BBC’s webpage, which had a very simple diagram showing exactly where the £40 million Mr Marandi received had come from. I commend my hon. Friend the Member for Glasgow Central (Alison Thewliss) not only on securing this urgent question, but on her determination in dragging the Government kicking and screaming to the point that they are finally going to do something about the Scottish limited partnerships, because, as we all know, there has never been any legitimate purpose for establishing them. Two of the partnerships she mentioned, Hilux Services and Polux Management, have been named in court by a judge as part of a money laundering ring. During the short period that Hilux Services existed, from 26 March 2013 to 3 October 2016, a time in which Mr Marandi was a significant beneficiary of the company, he donated £143,000 to the Conservative party. Does the Minister accept that, if it is established that, during the time Mr Marandi was making the donations, he was also in receipt of dirty, laundered money, that money must be paid back immediately?
Chris Philp
As I have repeatedly said, the Government cannot, will not and should not comment on live investigations, and we never have. The hon. Member asserts as fact what he has read on a news website, but let us wait for the investigation to conclude before drawing conclusions. The last people I will take lectures from on campaign transparency when it comes to finance are the nationalists, who are under investigation by Police Scotland as we speak.
Alex Sobel (Leeds North West) (Lab/Co-op)
There has been reporting on Mr Marandi’s links with the Azerbaijani laundromat, including his links to the ruling family of Azerbaijan and his facilitating property deals for them, for at least six years. Does the Minister think it is moral to retain the donations from Mr Marandi?
Chris Philp
I think we should wait for the investigation to get to the bottom of the facts, rather than basing conclusions on rumours and assumption. It is important that that investigation concludes but, as I have said, it is incumbent on all political parties to be very careful and thoughtful about where they take donations from.
Points of Order
(11 months, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Dawn Butler (Brent Central) (Lab)
On a point of order, Madam Deputy Speaker, I am deeply troubled by the recent admissions by the former Leader of the House, the right hon. Member for North East Somerset (Mr Rees-Mogg), regarding the introduction of mandatory voter ID, which have raised the prospect that Ministers may have misled the country about the intentions of the voter ID policy in the Elections Act 2022. Yesterday, the former Minister admitted that the proposal was a deliberate attempt to manipulate electoral outcomes in favour of the Conservative party, a strategy he termed gerrymandering —in other words, the deliberate bending of electoral rules or boundaries for partisan gain—although he said that it had backfired in the recent local elections. It is deeply concerning to see the blatant could-be politicisation of policies and organisations intended to ensure the fairness and security of our democratic process. A recent report by Omnisis for Byline Times indicated that the new rules may have deterred up to 2 million people from voting in the May elections. The justification for the policy was to combat voter fraud. It seems to me that there is a real possibility that the only fraud could be this Government. Can you advise me, Madam Deputy Speaker, whether I should report the matter to the Parliamentary Commissioner for Standards and the police?
Madam Deputy Speaker (Dame Rosie Winterton)
Did the hon. Lady notify the right hon. Member for North East Somerset (Mr Rees-Mogg) that she intended to raise this matter?
Dawn Butler
No, I have not notified him, but I am raising the issue based on comments that he made yesterday at the National Conservatism conference.
Madam Deputy Speaker
I should say that if the hon. Lady intends to pursue those matters through the Parliamentary Commissioner for Standards or through the police, she should not raise them in the House, so she might like to reflect on that. I am sure that the right hon. Gentleman to whom she refers will have heard her comments. She has put her concerns on the record. I suggest at this point, given that those on the Treasury Bench will, I am sure, report back what she has said, that we leave it at that.
Mr Rob Roberts (Delyn) (Ind)
On a point of order, Madam Deputy Speaker. At Transport oral questions on 20 April, I asked for an updated timeline on the electrification of the north Wales coast line. Even though the Rail Minister was on the Front Bench, the Roads Minister answered, ignoring the question entirely and asking me to work with him to help the people of north Wales. So I tried to do just that by writing to him to ask about road connectivity in Wales, referring him to page 47 of the manifesto upon which both he and I stood, which said:
“To support our Union, we will upgrade the A55 as the main road transport artery for North Wales”
I requested a meeting and also asked what discussions he had had with the Welsh Government about the promised A55 upgrades. I was surprised to get a brief email from an official saying my letter had been sent to the Welsh Government instead as the issues fell within their responsibilities.
These are serious matters that impact my constituents every day. They will be disappointed to discover not only that the Government intend not to follow through with that manifesto commitment, but that it never should have been made in the first place, as central Government have no responsibility for roads in Wales. What can I do not only to get an answer to my original question, but to have the Minister come to the Chamber to confirm that the commitment to upgrade the A55 made in the 2019 manifesto is no longer Government policy, and in fact, never was?
Madam Deputy Speaker
I thank the hon. Gentleman for that point of order and for giving me notice of it. I hope he will appreciate that the content of answers to parliamentary questions or correspondence is the responsibility of the Minister concerned. The hon. Gentleman obviously feels that the answers the Minister gave were unsatisfactory. I suggest that he seeks the advice of the Table Office as to whether there are other ways in which the matter might be clarified, and again, I am sure that those on the Treasury Bench will report back his concerns to the relevant Minister.
Helen Morgan (North Shropshire) (LD)
On a point of order, Madam Deputy Speaker. Further to the point of order raised by the hon. Member for Brent Central (Dawn Butler), I think I speak for a number of Members of this House when I say that I was appalled to hear the right hon. Member for North East Somerset (Mr Rees-Mogg)—a former Cabinet Minister—suggest in his speech to the National Conservatism conference yesterday that the introduction of voter ID was an attempt by the Government to gerrymander. In response to my urgent question on 23 February, the Minister with responsibility for local government declared that it was a
“myth that this is some form of suppression.”—[Official Report, 21 February 2023; Vol. 728, c. 140.]
The comments from the right hon. Member for North East Somerset therefore contradict the Minister’s. Will you advise, Madam Deputy Speaker, on whether you have received notice that the Minister is coming to the House to correct the record or otherwise clarify that point? If not, how might we achieve that?
Madam Deputy Speaker
I am grateful to the hon. Member for giving notice of her point of order. She will have heard my previous comments on this. Mr Speaker and I—as far as I am aware—have received no notification of a Minister coming to the House to make a statement about that. It is up to Ministers to decide, having looked at points that are raised, whether they wish to make any clarification. She has put her views on the record, and those on the Treasury Bench, who will clearly be very busy this afternoon, will have heard them and, I am sure, will notify the relevant Minister of the points that have been made.
Sir Edward Leigh (Gainsborough) (Con)
On a point of order, Madam Deputy Speaker. I wonder whether you have received notification from the Government that they wish to issue a statement to celebrate today’s 80th anniversary of the Dambusters raid from RAF Scampton on 16 May 1943? Eighty years ago, those brave men were preparing to perform what many military historians consider one of the greatest air feats of the entire war, and half of them lost their lives.
If the Government were to give that statement, could they enlighten the House on why they are risking a fantastic £300 million investment in RAF Scampton to celebrate the heritage of the Dambusters and the Red Arrows by putting a migrant camp near the entrance, taking 15% of the entire area of several hundred acres, putting at risk 100 buildings and, above all, putting at risk our national heritage? It emerged last week in court that apparently the Home Secretary was advised by her own civil servants that this was a bad idea and not to go ahead with it. How can we progress this further?
Madam Deputy Speaker
I thank the right hon. Gentleman for his point of order. He has reminded the House of the anniversary of the Dambusters raid and the very brave work done on that day. He has put on the record his worry that there may be changes to RAF Scampton. He asks how he can ensure that Ministers are aware of his disquiet about the change in use. I think that he has probably quite successfully done that, and I am sure that his concerns will, again, be reported back to Ministers, but he may wish to pursue it with them personally. He is a very experienced Member of this House; he knows that there are a few channels that he might use to raise his concerns.
Children Not in School (Register)
Tuesday 16th May 2023
(11 months, 4 weeks ago)
Commons ChamberRead Full debate Children not in school (register) Bill 2022-23 View all Children not in school (register) Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mrs Flick Drummond (Meon Valley) (Con)
I beg to move,
That leave be given to bring in a Bill to place a duty on local authorities to maintain a register of children who are not in school; and for connected purposes.
When schools in England reopened after successive lockdowns, the expectation was that every child would come back to school, excited to return to classroom learning and to be reunited with their friends. The reality has been very different. Despite schools reopening their doors, thousands of children have not returned and, as each term passes, a growing number of children have started to disengage with education entirely.
There has been a catastrophic increase in the number of children who are severely absent. The latest figures on school attendance uncover that 140,000 children were severely absent in summer 2022—that is the highest number on record. Those are children who are more often absent than they are present. They may still be on their school rolls, but they are hardly ever in class. Those children have become known as the “ghost children” of the pandemic. Getting them back into school is an issue of social justice, and one that must be a priority for the Government.
Equally concerning, though, and what my Bill would address, is the number of children who have disappeared from the school roll altogether. Currently, we hold no comprehensive data about how many children are not on a school roll, where they are and what quality of education they are receiving, if any. That was echoed in a recent report by the Education Committee, which concluded that
“the status quo does not allow the Government to say with confidence that a suitable education is being provided to every child in the country.”
That is not acceptable. A quality education holds the key to a brighter future for every child, as well as playing a core role in ensuring our nation’s society and economy thrive.
What is most troubling to me and, I know, to many of my colleagues across this House and in the other place, is that we do not even know whether these children are safe. No one—neither Government, nor local authorities nor schools—can honestly answer the question, “How many children are missing from school?” Therefore, how can we know that every child is safe and suitably educated? These children are out of sight and out of mind. That is what my Bill is about—ensuring that every child is visible, safe, suitably educated and receiving the support they need to thrive. While we do not have the data to fully understand where these children are, it is thought that many of them have disappeared off the school roll and off the radar, under the guise of home education.
I want to take this opportunity to make it clear that I fully believe parents should have the right to choose what education their child receives. That right should always be enshrined in law. Parents are in the best place to make informed choices about what their children need, with many parents providing a high-quality home education for their child. However, that is not the case for every child in home education, with a worrying number being taken off roll for reasons other than their best interests. Additionally, local authorities have confirmed many incidents where they discovered that the home education being delivered was simply not up to standard or, in some cases, entirely non-existent.
Similarly, we cannot surmise accurate conclusions about which groups are more likely to move off roll than others and, in turn, how they can be best supported. From the limited data that is available, children who are moved out of school are disproportionately likely to be eligible for free school meals, have an education, health and care plan or special educational needs support and have a history of absences and school exclusions. These children and families desperately need our support, but we are unable to offer it because we simply do not know who they are or where they are.
While we do not have comprehensive data, there are estimates of the number of children in home education that allow us to track patterns; I stress that these are estimates. Nine in 10 local authorities believe that they have not been able to identify every child in home education, and it is widely accepted that the actual numbers are likely to be much higher. It is estimated that by the start of the 2021-22 academic year, a record high of at least 81,000 children were being home educated—the equivalent to the population of 80 average-sized secondary schools.
The cumulative number of children who were home educated over the course of last year was over 115,000, which is an alarming 34% higher than before the pandemic. In some areas, the total number of children in home education more than doubled. At present, half of all children taught at home were found to have begun their retreat from the classroom during lockdowns, but this is not a new phenomenon that can solely be attributed to the pandemic. Data shows that prior to the pandemic, the cohort of children who are home educated was already growing by 20% year on year.
As the number of home-educated children increases, so should our drive to ensure that parents are able to exercise their right to choose how best to educate their child, that every child is supported to achieve the best educational outcomes possible and that all children are protected equally, whether at home or at school. Implementing a “children not in school” register is the natural first step to achieving that, and it is needed now more than ever.
As I said, parents should always be able to decide where their child is educated, whether in school or at home. However, currently our system is not enabling all parents to make a free and fair choice. Research by the Centre for Social Justice has uncovered a growing number of parents opting for home education because they feel that they have no other option, due to their child’s needs not being met in school. That could be a result of difficulties accessing special educational needs and disabilities provision, a lack of support for mental health, unresolved bullying issues or health concerns following the pandemic.
Most troubling is the number of parents who have felt coerced into home education for reasons other than the child’s best interest, through the scourge that is off-rolling. Evidence shows that families moving into home education following the threat of school exclusion are being left deliberately uninformed about the consequences of being moved off roll. This cannot be allowed to continue. Educating children at home is no small task for anyone, particularly for a parent who felt coerced into removing their child into home education against their better wishes.
I would like to take a moment to pay tribute to the many parents who are doing an incredible and admirable job, providing their children with a high-quality home education at great personal cost, time and effort. Having a “children not in school” register will allow us to offer assistance and resources to these families where appropriate, to support them as they continue to offer a high-quality home education.
Across Europe, oversight and assessment of educational progress is commonplace, but in England there is no such quality assurance. England is an international outlier in that respect, and this change is well overdue. Most concerningly, in 2020 the Child Safeguarding Practice Review Panel uncovered 15 incidents of harm involving children reported to be in home education. Those cases included severe harm such as serious neglect, emotional abuse and intra-familial harm. In three of the cases, the children had died. The panel concluded that these children were often invisible; they were not in school and did not receive home visits. Such safeguarding concerns have been echoed by local authorities, which have spoken about a range of concerns including county line involvement, gangs and exploitation, as well as child employment.
I appreciate the concerns that some parents have about being registered. However, not every child in home education is receiving the same high-quality education that their child is. Not every parent has voluntarily taken up the home education mantle, fully aware of the responsibility it brings. Not every child is safe at home. We are not seeking to disrupt those families who are successfully home educating. Most importantly, the register will allow local authorities to find and support those children who have been left on the fringes of education and who may be at risk of harm. It is time to bring those children who are out of sight and out of mind back into the light.
This is not just an educational issue but one of national economic importance too. Education is a major route out of poverty, opening doors to greater employment and lifelong learning. If children do not receive a suitable education that allows them to develop the skills they need, it will cast a long shadow over the economic wellbeing of the whole country and have a profound effect on economic inactivity—an issue that I know the Government are dedicated to tackling.
It is critical that the development and safety of children who are not in school can be monitored, so that we can ensure the welfare and education of every child. Introducing a “children not in school” register would facilitate that. It would improve local authorities’ ability to undertake their safeguarding and educational responsibilities related to children who do not attend mainstream education institutions, ensuring that no child falls through the net. I hope the Government will take this opportunity to implement a “children not in school” register, which is so important for the welfare of children, without delay. We must act now, or we will have failed this generation.
Question put and agreed to.
Ordered,
That Mrs Flick Drummond, Ms Marie Rimmer, Andrea Jenkyns, Andrew Selous, Lia Nici, Jonathan Gullis, Dr Caroline Johnson, Edward Timpson, Sally-Ann Hart, Mr Robin Walker, Sir Gavin Williamson and Kim Johnson present the Bill.
Mrs Flick Drummond accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 307).
Opposition Day
Cost of Living
(11 months, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:26 - The House divided: - Ayes: 45 / Noes: 287 - Question accordingly negatived.
16:40 - The House divided: - Ayes: 283 / Noes: 47 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
We now come to the Opposition day motion in the name of the leader of the Scottish National party on the cost of living. I inform the House that the amendment in the name of the Prime Minister has been selected.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I beg to move,
That this House regrets that both the Government and the Official Opposition support a damaging Brexit which the Office for Budget Responsibility predicts will lead to a four per cent drop in GDP; further regrets that the price for this continued economic mismanagement falls on ordinary households, with inflation remaining close to its highest level in 40 years and food prices soaring; therefore calls on the Government to follow the lead of the Scottish Government and introduce measures aimed at protecting the most vulnerable households from the crisis through measures similar to the Scottish Child Payment; also calls on the Government to reinstate the £25 a week uplift to Universal Credit, end the unfair benefit cap and the two child limit, follow the action of other European countries in tackling food inflation and put pressure on major retailers to pass on falling wholesale prices to consumers; calls on the Government to initiate an investigation into soaring supermarket prices and profiteering in the context of soaring inflation; and finally calls on the Competition and Markets Authority to utilise its full powers and impose maximum fines where evidence of price gouging is found.
The charge that is often thrown at us on the SNP Benches is to stop talking about independence and talk about the things that really matter. Well, here we are—we have brought forward a debate on the cost of living and the cost of Brexit—and, as far as I am aware, there is only one Conservative MP and not a single Labour Back Bencher wanting to talk in this debate.
The UK is in a sorry state just now. We have one of the lowest pensions in Europe, one of the lowest rates of sick pay, and increasing levels of poverty and inequality. For the first time, this generation thinks that it will be worse off than the generation that came before it. When I was first elected, I said that
“Food banks are not part of the welfare state—they are a symbol that the welfare state is failing.”—[Official Report, 14 July 2015; Vol. 598, c. 775.]
Eight years on, food bank use is through the roof and does not show any sign of stopping. Vulnerable people being forced to rely on the goodness of others to do something as basic as eat is barbaric: it was barbaric in 2015, and it is still barbaric now. Just yesterday, I saw an article where a woman was saying that if it were not for food banks, she would be a criminal, because she would have to steal food. That is like something out of a Dickens novel.
The folk who normally occupy the Government Benches will say that all of this has nothing to do with 13 years of austerity, 13 years of Tory Governments, or five Tory Prime Ministers wreaking havoc on the country. They say it is because of two reasons: covid, and the war in Ukraine affecting energy prices. Now, there is an element of truth in that, of course.
Mhairi Black
If the hon. Member had shown a bit of patience, he would have heard what I am about to say. [Interruption.] Give me two seconds; bear with me.
First, let us look at covid—this is for the hon. Member for Bosworth (Dr Evans). The Government awarded £10.5 billion-worth of pandemic-related contracts to companies in a VIP lane as part of no competitive process. That lane was dedicated to prioritising politically connected suppliers at the start of the pandemic. The New York Times has found that billions went to companies that had no prior medical experience. In fact, just down the corridor—I say “down the corridor”, but no one has seen her in a long time—we have Baroness Mone, who I think was last spotted on a yacht somewhere, so I think she is doing fine. She appears to have made a profit of nearly £30 million from personal protective equipment after she helped a company secure a place in that VIP lane—a company that the UK Government are now spending more than £10 million to sue after they discovered that the equipment was unusable.
This Government lost track of £4.5 billion of public money wasted through error and fraud during covid, and have no intention of finding those billions of pounds, but when a constituent finds that he was overpaid tax credits in 1999, they are unstoppable. They will hound people down; they will hunt them for £450 before they go after £4.5 billion, especially when a lot of it appears to have gone to their pals. This is a dangerous Government making bad decisions on top of a global pandemic. Mind you, we should not be surprised, given the fact that they seem to have been pished half the time at parties in No. 10.
Madam Deputy Speaker
Order. I should just say to the hon. Lady that she really must not use language like that. Please do not. I hope she will apologise for doing so.
Mhairi Black
Let me rephrase, Madam Deputy Speaker. They were inebriated; they were intoxicated; they were paralytic at parties in No. 10. Is that all right?
Mhairi Black
I do not see what I said that was not true, Madam Deputy Speaker, but I take it.
As I said, there is an element of truth in that covid has had a big impact, and the war in Ukraine has also had a global impact on energy supplies. However, unexpected events and conflicts will always occur, which is precisely why it is so important that we have Governments that plan in advance and think long-term to make decisions that will build our resilience in the face of the unforeseen.
The events in Ukraine only exacerbate the fact that the UK has not had a sensible energy policy for more than 30 years. Scotland has heard this song many times before; we have endured this kind of mismanagement for years. We are one of the only countries to discover oil and somehow get poorer, whereas comparable countries such as Norway sought to treat oil as a national asset to be used in the national interest, and invested it in a sovereign wealth fund that is worth over £1 trillion today. Similarly, in the 1980s, Denmark and the UK both had similar scale renewable wind programmes. Denmark chose to heavily invest in that sector, whereas the UK focused primarily on the cheapest and quickest option. If we fast-forward to 2016, we find that Denmark’s wind exports were worth over €7 billion, but the UK had wind exports of less than half a billion. It is like “Bullseye”: here is what you could have won.
Douglas Ross
The hon. Lady is speaking about energy policy. Does she agree with the SNP-Green Government’s policy on a presumption against new oil and gas fields in Scotland? [Interruption.]
Mhairi Black
As someone has said behind me, for a start, I would say that I am totally against nuclear. [Interruption.] I am about to answer the hon. Member’s question, but that is exactly what he wants. On what the Scottish Government are doing, I am very proud of the coalition Government and the fact that they are investing their money in places that make sense—they are investing towards a just transition. The hon. Member will like this point: the only sector in the UK that has made profits comparable with Denmark’s wind sector is the arms industry, at €7.2 billion. There is a political decision for you: our Government would rather fund weapons that bring death and destruction than fund industries that might just help secure life on this planet in the future.
Political choices matter, not just in facing the problems of the day, but to plan for a future worth living for. Again, this dangerous Government are making bad decisions.
Mhairi Black
No, I am on my last point, thanks. I want to address the Brexit-shaped elephant in the room—a Brexit that is shrinking our economy, limiting opportunity for our citizens and young people, and emboldening the worst in us. Just across the sea, a small, independent country such as Ireland, with a similar population to that of Scotland, has seen the highest economic growth of any country in Europe as part of an EU with access to the single market. In contrast, Brexit Britain is one of the poorest- performing economies, and we are closing ourselves off from the rest of the world. We cannot forget that this is a Brexit that is supported by the Tory party and the Labour party, that has been thriving off racist and bigoted dog-whistles, and that has cost us economically and, arguably, more so morally. It is a Trojan horse decked out in Union Jacks in the hope that we do not notice our food standards, our health and safety, our workers’ rights, and even our human rights eroding underneath it.
This is a Government that cannot afford to give £25 to the poorest in our society, but can afford to misplace £4.5 billion. This is a Government that force women to prove they have been raped before they can claim the benefits that they are entitled to. This is a Government that try to shame people—the sick and the disabled—into work, completely ignoring the fact that most people in poverty are in work. Most of the children who are growing up in poverty live in households where their parents work. The Government know that the minimum wage is not enough to live on, but instead of substantially raising it, they have decided, “Let’s rebrand it and hope that nobody notices. Let’s just call it a living wage, because surely nobody is paying that much attention.”
This is a Government that will applaud our key workers and our NHS, but draw the line at paying them fairly for all the work that they did. In fact, the Government go further than that: they now want to restrict the rights to strike and to protest for that fairer pay. They will hand millions of pounds over to their pals and their political chums. They will hand it via their WhatsApp groups and backroom deals, rather than raising standards in a country where living standards are sorely declining.
When I am asked, “Why do you support independence?”, the answer is, “All of the above”. I am tired of people in Scotland paying the price for disastrous decisions imposed by Governments who have no mandate in Scotland. The Scottish Government spend millions each year mitigating Tory policies. We defend people as best we can, and it works to an extent—no one in Scotland has endured the bedroom tax for instance, and child poverty rates in the UK are at their lowest in Scotland.
Dr Luke Evans
On child poverty, Bruce Adamson, who was Scotland’s Commissioner for Children and Young People, was asked, “Is Ms Sturgeon raising the bar or closing the attainment gap or opening opportunity for every child?” He turned around and said, “No, she is failing absolutely.” How does the hon. Lady respond to that?
Mhairi Black
I would respond to that by saying: give us the powers to be able to function. [Interruption.] If the hon. Gentleman just listens, he will hear that child poverty rates in the UK, as I said, are at their lowest in Scotland, where the Scottish Government are making a concerted effort to build a wellbeing economy. [Interruption.] I tell you what, if the hon. Gentleman wants to continue this back and forth, he should maybe have put in to speak in the debate, but I will leave him to google things on his phone for now.
The Scottish Government will always do what they can, but the truth is that one child growing up in poverty left to deal with the scars of poverty, which do not heal for a long time for a lot of people, is one too many. The Scottish Government have done and will continue to do all they can, but so long as 70% of financial powers—[Interruption.] The hon. Gentleman would benefit from listening to this bit. So long as 70% of financial powers and 85% of welfare powers are in the hands of him and his Government, it is not within the Scottish Parliament’s gift to solve these problems. In fact, I can think of one solution that would give Scotland the powers to act, and it begins with an i.
Whether it be the blatant profiteering during a global pandemic going unpunished, supermarkets keeping their prices high despite there no longer being a need for it or the eye-watering profits our private energy companies are enjoying, all while ordinary people cannot afford to cook hot meals, it could not be clearer: this is not a cost of living crisis; it is a cost of greed crisis. There is plenty to go about, it is just that few are hoarding it and this Government are helping them. This is a crisis made by the choices of this place. This place is the one that has the power—nowhere else. This is a crisis made by a dangerous Government making bad decisions.
The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; further welcomes the Government’s action to take advantage of the opportunities presented by Brexit, including the passage of the Genetic Technology (Precision Breeding) Act which will boost UK food security; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; and notes that the SNP and Labour would fail to grip inflation or boost economic growth with their plans for the economy, which would simply lead to unfunded spending, higher debt and uncontrolled migration.”
The world has been challenged by a series of events, including covid and the war in Ukraine, with knock-on effects to economies in every continent. In each of those, the Government have risen to the challenge. When covid hit our shores and the entire country had to isolate to save lives, we delivered groundbreaking and historic support to keep businesses afloat and families going. When our ally and friend Ukraine was invaded, we led the way to provide support internationally, and we continue to do so. The Prime Minister just yesterday announced further air defence missiles and support for our ally. Now, with economic challenges at our door, we continue to take the actions necessary to support the most vulnerable and set our country up for long-term, healthy, sustainable growth.
Already, as a consequence of the steps we are taking and decisions we have made, our country has avoided a recession. The International Monetary Fund has said that we are on the right track. Measures in the spring Budget deliver the largest permanent increase in potential GDP the Office for Budget Responsibility has ever scored in a medium-term forecast. That is as a result of Government policy. We have grown the economy faster than France, Japan and Italy since 2010, and at about the same rate as Germany since 2016. Just today, we see the unemployment rate remaining historically low. Inflation of course remains a concern, and we cannot afford to be complacent.
While I would not usually seek to give economic lessons to Members on the SNP Benches, it seems to be worth explaining in this instance that the reality is that high inflation in our country cannot be separated from global events. Other countries are experiencing similar situations to the UK. In the UK, inflation has primarily risen because of Putin’s illegal invasion of Ukraine and global supply chain pressures, which have pushed up the price of energy, goods and raw materials. Domestic inflationary pressures have also risen, as the UK labour market has remained tight, and challenges in recruitment have been reflected in strong wage growth. That has also pushed up the cost to firms of producing their goods and services, and that has been passed on into higher prices.
If we are to answer the challenge of high inflation, we must first accept that high inflation is a global challenge, which many major central banks are tackling. Nevertheless, I know that right now for many in society rising prices, including rising food prices, are causing worry and significant anxiety. People want to know when things will get back to normal and how they will be supported in the interim. Let me answer that directly. The Prime Minister pledged to halve inflation this year, and the latest Bank of England forecast published last Thursday shows that we are on track to meet that pledge. From its peak above 11% at the end of last year, inflation has begun to fall. Both the Bank of England and the OBR forecast that inflation will quickly fall later this year. We are also focused on growing the economy, reducing the burden of public debt, cutting NHS waiting times and stopping the boats. Those are all priorities of the British people, and therefore they are this Government’s priorities, too.
Alan Brown (Kilmarnock and Loudoun) (SNP)
How does stopping the boats help the cost of living crisis?
John Glen
The point I was making was that stopping the boats is a priority for the people of this country, and this Government are focused on the priorities of the people of this country. We are on track to meet these pledges to make our country and all nations, including Scotland, better off. It is also worth remembering that Scotland already has one of the most powerful devolved Parliaments anywhere in the world. The Scottish Government have substantial tax powers, including in relation to income tax, and agreed borrowing powers to further increase their spending, which I am sure the First Minister will be considering.
David Linden (Glasgow East) (SNP)
The Minister talks about Scotland having one of the most powerful devolved Parliaments in the whole world. How does he feel about Lord David Frost’s accusations that it has too much power and some of it should be taken away? Is that official Government policy now?
John Glen
I am not aware that Lord Frost is a member of the Government. I speak for the Government, and I am clear about what the situation is.
As it stands, the Scottish Government are well funded to deliver all their devolved responsibilities. The 2021 spending review set the largest annual block grant in real terms of any spending review settlement since the devolution Act, and that provided an average of £41 billion a year for the Scottish Government. That settlement is still growing in real terms over the three-year spending review period, despite inflation being higher than expected. On top of record spending review settlements, as a result of UK Government decisions at the autumn statement and the spring Budget, the Scottish Government will receive an additional £1.8 billion over the next two years. All that means that the Scottish Government are continuing to receive around 25% more funding per person than equivalent UK Government spending in other parts of the UK.
Chris Stephens (Glasgow South West) (SNP)
Since the autumn statement, food inflation has risen and is now at 19.2%. Can the Minister tell us what specific measures the Government will put in place to address food inflation?
John Glen
I fully acknowledge the pressures of food inflation—they are in line with those of many of our friends and neighbours, but less than in Germany, for example—and I will come on in a moment to set out the interventions the Government have specifically made to deal with that.
In addition, we are investing directly in Scotland, with £349 million of funding allocated through the first two rounds of the levelling-up fund, as well as establishing two new green freeports. As the Prime Minister has already said,
“all this talk of needing any more powers is clearly not appropriate”.
The SNP and the Scottish Government do not fully use the powers they have already. While, as we have seen today, SNP Members speak about a referendum that I do not believe they have a mandate for, we are levelling up and investing directly in local communities across Scotland.
Let me address the points raised by the hon. Member for Glasgow South West (Chris Stephens).
Alan Brown
If this Union is so successful, so good for Scotland and we benefit so much, why do we need money out of a so-called levelling-up fund?
John Glen
I think the principle of levelling up across the United Kingdom recognises that we do not have symmetry across the local economies of the United Kingdom, and it is about investing to improve the productive capacity. Let me make some progress.
Let me look at the economic matters at hand. As I mentioned earlier, energy costs have contributed significantly to price rises. That is why we are paying half of people’s energy bills. At the Budget, we announced that the energy price guarantee will remain at £2,500 for the next three months, funded in part by the energy profits levy. Just under £26 billion between 2022-23 and 2027-28 is expected to be raised by the levy, on top of around £25 billion in tax receipts from the sector over the same period through the permanent tax regime. This measure is saving the average family a further £160 on top of the energy support measures already announced. That includes this Government’s help for all domestic electricity customers with £400 off their energy bills through the energy bills support scheme, and in providing a £200 payment for households that use alternative fuels such as heating oil through the alternative fuels payment scheme.
Alongside holding down energy bills, increasing benefit payments, increasing pension payments, a council tax rebate, the multibillion-pound household support fund—attracting Barnett consequentials—and freezing fuel duty, we are giving up to £900 in cost of living payments to households on means-tested benefits. That means that more than 7 million households across the UK have been paid a £301 cost of living payment by Wednesday 3 May as the first of three payments. This will be accompanied by a £150 payment for people on eligible disability benefits this summer, and a £300 payment on top of winter fuel payments for pensioners at the end of 2023. The latest payment follows on from up to £650 in cost of living payments delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households. Altogether, support to households to help with higher bills is worth £94 billion, or £3,300 per household on average across 2022-23 and 2023-24. Aside from helping the most vulnerable, the OBR’s analysis shows that, taken together, the freezing of fuel duty, changes to alcohol duty and the extension of the energy price guarantee will further lower consumer prices index inflation by 0.7 percentage points this year.
Peter Grant (Glenrothes) (SNP)
Could the Minister explain to me what has happened to the energy coming out of a country such as Scotland, which is a net exporter of energy, that suddenly makes it almost three times as expensive as it was before? Where is the 200% or 300% increase that people are paying on their fuel bills going? It is not going to the people of Scotland, so who is taking that money?
John Glen
I have set out the number of interventions we have made to support individuals and the taxation levies on energy companies that we have set.
With inflation running high, I understand the temptation of some to accuse companies of profiteering, and the hon. Member for Paisley and Renfrewshire South (Mhairi Black) mentioned that in her opening speech. I would like to be clear with the House that the Government stand against that practice. At a time of high inflation, companies should not be seeking financial gain at the expense of their customers. Fortunately, we have not seen widespread evidence of this in the UK thus far. Corporations’ gross profits as a percentage of GDP were 21.4% in the third quarter of 2022, which is in line with an average of 22% over the last 20 years. The net rate of return for non-financial companies—a measure of company profitability—fell in the third quarter of 2022 and remains lower than 10 years previously. Instead, companies have been hit by a combination of rising labour, energy and raw material costs, and have reacted accordingly. As I have said, and it bears repeating, we do not expect them to profit excessively, but we cannot expect them unsustainably to absorb all cost increases, so the best course of action is the course we have charted thus far—to bear down on inflation.
This is a Government of action and delivery, as I have set out. We have pledged to tackle inflation, bring down debt and grow the economy, and we are doing just that. We said we would help the most vulnerable through these challenges, and we are, and we have refined and developed those interventions to suit the evolving circumstances. We are focused on strengthening our great Union, halving inflation by the end of the year, easing the pressure on households, and boosting the economy and protecting growth—proving our economy is more resilient than predicted—as well as boosting employment to well above pre-pandemic levels and ensuring more people have the security of a steady wage. As a united Government, we will continue to remain focused on what really matters to the British people.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Ian Murray (Edinburgh South) (Lab)
I am very pleased to be able to speak in today’s SNP Opposition day debate on the cost of living crisis, because for thousands of my own constituents—just as this is true for Members right across this House—this is the most pressing issue facing all households. After coming through the pandemic, millions of people have found the biggest health crisis in our lifetime being replaced by the biggest financial crisis in our lifetime, most of it compounded by this Government’s own decisions.
Bills are continuing to rise, and that is against a backdrop of wages failing to grow. The average Scottish worker’s wage is now £800 lower in real terms than it was when Labour was last in government. In my own constituency, it is almost £3,000 lower. At the same time, the price of everyday essentials has risen by an average of £3,500 since 2019. The cost of a typical food shop is up by £700 a year, and food inflation is far outstripping actual inflation, as we have heard. Transport costs are up by £800 and everyday fuel bills are up by almost £1,500. So it is little wonder that so many people are struggling to make ends meet. It is the No. 1 issue my constituents contact me about, and I am sure that is the same for every MP in this House.
The crisis shows no signs of abating; in fact, it is getting worse as the Government’s sticking plaster attitude to politics begins to run out. We used to say that too many are having to choose between heating and eating—we have used that phrase in this House a number of times—but it is becoming much more apparent that some are unable to choose as they cannot do either. Under Labour, we used to celebrate the fact that millions had been lifted out of poverty. Scotland’s two Governments are doing a very good job of thrusting them all back in—and more.
Despite what we have heard from the Conservatives—we will continue to hear this today, no doubt—about the miserly attempts by this Government to resolve the crisis, let us not forget that this crisis was made in Downing Street. They will blame and they have blamed covid and Ukraine, but we have had 13 failed years of this Government. Covid and Ukraine have merely hastened the chickens coming home to roost. Just nine short months ago, the former Prime Minister and the former Chancellor crashed the British economy with a reckless plan to give unfunded tax breaks to the very richest. The Conservative party crashed the economy, but there is no contrition and no acknowledgment of that.
The shortest-serving Prime Minister in history has left a long-lasting legacy of economic misery that ordinary working people up and down this country will be paying for for many years, and every Conservative MP who supported that reckless Budget was complicit and continues to be complicit. They are complicit in the Tory premium on everyone’s mortgages; they are complicit in the Tory premium on everyone’s food shop; they are complicit in the Tory premium on everyone’s energy bills; they are complicit in the Tory premium on everyone’s cost of living. And while being complicit in the premium, they are complicit in the discount on everyone’s pay.
Because while the former Prime Minister blew the doors off, this is a crisis that has been bubbling away for a long time. Growth in our economy has stagnated for more than a decade. In fact, had the economy continued to grow at the rate it did under the last Labour Government, we would have about £40 billion more to spend our public services and tackling the cost of living, without raising a single tax. That is the elephant in the room for the Conservatives. [Interruption.] They chunter from the Government Benches without any contrition for the fact that they crashed the economy and everyone is paying the price.
Since 2019 alone, there have been no less than 24 separate tax rises, all implemented by the current Prime Minister as Prime Minister or by the current Prime Minister when he was Chancellor. The tax and no spend Chancellor is now the tax and no spend Prime Minister, taking even more from the pockets of those that can least afford it at a time when they need every penny they can get.
Let me mention the story of constituent who came to see me worried about losing their family home because of higher mortgage rates. Those interest rate rises are a direct result of the Tories’ inflation crisis and the crashing of the economy. He said to me that he may lose his family home to pay for this Government being out of touch and their economic incompetence. Just think about that for a minute: a family losing their home as they can no longer afford their mortgage because of decisions made by this Government.
After 13 years, Britain is forecast to have the worst growth in the G7. In fact, if our economy continues along this growth path, by 2030 Britain will be less well off than Poland. The Government just do not get it, and they do not get the cost of living crisis. It is affecting everyone, with a disproportionate impact on the young, the old, the disabled, students and of course, as always, the poorest. The Government are out of touch beyond comprehension and should be out of time.
It is interesting, however, that in the motion and the amendment both the SNP and the Conservatives attack the Labour party. The SNP’s motion rightly talks about the damage caused by the Conservatives’ Brexit. Putting to one side the fact that this is partly an attempt to hide the SNP’s own complicity in the cost of living crisis, the mess the Tories have made of Brexit has undermined our country: we believe that and agree with the SNP on that. The Conservatives failed to negotiate a good deal with the European Union despite their “oven-ready” promises, and instead have left the country with a deal so thin and deficient that it has had lasting repercussions. Their entire Brexit project was driven by their own party interest rather than the national interest. Ever since, the Government have continued to weaken the relationships with our European neighbours and friends, with disastrous consequences for jobs, businesses and Britain’s place in the world. They are viewed by our European and international colleagues as untrustworthy law breakers.
But the SNP motion is completely wrong: Labour does not support a damaging Tory Brexit. The SNP playbook reeks of desperation and SNP Members absolutely know it. [Interruption.] They chunter, and they use that same line again and again, but I remind the House of their track record on Brexit: they would have taken Scotland out of the EU had they won the independence referendum in 2014; they spent less on campaigning to stay in the EU than they did on chasing 3,500 votes in the Shetland Scottish parliamentary by-election; they abstained on a vote in this House that would have delivered a customs union; they pressed for a general election in 2019 for their own party interest rather than continuing to try to fight the Government’s warped Brexit strategy; and we must remember that when the Division bell rang in this House to either back the thin trade and co-operation agreement or plunge the country into no deal, the SNP chose no deal. This Government have fundamentally failed to improve anything and the Brexit situation in the UK has been bad, but no deal would have been immeasurably inferior. Worse still, the SNP has a proposition for a separate Scotland that is incompatible with EU treaties for a new state wishing to join.
Alan Brown
Is it not the case that the reason we are not in the customs union is that some Labour MPs backed the Tories, and is it not the case that there are now two Baronesses in the House of Lords who were Labour MPs and have been rewarded for their work in helping deliver a hard Brexit—Baroness Gisela Stuart and Baroness Kate Hoey? That is where Labour were back then.
Ian Murray
Those two Baronesses were put into the House of Lords by the Conservative party, not the Labour party, and the reason they are in there and not in here is that they were on the wrong side of history. I draw the hon. Gentleman’s attention to what actually happened in this House in the two major votes when we had the indicative vote process in this House: I do not remember exactly now, but I think there were 42 SNP MPs, and they abstained on the customs union and the vote was lost by six—and that apparently was our fault. Let me emphasise again that on 12 or maybe 19 December, the Division bell rang in this House to either back the deal, which was not ideal—in fact it was a pretty disastrous deal—or back what was even worse, no deal, and the SNP chose no deal. That is what happened and that is what the Whip record in this place shows. The SNP’s Brexit and EU positions are as dishonest as they are broken.
The next Labour Government will build a closer relationship with the EU so that our businesses have the opportunity to grow and to create wealth and high-quality jobs across Britain. We see the trade and co-operation agreement as the floor of our national interest and not the ceiling, as the current Government do, and it will be up to the next Labour Government after the next election to renegotiate the TACA in 2025, as stated in the agreement. We will tear down trade barriers to help our businesses, we will support our world-leading scientists and service sectors, we will strengthen our security co-operation to keep us all safe and we will turn the UK into a green superpower, working with our EU neighbours and international partners. All of that will be done while repairing our tattered relationship and regaining the trust of others.
There is a reality that the SNP never acknowledges: the UK did leave the EU, and we cannot just wish that away. I know SNP Members like to promise the undeliverable because they know they will never have to deliver it, but anything other than saying that to the public is completely and utterly dishonest. It is only through sustainable economic growth that we can resolve the cost of living crisis, and that is exactly what Labour will deliver after the next general election.
Unsurprisingly, the SNP’s motion fails to mention that the SNP has been in charge of the Scottish economy for the last 16 years. A Scot who was finishing school when the SNP came to power is now in their mid-30s, perhaps with a family of their own, and they have seen that, much like with the UK Government, economic growth has been an afterthought, with Scottish businesses dismissed and jobs shipped overseas—although the SNP has done wonders for the UK motorhome industry, of course.
Huge promises have been made off the back of the renewable energy potential in Scotland, but little has been delivered. The truth is that the SNP Government—I give them credit for this—have created tens of thousands of highly skilled, high paid jobs in the renewables sector; it is just that none of them are in Scotland, but are instead in Denmark, Indonesia and everywhere else where that they have shipped off the contracts to foreign shores. So the renewables potential, which could create highly paid jobs and lower energy bills for everyone in Scotland, is being used to lower bills in Scandinavia, while we pay the highest bills in Europe. That is the work of the Scottish Government—nobody else.
When it comes to child poverty, after 16 years of SNP Government a quarter of Scottish kids are growing up in poverty. All the progress made by the previous Labour Government in lifting millions of people out of poverty has been reversed. Even the Children and Young People’s Commissioner for Scotland said the SNP had “absolutely failed” children and young people. SNP Members may enjoy their rhetoric, but their record of delivery is lamentable.
Their record on public services after 16 years of SNP rule is appalling. Their proposition for an independent Scotland is as economically illiterate as the Conservatives who crashed the economy; it is a proposition that will make the current cost of living crisis look like a tea party in comparison. Despite the SNP’s recent statements—including by their Westminster deputy leader, the hon. Member for Paisley and Renfrewshire South (Mhairi Black), who opened this debate—that they do not want to rid us of this Tory Government, I can assure them and the people of Scotland that a Labour Government will transform the country for every part of our country, because we have credible, fully costed solutions to the cost of living crisis.
The first thing we would do is introduce a proper windfall tax on the oil and gas giants, something repeatedly opposed by the leader of the SNP at Westminster until the polls showed it was popular. [Interruption.] SNP Members chunter again, but the record shows that when we brought to the House our proposition to introduce a windfall tax on the oil and gas sector, the SNP did not support it. Over the last year, the Conservatives have left more than £10 billion on the table which could have been realised by backdating the tax to January 2022, as Labour has been calling for, closing the tax loopholes the Prime Minister helpfully put into his windfall tax and taxing at the same rate as Norway. It is simply not right that oil giants are raking in unexpected billions of pounds off the back of British families. The next Labour Government will put an end to that injustice while the SNP sit on their hands, merely carping from the Opposition Benches.
The money raised from that would help Labour alleviate the pressure on families across Britain and would pay for our plan to help energy-intensive industries such as food manufacturers and processors with the cost of energy, helping to keep down prices in the supermarket. That point was also made by the Minister, although his means of doing that was not the same. We would cut business rates for small businesses, paid for by taxing the online giants, who have raked in huge profits in recent years while our high streets have suffered, and we would reverse the Conservatives’ decision to hand the top 1% of savers a tax break, while introducing specific measures to keep doctors in work. We would close the non-dom tax loophole—much to the frustration of the Prime Minister—and break the Tories’ high-tax, low-growth trap that is breaking our economy.
Listening to the hon. Member for Paisley and Renfrewshire South, it would seem that none of that matters and that we would be just as well off to keep the Tories. I do not agree, I am not sure that her constituents agree, and I am sure that the people of Scotland definitely do not agree. If the new First Minister and the SNP really thought that the people of Scotland were on their side, they would put their game playing to one side and call an election in Scotland so that the people of Scotland could choose their next First Minister. While we are on elections, perhaps the best way to resolve the cost of living crisis would be for the UK Government also to call an election so that we can kick this out-of-touch and out-of-time Government to one side.
Douglas Ross (Moray) (Con)
I will start with some reflections on the remarks made by the deputy Westminster leader of the SNP, the hon. Member for Paisley and Renfrewshire South (Mhairi Black), in opening the debate. She was critical that there was only one Back-Bench Conservative MP speaking in the debate. I was then reminded how, in a recent Holyrood debate led by the Conservatives in the Scottish Parliament on highly protected marine areas, the nationalist Benches behind the Minister were empty, despite it being a crucial issue for coastal communities up and down Scotland. When we debated the deposit return scheme, which is an absolutely dangerous scheme for businesses in Scotland, where were the nationalist MSPs that day? They did not turn up.
I have counted the number of SNP MPs in their places, and less than a quarter of the parliamentary party is here for its own debate on an issue that it says is crucial. I also noticed how the SNP’s Westminster leader, the hon. Member for Aberdeen South (Stephen Flynn), and his predecessor, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), were here for the opening speech and then left. I am not sure whether they are out on the Terrace getting another picture to show us all how well they get on, but they did not stay in the Chamber for the debate.
Hywel Williams (Arfon) (PC)
This is the UK Parliament. Will the hon. Member explain why no Tory MPs from Wales are here to speak this afternoon?
Douglas Ross
There are a lot of Conservative MPs from Wales, and I am sure that they are busy in other parts of the House. [Interruption.] Well, there are certainly more Tory MPs from Wales than Plaid MPs. When the SNP—[Interruption.] Yes, you are the only Plaid MP in the Chamber.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Will the hon. Member direct his comments through the Chair, please?
Douglas Ross
Thank you, Madam Deputy Speaker. I will not do it again so that you do not have to interrupt with a sweetie in your mouth.
There are opportunities for SNP MPs to speak throughout the debate, and they have not turned up. Three quarters of them are not here for the debate; they have refused to be here. This is an important debate, and there are lots of issues that we need to discuss, but many other topics could have been chosen by the SNP. When I was waiting for the motions to come in last night, I thought that we might have a debate about what our two Governments can do together to improve the lives of young people in Scotland, because that is a crucial issue. Just this week, we heard that the former Children and Young People’s Commissioner for Scotland, Bruce Adamson, said that the previous SNP leader at Holyrood had “absolutely” failed young people.
I thought that was the most extraordinary thing that we had heard on the subject—and it was until, in response to the intervention by my hon. Friend the Member for Bosworth (Dr Evans), who quoted those comments, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said, “Woo hoo—the big dog.” Is that the official SNP position on the previous Children and Young People’s Commissioner for Scotland rightly being critical of the abject failure of the hon. Member’s party in government for young people in Scotland?
Alan Brown
I know that a lot of people down here pretend that they cannot understand what I say because of my accent. It is quite embarrassing if the hon. Member does not understand what I said. I did not say words remotely close to that, so he can withdraw the remarks.
Douglas Ross
I am happy to give way again to the hon. Member if he will tell us what he was saying about the former Children and Young People’s Commissioner for Scotland. If I have got it wrong, please tell the House what you said.
Madam Deputy Speaker
Order. Please, do not refer directly to others. I think that the hon. Member for Moray (Douglas Ross) was asking whether the hon. Member for Kilmarnock and Loudoun (Alan Brown) would like to clarify what he was saying.
Douglas Ross
I will clarify that the hon. Member for Kilmarnock and Loudoun said, “Woo hoo—big dog.” That was his impression of the former Children and Young People’s Commissioner for Scotland. If that is not what he said, there is an opportunity for him in the Chamber to tell us what he thinks about the former commissioner. No? I think that maybe I wrote it down correctly at the time. I also noted how the hon. Member for Glasgow East (David Linden) whispered to the hon. Member for Kilmarnock and Loudoun not to intervene again, and I can see why. I do not think that anyone wants to hear any more from him on this.
We could have been discussing that issue, or we could have been discussing ferries. Of course, the UK Government have promised the people of Shetland and Fair Isle a ferry, which has not been made available by the Scottish Government. Of course, when the Scottish Government and the SNP get involved in ferry building, they go massively over budget and behind schedule. The ferries that the people in the Western Isles urgently need are five years overdue.
We could be speaking about drug deaths in Scotland. Again, our two Governments could work together to deal with that crucial issue, yet under the SNP, drug deaths in Scotland are not just the highest in the United Kingdom but the highest anywhere in Europe.
The last issue that I thought we could have been speaking about today was Scotland’s tourism. Many SNP MPs represent rural areas. I wonder if they do not want to speak about camper vans—is that why we cannot look at tourism? Perhaps we could have used the debate to hear whether any SNP Members have ever been in the now infamous camper van. It was apparently bought for the purpose of electioneering for their seats here. Did any of them get in that camper van? Did any of them know about the camper van? We could have discussed that.
Of course, we are looking at the crucial issue of the cost of living crisis in Scotland and across the United Kingdom. We did not hear a word from the SNP about the UK Government’s intervention, with £94 billion provided to help people in every part of the country to meet the challenges of the difficult period they have been experiencing. The autumn and spring statements delivered an additional £1.8 billion to the Scottish Government to help individuals, families, businesses and communities through this difficult time; it was the highest budget that the Scottish Parliament has ever had to deal with these issues. What response do we get from the SNP? It makes up falsehoods about its own interventions.
Less than a year ago, the SNP was claiming that it had put forward and spent £3 billion in response to the cost of living crisis in Scotland. That is the huge figure that the nationalist Government in Holyrood said they had spent to help people through that difficult and challenging time. The only problem for the SNP is that the figure is not true. The Scottish Parliament Information Centre has said that the actual figure is £490 million. The biggest chunk of the £1 billion that the SNP said it used to deal directly with the cost of living crisis was to implement a policy that was part of a platform that the SNP stood on back in 2014. It was Government policy since 2014, but last year it was included in the sums so that the SNP Government could suddenly claim that they were doing far more than they were. We need a bit of realism from the SNP and its Members.
Stephen Kinnock (Aberavon) (Lab)
On realism, Labour Members feel strongly that the best way to address the cost of living crisis is to have a Labour Government, which would involve Scottish voters voting Labour. Does the hon. Gentleman agree that voters in Scotland should vote Labour?
Douglas Ross
Let me be clear. The sole Labour MP from Scotland is in the Chamber. There are six Scottish Conservative MPs and, in huge parts of Scotland, the Scottish Conservatives are the greatest challengers to the SNP. We proved it in 2017, we proved it in 2019 and we will prove it again in 2024.
I was also making the point about the biggest issue—[Interruption.] Well, Labour Members are speaking a lot. I am very interested in how they will vote today. I am not sure whether they will support the Government amendment or the SNP motion. Or will they do what they normally do: sit on the fence and not take a position? We will find out quite soon. [Interruption.] I am happy to give way to the shadow Secretary of State for Scotland Secretary. No? We will see how it goes at decision time.
Marion Fellows (Motherwell and Wishaw) (SNP)
Could I gently say to the hon. Gentleman that decision time happens in the Scottish Parliament? Maybe you are there more often than you are here.
Madam Deputy Speaker
Order. We have got to stop addressing people directly. The hon. Lady is very experienced and knows how she should address people. We cannot have these conversations going on down the far end of the Chamber.
Douglas Ross
The point I was moving on to is that there is not a single mention in the SNP motion about the oil and gas industry, heating homes, and making sure people have affordable energy in their homes and businesses. [Interruption.] The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) says we should wait for his speech, but why not put it in the motion? Of course, the SNP cannot speak about oil and gas because it is in government in Scotland with the extremist Greens, who are against the oil and gas industry. The only reference to it in the opening speech by the hon. Member for Paisley and Renfrewshire South was in response to my intervention. I asked specifically about oil and gas, but I got an answer about nuclear. The SNP has given up on the north-east of Scotland and the 100,000 people employed across the UK in the oil and gas sector, because it would rather have the Greens in government and be anti-oil and gas. It would rather import oil and gas from other countries with a higher carbon footprint and a higher cost than support our oil and gas industry and those who work in it in Scotland.
Another issue that leads to problems with the cost of living in Scotland is taxation. Scotland is the highest taxed part of the United Kingdom. Indeed, the Scottish Fiscal Commission estimated that the divergence of Scottish taxation from the rest of the United Kingdom between 2017-18 and 2023-24 means that people in Scotland will have paid £1 billion more in taxation than their counterparts in the rest of the United Kingdom—£1 billion more in tax because the SNP has made Scotland the highest taxed part of the United Kingdom.
The SNP often likes to claim that the majority of working Scots pay less income tax than those south of the border. That has now been proven to be completely false. [Interruption.] I am sorry if I am keeping up the hon. Member for Glasgow East, but his constituents are paying more tax in Scotland because of decisions his Government have taken. If he thinks that is something to yawn about, I am pretty sure his constituents do not.
By not increasing tax thresholds with rising salaries, the Scottish Government have confirmed that anyone earning more than £27,850 in Scotland will pay more tax than those in the rest of the United Kingdom. We have calculated that the average Scot will earn £29,095 in 2023. Because of SNP policies and the taxation plans of the SNP Government at Holyrood, we are all paying more in taxation—more than £1 billion over that period. The majority of Scots and the majority of constituents represented by SNP MPs will be paying more in taxation because of the decisions taken by the SNP Government at Holyrood.
Ian Murray
The hon. Gentleman is rightly pointing to the high tax burden. I think he said—I apologise if I am paraphrasing—that we have the highest tax burden in Scotland because of decisions made by the Scottish Government. Does he therefore agree that we have the highest tax burden on working people in the last 80 years across the UK as a result of his own Government’s decisions?
Douglas Ross
I know we cannot have that conversation. The hon. Gentleman mentions 80 years. I am not sure what timeframe he is speaking about, but I was looking at the Scottish Fiscal Commission, which looked at the differential from 2017-18 to 2022-23. It said that people in Scotland paid £1 billion more in taxation than they would have done if they lived elsewhere in the United Kingdom. That is a damning indictment of the Scottish Government, who are not interested in growth and not interested in supporting people through the tax system. They are now making sure that a majority of Scots pay more in tax than people elsewhere in the country.
The final point I want to focus on is growth. The Government amendment rightly prioritises growing the economy. Of course, that also could not be included in the SNP motion because it does not support economic growth. It has brought Ministers into the Scottish Government from the Green party to serve alongside its own Ministers, and the Greens—they are quite open about this—are anti-economic growth. They do not believe in it. But we need our economy to grow. We need a growing economy to pay for the services that people across Scotland and across the United Kingdom rightly want and expect.
We also know that GDP grew more slowly in Scotland than in the rest of the United Kingdom during the period when Nicola Sturgeon was in office. From 2014 to 2021, GDP grew at a slower rate in Scotland than in other parts of the United Kingdom. The SNP has always been anti-economic growth. It has shown that with its previous policies and its previous performance. Now, by bringing the extremist Greens into the Government, it is continuing on that trend.
When we speak about the cost of living crisis and the issues affecting all our constituents, I hope that the SNP reflects more on what it could and should be doing with the powers and the finance it has in the Scottish Parliament. It should be looking to the future to grow Scotland’s economy and ensure we can fulfil our potential for all of Scotland, our constituents and our businesses. If we had a Government who were more focused on economic growth and on delivering for the people of Scotland, rather than on division and independence, Scotland would be a lot better off. I hope we will soon see the SNP Government in Scotland suffer for their repeated failures over 16 years, letting down young people, letting down taxpayers, letting down the health service, letting down education and letting down the justice system. This is a Government in Scotland who are tired and out of ideas. The sooner they are replaced, the better.
Owen Thompson (Midlothian) (SNP)
It is always interesting to follow the hon. Member for Moray (Douglas Ross). Some of his contribution nearly touched on the subject of today’s debate. I will try to stick to the topic at hand.
The cracks in this disunited kingdom are clear and there for all to see. The catastrophe of Brexit, Tory cuts, the UK Government’s pandering to the rich few and, unfortunately, Labour’s persistent lurch to the right has shown what we all know to be true—Scotland is held back by this place, this Government and any Government in this place. Both Scotland and my constituency of Midlothian are being strangled by the vice grip of Westminster control. The UK is the sick man of Europe, lagging behind other countries on economic growth. The UK economy grew by only 0.1% in the first quarter of 2023 and contracted by 0.3% in March, according to the Office for National Statistics figures. That is yet another clear indication that we need to find a new way to end this morass. The SNP wants to get Scotland back into the EU, with all the benefits that brings. While Labour backs Brexit and continues to dig a deeper hole for millions of families left struggling by the cost of living crisis, the Government here do nothing that will address any of these issues.
I can see the impact of rising food and energy prices every day in Midlothian. We are in an appalling situation, where soaring inflation and food prices have made it difficult for struggling families to put food on the table. It is heartbreaking to see so many families struggling to afford the absolutely basic necessities. There are some stark examples of the reality of the situation in my own constituency. One restaurant fears that nearly a third of outlets could be forced to shut down due to soaring energy and food prices. Its own energy costs have increased to £80,000 a year. On top of that, there are the unsustainable price increases. That local business has seen a 25% increase in the cost of rice alone. The cost of other basic ingredients such as onions, garlic and cream have doubled. That is having a real daily impact, with jobs and opportunities threatened across Midlothian and throughout Scotland.
SNP-led Midlothian Council has, thankfully, formed a cost of living taskforce to fight back against the onslaught, the first—as I understand it—such taskforce to be established in the UK. The taskforce has provided a £1.6 million cash injection to boost the local economy, but the UK Government desperately need to step up and accept their responsibility to do so much more. SNP-led Midlothian Council is taking action and the SNP Scottish Government are taking action with their limited powers, but what about the UK Government? The Westminster Government could restore the lower rate of VAT, which ended last March, for tourism and hospitality businesses. The UK Government must take urgent action to address the root cause of the shortages and ensure that Midlothian residents have access to affordable and nutritious food. They could uplift universal credit. They could end the benefit cap. They could take action to address soaring food prices and the increasing mortgage rates inflicted on so many by the disastrous failed experiment they attempted last year. Those are choices and the lack of action by this Government is a choice—it is their choice.
The impacts of Brexit and Tory economics are being felt across the country, and Midlothian is no exception. Given that the damage is so obvious, I find it astonishing that Labour is hellbent on inflicting yet more hardship by supporting so many of the Government’s policies.
Real change could be implemented now. We do not have to wait. We can find sustainable solutions to the challenges to ensure that our communities are supported through very difficult times. This Government could act now to stop the rot by investing in local agriculture and food production, as well as by boosting support for food banks and other community initiatives that help families in dire need. Instead, I have been struck by this Government’s apathy towards issues north of the border.
This Tory Government, augmented by tacit Labour support, have shown nothing but contempt for Scotland and my constituency. I recently contacted the Secretary of State for Environment, Food and Rural Affairs on all those issues. She could act immediately to ease the suffering happening right now, but so far the response is that it is not for the Government to intervene in such matters.
The Government could do so much more. I wish the Labour party offered a genuine alternative, but as far as I can see there is only one way for Scotland: for us to decide our own future.
Dave Doogan (Angus) (SNP)
Poverty fuelled by the Tory cost of living crisis is a scourge on all communities. I am certain that right hon. and hon. Members across the Chamber have done their best to mitigate the effects of that Tory cost of living crisis and the poverty that it inflicts on constituents—that is, after all, what we are paid to do. That must be pretty awkward for those on the Government Benches, but I am sure that they do it. I see those effects as a constituency MP and I saw them before as a local councillor working to try to help people in the most difficult circumstances.
Most of us in this place will understand that education is the route out of poverty, but that is made all the harder when the macroeconomic position in which people find themselves is set up against them.
Douglas Ross
The hon. Gentleman mentioned education. How does he view the defining mission that Nicola Sturgeon set to completely eradicate the attainment gap in Scotland? Was it a success or not?
Dave Doogan
As much as it pains me, I credit the hon. Member with a little more wit than that. If he thinks that 300 years of this Union and its effect on the people of Scotland—particularly the poorest—can be eradicated in a decade, he is more naive than I thought. He likes rhetoric, but he is not so keen on facts. My colleagues in the Scottish Government are sighted on the challenges of closing the attainment gap and are doing the right thing by our young people, but real life is much harder than that.
What Governments can do—particularly constrained Governments such as that of my colleagues, who exist under the profoundly suboptimal circumstances of devolution—is pull on the levers of investment in education. The hon. Member for Moray (Douglas Ross) might like to know that the Scottish Government invests £1,758 per child in Scotland, compared with England’s £1,439. In Scotland, his constituents in Moray will enjoy a far higher teacher-pupil ratio than elsewhere in the United Kingdom. In Scotland, there are 7,573 teachers per 100,000, versus England’s 5,734 per 100,000. That is a substantial difference. He might be keen to know that, when a teacher qualifies in Scotland, they will attract a remuneration of £33,729, whereas their colleagues in England will be on £28,000.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My hon. Friend is telling the House about the Scottish Government’s positive work on Scottish education. Does he agree that the Scottish Government are doing all that good work with one hand tied behind their back, because the attainment gap is fed most by poverty, and the levers to deal with it lie in Westminster?
Dave Doogan
I know better than to disagree with my hon. Friend. She is absolutely right. We heard from the Minister when he spoke to his amendment—and perhaps the hon. Member for Moray, I am not sure—about how the Scottish Government have tax-raising powers and do not use them. Having some tax-raising powers is like having a set of spoons and being told to set the table. It is not going to work. They need the whole suite of fiscal levers to make a difference to the economy. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) is right. We have one hand tied behind our back. We have domestic policy but we do not have the full suite of fiscal policy, and we will never dig into the root causes of the crises faced by communities and businesses in Scotland until we get independence.
The UK is a poor country. The Unionists in the House like to talk up GDP, which is an increasingly meaningless measure of wealth. It has its role, but GDP is largely irrelevant to the ordinary men and women in my constituency. The United Kingdom is so unequal that ordinary people working hard every day of every week of every year still cannot afford to feed their kids or pay their rent at the end of the month. That is not a meaningful economy working in the interests of ordinary people up and down these islands. It would be very different with a Scottish Government and an independent Scotland.
We have heard all about how this is entirely down to the illegal war in Ukraine and the covid pandemic. Interestingly, neither Labour nor the Tories want to lay any blame at the feet of the world’s worst unforced error and self-injury—Brexit. “Brexit has not done anything; it has been nothing but positive for the economy” according to those two delusional movements. In reality, compared with the pre-pandemic level, UK GDP in Q1 of 2023 was 0.5% lower. That contrasts with GDP in the eurozone being 2.5% higher than its pre-pandemic level. In the United States it is 5.3% higher and in Canada 3.5% higher. Among their chums in the G7, the United Kingdom is something of an outlier. I wonder what distinguishes the United Kingdom from those other countries: they did not take the most profoundly daft manoeuvre ever and exit the biggest trading bloc in the world.
Hywel Williams
Does the hon. Gentleman share my surprise that the only Brexit benefit that the Government can identify in their amendment is the Genetic Technology (Precision Breeding) Act 2023? Where is the abundance that we were promised?
Dave Doogan
The hon. Gentleman is right, and I will get to that in my conclusion. It did not escape my notice that in talking up Brexit the Government came up with the most abstract and niche policy affecting almost nobody.
On future growth, the IMF forecasts that UK GDP will fall 0.3% in 2023—the lowest figure in the G7 and it is the only member expected not to see growth in 2023. Total real-terms pay fell 3% between December 2022 and February 2023 alone, largely due to inflation and low public sector pay increases. On trade, UK goods exports to the EU remain below 2019 levels, but imports of goods from the EU, despite Brexit, were 1.4% higher in 2022 than in 2019. If it is taking back control to end up with a £92 billion trade deficit with the trading bloc that those people were trying to extract themselves from, I am not certain Brexit is going as well as they would have us believe. I smell a rat.
If the macro numbers do not add up—which they do not—I only have to look to my constituency to see the real cost of the Tory Brexit, which Labour will not oppose, on my fishermen and farmers. Fishermen now have to jump through umpteen bureaucratic hoops to get the same fish, caught in the same grounds, exported to the same market in France as before, when they just had to put it on a lorry. The system is in a state of stability and is working but, as Government Members will know, increased bureaucracy is a drag on trade.
Dr Philippa Whitford (Central Ayrshire) (SNP)
In my constituency, the fleet catches nephrops—lobster and langoustine. Some 85% of the catch used to be in a Paris market the next day. In January 2021, fishermen got nothing out, and they are still getting less for what they catch because they cannot get it there quickly enough. In our small fleet, we are seeing boats sold and two have already been scrapped. There will be fleets that disappear because of these arrangements—so much for “a sea of opportunity”.
Dave Doogan
My hon. Friend is absolutely right. Her fishers, on Scotland’s west coast, are encumbered by the access of all four nations to each other’s waters which the United Kingdom has come up. That is fine if fishermen are in Cornwall, and it is not too troublesome if they are in Peterhead, Arbroath or Montrose. If they are on the west coast of Scotland, they have to go through all the bureaucratic hoops to get their catch into the EU, but if they are in Northern Ireland, they can fish the very same grounds and get the catch directly into the market. A genius bit of organising, that was.
Douglas Ross
The hon. Gentleman is speaking about access. What do his Angus fishermen think about the SNP-Green plans for highly protected marine areas taking 10% of Scottish waters away? Does he support them or does he agree with his Government’s policy?
Dave Doogan
The nub of the hon. Gentleman’s question was whether I support the fishermen of Angus; I would have thought it was patently obviously that I do. In direct answer to his question about highly protected marine areas, the Scottish Government have been very clear—maybe he was down here, juggling jobs, when he should have been up in Scotland listening in his other job—that any community that does not wish to have a highly protected marine area will not have to be subject to it.
David Linden
I do not want to put too much on my hon. Friend, but after the debate will he be so kind as to dig out—indeed, fish out—a copy of the Scottish Tory manifesto that commits exactly to that and place it in writing to the hon. Member for Moray (Douglas Ross)?
Dave Doogan
I think that would be quite interesting. I am not suggesting for one minute that the hon. Member for Moray was saying one thing in 2019 and another thing now, but it would be interesting to see any clash of rhetoric.
Christine Jardine (Edinburgh West) (LD)
On that point, would the hon. Gentleman give way?
Dave Doogan
In a minute.
It is not just the fishers, because Angus is the garden of Scotland and its farmers are subject to the real constraints of Brexit. People talk about farmers as though they are just a guy with a tractor, but modern agricultural enterprise is a vast undertaking involving plant and seed suppliers, as well as any amount of different subcontractors and small businesses, so when I talk about agriculture I am talking about hundreds of small businesses across Scotland, and thousands across the United Kingdom.
My farmers in Scotland are subject to the UK Internal Market Act 2020, for which my colleagues in the Scottish Government would not give legislative consent, because it is so damaging to Scottish agriculture, even before the introduction of the Australia trade deal on top of it, which undercuts with lower standards. That has created a market in which we cannot possibly compete, where they do volume and we do quality. Scottish agriculture is different to English agriculture, which is much bigger. We do not do bulk in Scotland, which gets to the heart of how broken the Union is. Did the UK Government try to construct that system to promote enterprise, jobs and prosperity in agriculture in Scotland? No, they did not. They did it on the basis of their ideology.
Turning back to business investment, where there is a thriving business community, there are jobs and upward pressure on wages. That is what we need to get people out of poverty—
Alan Brown
Will my hon. Friend give way to the hon. Member for Edinburgh West (Christine Jardine)?
Christine Jardine
I was intrigued to hear the hon. Member talking about fishing policy. What is his view on the fact that his own party of government in Scotland has not seemed able to agree since the former Minister criticised the Government’s policy? I am fascinated that he is talking about supporting businesses when every business in my community tells me that they have nothing but complaints about the business rates imposed by the Scottish Government.
Dave Doogan
I thank the hon. Member for her intervention, but I would love to see the evidence that every single business in Edinburgh West is critical of the Scottish Government, but that is not what she said, is it? Let us not forget that the business environment of Scotland is far preferable, particularly for small, independent traders, to the rest of the United Kingdom, because we have the small business bonus and rates do not kick in for small businesses until they have a rateable value of £15,000, unlike a rateable value of £12,000 in England. So I will not be taking any lectures from any Unionist about the business environment that we have created in Scotland.
Business investment grew in real terms steadily between 2009 and the Brexit vote. It then failed to grow at all between the Brexit vote and the pandemic, and has not returned to pre-Brexit levels. It fell off a cliff after the pandemic and has increased barely to where it was 10 years ago. As I said earlier on, when it comes to the nature of the United Kingdom, this is now a poor country. I do not know if that comes as news to anybody on the Government or Opposition Benches: this is now a poor country, irrespective of the GDP that gives a false prospectus of what it is to live in this country. Comparisons for 2021, in pounds rather than dollars, show that the UK is 14th, behind Ireland, Australia, Iceland, Denmark, and Norway. In terms of OECD countries, the United Kingdom finds itself in a very poor position, with an average salary of £37,500. I appreciate that many people listening to the debate will think, “Well, I wish I was on £37,500,” but that is an average salary, which is pushed up by a few colossal salaries. What is far more interesting and compelling is the median salary, which is down in the low £30,000s.
It is helpful in demonstrating how poor the United Kingdom is to compare like-for-like occupations. Nurses are paid more in Canada, Ireland, New Zealand, the Netherlands, Norway, Switzerland, the United States, Belgium, Iceland and Luxembourg. The average salary of a nurse in the United States from 2016 to 2019 was £54,900; in Belgium it was £55,000; and in the Netherlands it was £46,000. However, in the UK it was £33,000. That is a directly comparable job and gives an interesting perspective on where we are.
When adjusted by purchasing power, salaries are even worse. Not only are the salaries lower, but the cost of living, thanks to the Tory party, is even higher. The purchasing power of a nurse’s salary is lower in the UK than the OECD average and lower than in Slovenia, Ireland, Spain, Germany, Denmark, the Netherlands, Belgium and Luxembourg.
Current estimates of an average nurse’s salary in the UK are that they will go up to £35,600, but the salary pay scale for new nurses in band 5 in Scotland tops out at £37,664, which is probably why the health spend per person is £3,490 in Scotland as opposed to £3,192 in England. The number of staff in the NHS in Scotland per 100,000 people is 2,845, compared with 2,224 in England. We value our nurses even when they are training, by making sure they get a £10,000 bursary in Scotland, rather than a £5,000 bursary. These are the best jobs in many of our communities. Teachers are very much in the same position.
The hon. Member for Arfon (Hywel Williams) mentioned the Government’s amendment to the motion, but what I have said and what some of my colleagues are about to say lays bare the myth within it. The amendment reads that this House
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt”.
Well, inflation has not halved, and the Government are not acting but hoping. The economy is shrinking, but even it is was not—sorry, the economy is not shrinking; it is growing. The Government are saying that we have the highest growth in the G7, but we are starting from the lowest base. Growth is relative to where it starts from, and the Government are not too keen to talk about that. They are saying that they are taking action to reduce debt. When they took over, there was £0.8 trillion of debt in this country, but that is now getting on for £2.5 trillion of debt. They have completely lost control of debt, and they have obviously lost control of reality as well if they are suggesting that this is a measure of their doing really well. We have already mentioned the obscurity of the Genetic Technology (Precision Breeding) Act 2023 as a measure of how good Brexit has been. If that is what we have to show for Brexit, a lot of people up and down these islands will be scratching their heads and wondering whether it was all worth it.
The Government go on to note in their amendment that
“the SNP and Labour would fail to grip inflation or boost economic growth with their plans for the economy”.
Well, they are half right, because Labour would wreck the economy. It would certainly fail to get a grip on inflation or improve growth, for when has it ever done anything else? Show me a time when Labour was put out of office without leaving the economy in tatters—and it will be the same every time for the UK population. Scotland is subject to the electoral will of the UK—[Interruption.] The hon. Member for Edinburgh South (Ian Murray) challenging me to be a Tory? That is a good one.
We need to educate our people well, and ensure that they can use that education in their employment environment so that they can have well-paid jobs enabling them to pay their way and do better than their parents. Even with the limited powers that we have in Scotland, we have a higher level of foreign direct investment than any other part of the United Kingdom; we have the best small business environment in the UK, with the most attractive small business bonus; our level of research and development is enviable according to UK standards; we have the most universities per head, with incredible research and innovation taking place in them; and our median wage income tax rate is lower.
The hon. Member for Moray, who said a lot earlier, talked of the scandal of paying for services, which he calls tax. It is tax, obviously, but he looks at only one side of the equation. People under a social contract in Scotland have elected a Government who support funded interventions in, for instance, eye tests, better-paid nurses, tuition fees, pupil equity funding, and all manner of other social contract interventions. The hon. Gentleman is supposed to be a Tory, and the Tories are supposed to be the party of business. They are supposed to be, at the very least, fiscally and economically literate; although I would respectfully suggest that the evidence implies otherwise. The hon. Gentleman must know that there is nothing for nothing. Although we rhetorically describe these things as free, they are not free; they need to be paid for, and I suggest to him that the people of Scotland know that very well.
Deidre Brock (Edinburgh North and Leith) (SNP)
Lower bills, lower energy costs, tariff-free trade with the EU—would that not make life a bit easier as we contend with this Tory-led cost of living crisis? But those were also the bullish forecasts of Brexiteer MPs and the “leave” campaign back in 2016. Of course, industry groups knew far better than to take their claims at face value. The Food & Drink Federation warned that prices for shoppers were likely to go up as the pound fell. Rising food bills were also predicted by the Resolution Foundation—a finding, we should remember, that was branded “ridiculous” by leading Brexiteers who insisted to us that the opposite would happen. We were all dismissed as “remoaners”. In fact, frustratingly, we have been shown to be Cassandras, which I am sure will be appreciated by Conservative Members who are versed in the classics, although the Minister’s inability even to utter the “B” word in his opening speech suggests that they have learnt absolutely nothing.
Early in 2017, I spoke in this place of the warning from NFU Scotland that Brexit was the biggest challenge to Scottish food producers in generations. Farmers, food processing companies and hauliers needed workers from the EU, access to European markets, and guarantees on future financial support. Many of Scotland’s farmers depended on that financial support to remain viable businesses, as did fishers and so many in our food manufacturing and processing industries. How often did my colleagues and I come to this place to repeat the warnings from industry groups, the Scottish Government and other devolved Administrations? But all that we heard back was ridicule, slander and dismissal.
Fast-forward seven years—and more than three years since we left the EU— and food prices are reportedly at their highest level for 45 years. Research published in April by Which? found that the price of staples such as cheddar cheese and white bread had shot up by as much as 80%, while the cost of porridge oats and semi-skimmed milk had risen by more than a third; and, of course, this is disproportionately impacting the least well-off among us. A recent study by the Co-op and Barnardo’s found that one in three young people aged between 10 and 25 has reported that their family has had to rely on food support.
Yes, the causes of inflation and the cost of living crisis are multifaceted. Yes, covid and the effects of Russia’s war in Ukraine have exacerbated price rises. Those have had an impact the world over, but, nevertheless, cost rises are cutting deeper here. The UK is the worst-performing economy in the G7. As a result of Brexit, GDP has fallen by 4% and exports are down 15%, according to the Office for Budget Responsibility. The European Central Bank’s new report says that Brexit has caused
“a significant decline in trade with the United Kingdom in almost all cases”
of anywhere between 10% and 25%. Goods exports are lagging behind those of all other major economies, which in Scotland amounts to a loss of £2.2 billion since we left the EU.
As we read in The Irish Times yesterday, in its recent update on financial projections for the year and the performances of its principal export economies, Ireland’s Department of Finance noted that
“at the end of last year the level of activity in the UK is not only 7 to 8 per cent below the level implied by the hypothetical no pandemic/no war scenario, it was also below its pre-pandemic level. This is in sharp contrast to other regions such as the euro area and US, where activity has surpassed pre-pandemic levels and…almost back at levels implied by the pre-pandemic trend growth rate.”
Horrifyingly, it is expected that things may well get worse before they get better, partly owing to the new customs checks for EU imports that will be phased in from October. While those prophetic Conservative Members insisted that there would be minimal costs, their Micawberish optimism was not reflected in the UK Government’s own internal estimates, which put the cost to importers of these checks at up to £400 million a year. The British Chambers of Commerce, the British Retail Consortium and the British Meat Processors Association warn of higher inflation and suppliers passing on some of the extra costs, which will mean higher prices in shops.
The Scottish National party welcomes the upcoming investigation by the Environment, Food and Rural Affairs Committee of the cost of producing food and the price burden on consumers. There are growing concerns across Europe, and notably in the European Central Bank, that soaring food prices are also a result of “greedflation”,a trend with which the UK Government unfortunately seem quite comfortable. If they are not, why are they not taking real action to solve the problem? Will they call another food summit at No. 10, where the Prime Minister will pretend once again to listen to the voices of farmers, fishers and food producers of all sorts before, no doubt, trotting off to do exactly as his neo-liberal thinking directs? He did not listen to those voices before his Government negotiated trade deals so bad that the former Secretary of State for Environment, Food and Rural Affairs finally even felt compelled to come clean with the criticisms that he had unfortunately kept to himself before then.
Dave Doogan
Does my hon. Friend agree that the Home Secretary’s remark that there is no reason why ordinary British people cannot pick fruit demonstrates that this Government—regardless of who is in office in which Department—have zero understanding of modern agricultural methods, and are not to be trusted with rural environments?
Deidre Brock
I absolutely agree with my hon. Friend. I was shocked to read the Home Secretary’s comments, which I thought were patronising and did not reflect the reality of modern agriculture, or, indeed, the real skills that are needed by, for example, berry-pickers—which is certainly something that the Scottish Affairs Committee learnt when some of its members took part in that activity a few years ago.
When will the UK Government follow the lead of other European countries, and intervene to bring down the price of food and other necessities? France, for example, introduced a “price block” on staple products. What pressure will be put on major retailers to pass on falling wholesale prices to shoppers? It is vital for the Competition and Markets Authority to utilise its full powers and impose maximum fines where evidence of price-gouging is found.
Although Brexit offers nothing to Scotland except economic hardship, the SNP is now the only major party that opposes it. Labour is not only pro-Brexit, but seems to be set on preserving some of the Tory Government’s most damaging policies. Even the DWP has at last admitted that benefit sanctions do not work, but I was shocked to learn that Labour’s shadow Work and Pensions Secretary has U-turned on the promise to scrap them, instead characterising people who are out of work due to health problems as a “growing burden” on the economy and individuals.
In the last couple of years, food security has become an issue of huge significance, and yet agricultural production in Scotland and the rest of the UK is set to slide. Immigration policy still falls short by some way of the numbers needed by our once thriving berry, brassica and other foods, fishing, food processing and manufacturing sectors, already hit by skyrocketing inflation, fuel and fertiliser costs.
Judging by their amendment, the UK Government seem to think that their failings in other areas can be compensated for by silver bullets such as gene editing. In January, the Scottish Parliament declined to give legislative consent for the Genetic Technology (Precision Breeding) Bill, which along with the United Kingdom Internal Market Act 2020, is yet another attack on the integrity of the Scottish Parliament in specifically devolved areas such as agriculture, aquaculture and animal welfare. The impact assessment for the Bill recognised that
“products entering the market in England would also be marketable in both Scotland and Wales.”
Yet, wholly predictably, the Tory Government made no attempt to work closely with the Scottish Parliament. We now face the prospect of gene-edited products being sold in Scotland, unlabelled, unauthorised by Scottish Ministers and without consumers in Scotland having been properly informed or consulted on how they feel about that. It also means undermining once more the Scottish Government’s aim of staying aligned with EU regulation as far as possible and practicable. We do not want to erect further barriers to our largest market, so sensibly we are waiting to see the outcomes of the EU review of gene-edited products before acting—unlike the UK Government.
Amid this mess, we are stuck between the Conservative party, many of whose deluded members appear to think Brexit would work if only us miserable remoaners wished hard enough, and the Labour party, which seems to think that offering better administration of Brexit will do the trick rather than being brave enough to admit to the electorate what a disaster it has been. Ultimately, until Scotland becomes an independent nation and full member of the EU, we will be constrained by Westminster’s two-party consensus, unable to harness all the powers needed to tackle the cost of living crisis, fund our objectives in food production, set our own immigration policies or fully realise the potential of our food and drink export industries.
Nevertheless, Scotland is thankfully taking a very different approach to social security. The IFS found that the lowest income families in Scotland are significantly better off thanks to the Scottish Government’s progressive tax and benefit policies. The Scottish child payment, for instance, has been further expanded to eligible six to 15-year-olds and increased in value to £25 per child per week—a real game changer. But our hands will always remain tied while 85% of welfare expenditure and income-replacement benefits remain reserved to Westminster.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the next speaker, colleagues will be aware that another debate follows this one, so my advice is for Members to stick to around 10 minutes each.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
I congratulate the SNP on introducing this debate. It is an important issue, and I am inclined to support the motion, but it is far too polite and lacks real challenge and ambition. We want to begin to tackle the scourge of poverty and the Alba party’s plan would include an annual £500 payment to 500,000 low earning households in Scotland; increasing the Scottish child payment to £40 a week for 400,000 children in 250,000 households; extending free school meals to all primary and secondary pupils in Scotland; and, most importantly, writing off the almost £1.4 million of debt to local authorities from parents who cannot afford to pay. We would also double the education maintenance allowance from £30 to £60 a week for 16 to 19-year-olds in school or college, and introduce universal access to sports facilities for all children and young people under 18.
On a personal note, even all that is not quite enough, but it would be a start. The current crisis that we are experiencing is not an accident: it is the result of unfettered capitalism and an absence of social conscience in politics. Disaster capitalists have a playbook, and what has been happening in the UK over recent years follows it perfectly: create or harness a problem, privatise and profit, dismantle public services and hand over the resources of the people to the private corporations. Governments are responsible for that, and in Scotland we have rightly complained about that for many years with North sea oil and gas. The people have never benefited, although they got a few jobs out of it. Now, with the Energy Prices Bill, Scotland will get no supply chains or service jobs—nothing. The Scottish Government have replicated the mistakes of Westminster, selling off £350 billion licences for ScotWind for £700 million. Scotland will never benefit from that. The mistakes of Westminster should not be repeated by the Scottish Government.
We know all this is because of rapacious greed. People who accumulate money need to answer the question of how much is enough. As with all addictions, the need to feed the addiction is endless, and the impact on others is manifest. The UK Government put out the red carpet for the super-rich, the high earners, the non-doms, based on the fallacy that trickle-down will reach the poorest. Trickle-down is a neo-conservative lie: it does not happen. The rich accumulate and the poor suffer. As the indulged rich hoarded more through the pandemic, doctors, nurses, teachers, train drivers and many others were denied a liveable wage or a meaningful pay increase. That is made worse in Scotland because we have the political and economic dominion of a Parliament in which Scotland can never win a vote.
The robbery of our vast energy resources from fuel-poor Scots is an outrage. The Treasury gets £80 billion in tax profits from the current boom, and 124 billion kWh of energy will be supplied to England by 2030 for free. Scotland will never see anything in return from the UK Government. Just that energy alone has a value of £11 billion per annum, and Scotland gets nothing. The food banks in my constituency have gone from a monthly expenditure of £3,000 to more than £20,000, and they can hardly afford to keep going. The energy costs of the Fife Ice Arena in Kirkcaldy have gone from £3,000 a month to more than £35,000. I wrote to every energy giant in my constituency and all those who operate off the Clyde coast to ask for help: none of them offered a penny. They have eye-watering profits but would not offer a penny of help to the communities from which they profit.
UK Labour offers nothing better. It talks of pooling and sharing, but it is really taking and driving away. It wants to use Scotland’s vast energy wealth to cut the costs of English council tax. Scotland still gets nothing.
There is a real scandal brewing on energy. The costs being endured by people and businesses are front-loaded, with up to 70% commission going to the brokers who sign them up to suppliers. It is an absolute scandal, and none of it is declared to businesses and individuals when they sign up.
At the beginning of covid, the last Prime Minister but one promised there would be no profiteering, but the Government used the vehicle of VIP lanes to pass on billions to well-connected Tories. At the same time, the Government laid waste to the domestic diagnostic sector, doing dodgy deals through shell companies that suddenly appeared and then melted away just as quickly. Let us not pretend that we are all in this together. Stop the spin and tell the truth. Facilitating and celebrating greed is an affront to human decency.
Patrick Grady (Glasgow North) (SNP)
Supermarket shelves empty of food and basic goods, unaffordable energy prices and inflation and interest rates going through the roof—these were the nightmare, apocalyptic scenarios facing Scotland if it voted for independence, or so we were told in 2014. Voting to stay in the Union, on the other hand, would guarantee freedom of movement, access to the European single market and the protection and enhancement of the Scottish Parliament’s powers. And we were told there was no chance that the then Mayor of London, now the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), would ever become Prime Minister. Those arguments, promises and vows were enough to persuade a majority of people across Scotland to say no, or at least not yet, to independence.
People now go shopping every day in Glasgow North to find supermarkets short of goods. They worry about the cost of heating their home and they despair as their rent or mortgage payments climb ever upwards. Access to Europe is more difficult, Tory Lords openly call for devolution to be wound back and we are all living with the consequences of a Johnson premiership. People in Scotland did not get what they voted for nine years ago. The United Kingdom, as it was on 18 September 2014, effectively no longer exists.
Every country in the world is having to deal with the consequences of the pandemic and of Russia invading Ukraine. Only one country in the world is having to deal with the impact of Brexit. Just as people who voted to stay in the Union were promised one thing only to be delivered something completely different, people who voted for Brexit are finding the reality very different from what was promised. There is no £350 million a week for the NHS, there has been no mega trade deal with the United States and this Parliament has not taken back control. The Tory Government have simply replaced Brussels bureaucrats with Whitehall mandarins as they award themselves ever-increasing powers through their Brexit legislation.
When Scotland voted not to become independent, the SNP and the Scottish Government accepted it and wanted to find a post-referendum settlement that could work for everyone, which is why we joined the Smith Commission and why SNP MPs came down to Westminster to lead, not leave, the UK. Compare that with the Conservative response to the European referendum. They delivered the hardest possible Brexit on the narrowest of mandates, and still it is a Brexit that satisfies no one. It is not isolationist enough for the European Research Group and the Maastricht rebels who occasionally prowl the Tory Back Benches, and it is still causing economic chaos up and down the country. The Government wave around the Windsor framework as if it is some kind of triumph, and they proclaim that Northern Ireland has the best of both worlds. By their own definition, the rest of the United Kingdom must have something worse.
The motion before the House points to the Office for Budget Responsibility’s forecast of a 4% drop in the UK’s GDP entirely attributable to Brexit. Every day, the evidence of this is already visible in Glasgow North and around the country: the delays in getting essential supplies to shops and services; the staff shortages in social care, the health service, hospitality and entertainment; and the academic research and collaborations that are simply no longer happening because it is now too complex.
I have lost count of the number of small business people and entrepreneurs who have told me that they had to set up subsidiary companies or fresh outlets in European cities, at extra cost and expense, because of the hurdles that Brexit put in the way of them developing their business, and I have lost count of the number of constituents who are facing unexpected and sometimes unexplained bills, particularly from energy companies. Many of us will not have seen such cases before 2020. In fact, I think it has been a shock to many energy companies, too, because they are struggling to deal with the volume of inquiries and disputes, which is why I strongly support the campaign of my hon. Friends the Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and for Glasgow North East (Anne McLaughlin) to better hold those companies to account in returning credit balances to customers and making prepayment meters much fairer. I also welcome the efforts to amend the Energy Bill to empower local communities to generate more of their own clean, green energy for use in their neighbourhoods.
Those are the kinds of solutions that groups such as Parents for Future and the Warm this Winter campaign, which I recently met in the Hillhead library, want to see. They want to see a fair, just and sustainable transition away from fossil fuels across all sectors, which could be at the heart of tackling the cost of living crisis. Localising our food systems, investing in public transport and active travel, and reducing, reusing, recycling and repurposing our consumer goods could help to create more jobs and make everyday life more affordable at the same time.
Those are the prizes available if we live up to the commitments that we all made, including this Conservative Government, to achieve the sustainable development goals and the targets set at COP26 in Glasgow and at other climate conferences, but all that seems to have been forgotten in the rush for the hardest possible Brexit and the Tory concept of a global Britain that is all about the imagined glories of the past.
The reality is that a Labour Government, by their own admission, would not change any of those fundamentals. A Labour Government would be pro-Brexit, anti-immigration and terrified of any meaningful constitutional reform.
Pete Wishart (Perth and North Perthshire) (SNP)
My hon. Friend is making an exemplary speech, as always. We have seen how the Labour party has aligned itself with the Tories on Brexit, on immigration and on protest legislation. For how long will Labour be in step with the Tory attacks on our democracy, our devolution and our Parliament?
Patrick Grady
My hon. Friend is right to raise those concerns. We hear the drumbeat against the hard-won powers of devolution, which used to enjoy consensus, and we see the centralising tendency of all Westminster Governments. Whatever their shape, they want to centralise power here in the House of Commons. Labour has been promising reform of the House of Lords for more than 100 years, and it has been in power once or twice in that time without making a vastly noticeable difference. I disagree with the expectation that anything will change significantly. There will be an interruption, a brief interlude, as there always is, before the UK reverts to a Tory Government for whom Scotland has not voted.
Dr Whitford
Through the United Kingdom Internal Market Act 2020, this Government basically drove a coach and horses through devolution, and the Labour Benches were notably empty during that Act’s passage.
Patrick Grady
They are notably empty this afternoon, too. My hon. Friend is correct. That will continue to be the case as far as Scotland is concerned, because I have every confidence in the SNP continuing to return a majority of seats in Scotland for as long as we are in Westminster. That future will be short-lived because, as the 78% of voters in Glasgow North who voted to remain in the European Union and the 50%-plus who voted for independence in 2014 already know, it is now up to Scotland to choose a different path.
Scotland will have, and has always had, the right to choose to become, once again, a member of the community of nations in its own right. The reality is that when the majority of people in Scotland are prepared to vote for independence, Scotland will become an independent country. No Supreme Court, no Westminster Parliament and no constitutional convention made up by the Better Together campaign will be able to stop that.
With the full powers of independence, we will not need to spend resources mitigating the impact of failed UK Government policies of whatever colour. We will be able to support and empower everyone who calls Scotland home, and we will be able to work with like-minded nations to build a fairer and more peaceful planet for everyone: the early days of a better nation in the early days of a better world.
Christine Jardine (Edinburgh West) (LD)
I have to say that my wee heart skipped a beat with delight when I saw that finally, in an Opposition day debate, the Scottish National party was going to talk about something that mattered to the people of Scotland: the cost of living crisis and the problems our constituents face. Surely few of us would dispute that the cost of living crisis being faced by our constituents is a constant and overriding concern for far too many households in this country.
I have often stood here and criticised the Conservative Government, on their energy price hike; inflation; interest rates; and the situation that faces our young people throughout the UK, where too many of them live with the fear that they will never be able to own the house of their own that they would like or that the ever-increasing rent rates in this country, which in my city of Edinburgh are outrageous, put too many options beyond their reach. We must then consider the fact that the Chancellor did not listen when the Liberal Democrats asked him to cut energy bills by £500 per household, which would have made a significant difference to so many families; that the growth in the economy in the first three months of this year was only 0.1%; that, according to the Office for National Statistics, average pay, after taking inflation into account, fell by 3%; and that the take-home salary fell by more than £1,400.
I was delighted when I saw this motion, because our economy in the UK is on its knees and so are far too many families, and not just in Scotland. My disappointment is that SNP Members do not seem to appreciate that they in a unique position, of which I, like many other Members, are jealous, as their party can do something about it in Scotland. By that, I do not mean independence, which it turns out this debate is actually about after all.
Christine Jardine
I will give way in a moment. In Scotland, and particularly in Edinburgh West, I hear every week from my constituents. I hear from business people who managed to make it through the pandemic but are struggling with energy costs and with the burden of business taxes, which the Scottish Government could alleviate but choose not to—
Amy Callaghan (East Dunbartonshire) (SNP)
I wonder whether the hon. Lady would associate herself with the comments made by the Scottish leader of the Liberal Democrats that Scotland is an ancient nation, and it should and would never exist again.
Christine Jardine
I thank the hon. Lady for her petty and irrelevant—[Interruption.] She is taking a comment out of context, when we are speaking about the lives and livelihoods of people in this country who cannot afford to feed their children; so we have to have a petty debate about a comment made in February, which was been taken out of context. I thought that her contributions were normally better than that.
Let me return to the issue at hand and the problems facing our constituents.
Christine Jardine
Yes, the hon. Lady has made me quite angry, because this is far more important than that.
Surely the cost of living for so many people in Scotland, our constituents, could be alleviated if we did not now pay more tax than anywhere else in the UK. The situation is so bad that the Scottish newspapers today are reporting that the SNP-Green Government are concerned that the ever-increasing taxation burden may now encourage people to move elsewhere. Is that not dreadful?
Dave Doogan
When the hon. Lady speaks about the financial pressures and burdens on families and communities, she hits the nail on the head. How important for her constituents is not having to worry about the cost of a prescription, rather than finding £9.65; being certain that their children will get to university if they make their grades, without having fears about funding; or having any other benefit that they enjoy in Scotland but not in England? How grateful are her constituents?
Christine Jardine
When my constituents come to me, what they complain about is not that they might have to pay that amount for prescriptions were it not for the Scottish Government; they complain about the burden they face every day at the moment. Businesses complain to me about the Scottish Government. Constituents regularly complain to me that they do not understand why the Scottish Government are not doing something about the state of our NHS and not doing something to provide a better education for their children to give them a better chance in life. That is what my constituents complain about.
As for Brexit, I agree with the SNP that it is doing immense damage to our economy, making life incredibly difficult for business and increasing the burden on families. What surprises me is that the SNP fails to recognise that to take Scotland out of the UK would be to repeat and amplify that damage to Scotland’s economy, income and households. Why does the SNP want to inflict the same damage again? Of course independence is its solution to everything—
Christine Jardine
Not at the moment, thank you.
When the hon. Member for Paisley and Renfrewshire South (Mhairi Black) was talking about bad Governments making bad decisions, I had to bow to her expertise as a member of the SNP, because when it comes to bad Governments making bad decisions, it is in a class of its own. One has only to look at the mounting bill for the ferries, at the burden of business rates, which I have mentioned, at the state of our NHS, and at the state of our education.
Dr Whitford
The hon. Lady keeps referring to the NHS and education. Public funding is required to support those. It is common in this place to talk about failing on health and on education. All four health services are struggling after the pandemic, but A&E waiting times and cancer waiting times in Scotland are still significantly better than in the other three health services. Closing the attainment gap helps young people have a better future, and both at highers and in positive destinations, that gap has closed by two thirds while the SNP has been in power. As for this nonsense that somehow she expects public services to be better but with less taxation, she needs the same reality check as those on the Government Benches.
Christine Jardine
I thank the hon. Lady for her intervention because, like the rest of SNP, she talks a good game but often forgets that those of us on these Benches live and have constituency surgeries in Scotland, and we know the reality of the queues of people every week complaining about the public services in Scotland. I know that the SNP blames Westminster for that, but SNP Members always overlook the fact that the Scottish Government have had record amounts of money. I do not for one moment believe that the UK’s economic stewardship at the moment is the best it could be—it falls far short, as I have mentioned—but it is rich of the SNP not to recognise the mistakes it has made.
I do not believe anyone in this House, in any party, is not concerned about the cost of living crisis, inflation or the energy prices we all face. Where we differ is in our solutions. The hon. Member for Paisley and Renfrewshire South offered us the “I” word, which I am not surprised came up in this debate. I suspected that might have been what it was about all along. I offer three alternative “I” words: incompetence, inability and ineffectiveness. The voters will take all of them into account the next time they go to the ballot box in a general election. They will apply those words to both Governments and their stewardship of our economic wellbeing. At that point, we will see change, because the people of Scotland have had enough and they want a Government—two Governments—who are competent, able and effective.
Marion Fellows (Motherwell and Wishaw) (SNP)
The cost of living crisis affects disabled people far more than it does the general population. I make no bones about repeating parts of the speech that I made this morning in Westminster Hall, because I think that they bear repetition. I have had numerous briefings from a variety of disability organisations telling me that this Government have continuously failed disabled people, their carers and their families; that they are tinkering around the edges of a cost of living crisis that is affecting millions of people across the UK; and that the impact of this crisis affects those with disabilities, their carers and their families even more seriously.
This morning, I opened my iPad and the first story that I read in the news was about a man stealing formula milk for his baby, because his wife and he could no longer continue to dilute the formula that they gave to their baby. I wish that this was an isolated incident but, as many here today will no doubt testify, this is not just a feckless couple who are doing it all wrong; this is real life in the UK today, and it is even worse for disabled households.
Scope’s recent “Disability Price Tag” report showed that in 2023, the cost of being disabled has risen to £975 per month for a disabled household. That figure includes disability benefits such as personal independence payment, which was designed to offset the additional costs associated with being disabled. It is a £300 per month increase on the 2016-17 figures, when the additional costs were £675. Scope has recently warned that the figure could increase to £1,122 per month if it is updated to accommodate the inflationary costs for the period 2022-23.
The bottom line is that this Government’s support for those with disabilities has been wholly inadequate throughout the cost of living crisis. Disability Rights UK has said that the cost of living payments that this Government have given “don’t touch the sides.”
Dr Whitford
The two welfare Acts in 2012 and 2016 really changed social security across the UK. Does my hon. Friend agree that one big failure was not to do cumulative impact assessments? What has been the impact on a disabled woman who is a lone parent with three children of being hit by changes to disability benefit, the two-child limit, the benefit cap and the benefit freeze?
Marion Fellows
My hon. Friend is absolutely right. The Government do not take into account real lived experiences and people with multiple differences, such as being a woman, being disabled and being a single parent. It just is not good enough.
Disabled people often face higher costs for their gas and electricity. Many disabled people say that they need more heating to stay warm—most of us here can recognise that—and others say that they have to use extra electricity to charge up items of assistive technology. My parliamentary assistant went to a drop-in session and came back to my office almost in tears, having spoken to a parent who requires three separate machines to keep their child alive overnight, but who could not afford to pay the associated electricity costs. Even with the cap that the Government have tried to put on electricity prices, the extra £150 does not help.
Disabled people have been suffering for years, and if we give someone a percentage of a very small amount, it is still a very small increase. According to the professional association for social work and social workers, 7 million people—almost half of those living in poverty in the UK—are either disabled or live with someone with a disability. The Trussell Trust says that half of those using food banks are disabled.
I know that the Government do make some effort—I congratulate the Minister for Disabled People, Health and Work, whom I spoke to this morning—but they do not get the bigger picture. When something like this cost of living crisis rears its ugly head, it drives the most vulnerable in our society into further debt and further difficulty. Something that I have not yet mentioned is that anyone with a food allergy or anyone who requires special food is in an even worse state during this cost of living crisis.
The SNP has consistently called on the Government to uplift universal credit—to increase it by £25 per week—and extend it to all means-tested legacy benefits. I refer to those people who went through the covid-19 pandemic and got no additional costs. That is just not right and we need to look at it. The Government need to do their job properly and actually help people.
The Scottish Government are trying to make things better. Our adult disability payment and the child payment, which has recently been doubled and will hopefully be increased even more, help families and disabled people much more than what is happening in the rest of the UK. However, as my hon. Friend the Member for Angus (Dave Doogan) has said, there is a cost to this, which is that folk like me pay more tax. I have yet to meet a constituent who tells me that they object to paying more tax to help folk less well off than themselves. It may just be that Motherwell and Wishaw is a beacon of light, but I do not think so. The Motherwell and Wishaw constituency is built on old mining communities—coal and steel communities—and the people there tend to know what it is like to be in poverty, but they also know that helping each other is the sign of a civilised society.
The health and disability White Paper raises the spectre of more disabled people facing sanctions. Can we really believe that, in the 21st century, we are going to sanction disabled people? They will have to move on to universal credit, and then not only will they not get what they are entitled to, but any increases will be barred under that punitive regime. This Government are also very bad at signposting. Let me cite as an example pension credit, the uptake of which has been disgraceful.
I am watching my time carefully, but I will briefly reflect on what the Prime Minister was doing today with the Farm to Fork summit at No. 10. That seems to me a lamentable effort to mitigate the disaster that has been Brexit for the economy and for the food supply chain. The Government were warned often during the Brexit debates, many of which I was able to attend.
It is not good enough. Scotland needs and wants to go back into the European Union. Many people in Scotland still believe that is the best way forward for this country and we want to follow the example of countries such as France that put blocks on prices to keep things cheaper for people during a cost of living crisis. This country is in a terrible state. Scotland is in a terrible state in terms of people suffering with the cost of living.
It is almost inconceivable that the Lib Dems and the Labour party are backing a hard Tory Brexit. They do not want to say how awful it has been for people right across the UK and what it has done for food prices—
Marion Fellows
I will leave it to the hon. Lady to correct me later, when she finds time.
Lastly, it is really important that this Government reflect on the fact that a society is judged on how it treats its most vulnerable people. On that measure, this Government are failing.
Hywel Williams (Arfon) (PC)
I will attempt to be brief, so that colleagues from the SNP can take part in the debate. Before I come to my own remarks, I want to note that this is a motion, albeit derived from the SNP, about the cost of the crisis, before the UK Parliament, and I think the empty Opposition Benches—with one honourable exception, the hon. Member for Leicester East (Claudia Webbe), who I am looking forward to listening to—will be noted in Wales and in England. Labour has no interest; it has only contempt.
The latest “Snapshot of Poverty in Wales” published by the Bevan Foundation found that more than one in eight Welsh households either sometimes, often or always do not have enough to afford the basics. The latest Rowntree Foundation figures show that 36% of children in my Arfon constituency live in poverty. That rate hardly varies across the constituencies in Wales, and even the generally better-off Vale of Glamorgan constituency has a child poverty rate of 28%.
We should be ashamed that people are being forced to make impossible choices between essentials, and that they have no option but to turn to charities and food banks for the very basics of existence. Food price inflation, much higher than the general rate, is behind much of the suffering we have seen over the past couple of years, and we know, as has already been said, it hits the poorest hardest. That is one reason why Plaid supports this motion, and in particular the call for an official investigation into “soaring supermarket prices” and suspected profiteering.
Can the Minister, in his winding-up speech, tell us what steps the UK Government are taking to ensure that, as wholesale prices fall, the savings are immediately passed on to customers? There is genuine concern that a failure to do so will mean that the current extortionate prices and, in some cases, immoral levels of profiteering will, I suspect, become entrenched in the economy.
Despite some Government help, energy bills remain sky high, in great contrast to other neighbouring countries, mainly in the European Union. Many Members will, like me, have received heartbreaking correspondence this last winter from people struggling with cold and damp houses because they could not afford to heat them. Given that energy bills are expected to increase by 17% this year alone and that households who have had to use up savings or take out debt in order to cope with high prices are now less financially resilient, I fear that this coming winter will be even more difficult.
However, there is time between now and next winter for the UK Government to put support measures in place. First, a fair tax on share buybacks, including the £3.18 billion-worth announced by Shell last month, could be used to increase support provided under the energy price guarantee; secondly, the energy bills support scheme could be redesigned to target financially vulnerable households; and, thirdly, another round of the alternative fuel payment could be guaranteed, set at a level that better reflects the increase in the cost of alternative fuels experienced by off-grid households—something that has been neglected in the past. I am concerned about the need for a fairer system of emergency help for poorer people, for families with children and for people with disabilities when the weather is particularly cold. Scotland has a better system, although it appears that this Parliament is not interested in it. Too many of my constituents in upland areas miss out by being on the wrong side of a notional weather line drawn up for bureaucratic convenience.
Looking beyond next winter, our system must be redesigned so that energy is affordable to all. One option would be to introduce a social tariff that provides a safety net for vulnerable customers. One group of people for whom such a safety net would be particularly important is people with disabilities. The high cost of specialist equipment, the higher usage of everyday essentials and energy, and the inadequate welfare system all make it harder for disabled households to meet the extra costs of their disability. Figures from Scope show that, on average over the 2022-23 period, and accounting for inflation, households with at least one disabled adult or child need an additional £1,122 a month to have the same standard of living as households without.
The UK Government reform outlined in the health and disability White Paper makes the situation worse by using the deeply flawed personal independence payment assessment process to determine eligibility for financial support for those who are not well enough to work. I call on the Government to rethink this matter, which is of particular concern in Wales, which has the highest level of poverty and proportion of disabled people of any UK nation.
Since Scotland gained certain powers over disability benefits, it has been able to chart a different course by committing to reducing onerous assessments for people with disabilities, removing the private sector from the decision-making process, and moving towards a person-centred approach that truly listens to the needs of people with disabilities. It is high time that Wales—and England for that matter—had the same powers as Scotland so that we can all begin to restore the dignity and respect that claimants with disabilities deserve.
Before I close, I will touch on support for small and medium businesses. They are at the heart of the Welsh economy, employing 62.6% of Welsh workers, so it is vital that they be supported through the crisis. Despite that, those businesses received in the Chancellor’s spring statement no additional support with their energy bills. Twenty-four per cent. of small businesses are trapped in fixed energy contracts that were agreed when prices were at their highest. The Federation of Small Businesses estimates that that issue affects up to 17,500 small businesses in Wales. Many are concerned that it will force them to downsize, restructure or even close, putting at risk the jobs and communities that they support. Will the Minister commit the UK Government to taking real action by requiring energy companies to provide opportunities for businesses to renegotiate their contracts to reflect current rates?
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Many of my constituents, like many across the country, are struggling—struggling to pay their energy bills, struggling to put food on the table, struggling to keep their head above the financial flood waters that threaten them and their families. Energy bills are up 300% or so in the last two years, food prices are up 17% in the latest Which? survey—the prices of the cheapest and most essential foods have soared the most—and mortgages are up by 61% in just the past year. That, of course, was caused by the disastrous seven-week reign of the previous Prime Minister and her Chancellor.
The excuse frequently trotted out by those on the Conservative Benches—we have heard it again today—to justify the inflationary attack on us all, which hits the lowest paid the hardest, is Ukraine. The problem with that argument is that it shows just how short-sighted and backward-thinking UK energy and economic policy has been for decades. I am no geopolitical expert, but it seems to me that pegging our electricity prices to the wholesale cost of gas, putting so many of our eggs in a basket controlled by Putin and murderous oligarchs, and relying on a region that has never been renowned for its stability was nonsense on stilts.
Instead of using past decades to invest in our energy sector, build a green industrial base and begin the process of decarbonising our grid—thereby reducing our dependence on the likes of Putin—the Labour Governments of the past put their weight behind the dash for gas, while the Tories paid lip service to the very idea of industrial strategy. It is their economic strategy, exemplified by the previous Prime Minister and those catastrophic seven weeks, that has caused mortgage rates to skyrocket and left our economy in the mire, wrecking any ability to recover from the kind of shocks to the system we have seen over recent years, whether from covid or from Putin’s warmongering. Most of all, it is their kamikaze Brexit unleashed on our society that has destroyed what was left of the UK’s capacity to invest in its own recovery and future.
In 2016, my constituency voted two to one to remain in the EU. My constituents knew and know that our economic prosperity and our wider society are inextricably linked to our European allies. From the airport, which delivers the largest cargo exports by value in Scotland, to the whisky bonds and warehouses that slake the thirst of millions of Europeans, through to the universities and colleges with links to their contemporaries on the continent, and the hauliers based in my constituency who experience at first hand every day the Kafkaesque world created by the current Government—they have all been hit hard by Brexit, and so have their staff. They and we have lost a huge amount since Brexit.
But then, so has the Labour party. Many of us can remember the savage criticism that the right hon. Member for Islington North (Jeremy Corbyn) received from those on his own Benches because he, in their view, was a secret Brexiteer. Now everyone in the new model Labour party is a Brexiteer, including the current branch office manager in Scotland, elected after the previous democratically elected leader was booted from office by the big boss here. It is no surprise that they are getting very excited about their small increase in the opinion polls in Scotland, because—let’s face it—what else do they really have to get excited about? Their boss down here has declared that he does not care if he sounds like a Conservative, while the shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), tells his radio listeners that the Labour party cannot be
“picking through all the Conservative legislation and repealing it”
if it ever got back into office.
The Leader of the Opposition promised the abolition of tuition fees for higher education—abandoned in England but maintained by a Scottish Government trying to ensure that education and learning is not the preserve of a wealthy elite. The Leader of the Opposition promised common ownership of the mail, energy and water—abandoned in England but maintained in Scotland, where it has jurisdiction, with water bills in Scotland being substantially lower and 35% more per capita invested in infrastructure. He also resigned from the Labour Front Bench after what he said was a “catastrophic” result in the Brexit referendum, but he is now happy for the UK to wallow in that catastrophe, while Scottish Government plan for a future within Europe and alongside our friends and allies.
Mr Deputy Speaker, the sad truth is that you could not put a fag paper between the two Front Benches in this place. They are both set on policies that will exacerbate and extend the cost of living crisis; both hellbent on ignoring reality and ploughing on with exclusion from the single market; and both sticking their head in the sand as to the damage that their ultra-free market economic policies are costing and will continue to cost ordinary households across these isles, regardless of who sits on the Treasury Bench.
Gavin Newlands
I wish the recently selected Labour candidate in Paisley and Renfrewshire North all the best in the next election, because she will need it, going round the doors with a Tory manifesto coloured in red and a leader who would sell his granny for a few hundred votes in a midlands marginal—and on that, I will give way.
Ian Murray
I thank the hon. Gentleman for giving way. Does he agree with his colleague, the hon. Member for Glasgow South (Stewart Malcolm McDonald), who said:
“‘Labour are just the same as the Tories’ is not a strategy, it’s the absence of a strategy”
and that telling people Labour and the Conservatives are the same “won’t get us far”?
Gavin Newlands
Who said it was a strategy? It is a fact. All I am doing is pointing out facts. If the hon. Gentleman wants me to read out all the examples of his leader going back on his word in terms of nationalising various industries, I am more than happy to do that, but I am not sure we have time for it. Everyone here and everyone in Scotland knows that his manifesto will be Tory lite at the next election. It might work in Edinburgh South, but it is not going to work in many places across the central belt of Scotland.
Dave Doogan
Does my hon. Friend see the delicious irony that the electoral fortunes of Scottish Labour are hinged entirely on the electoral ambitions of middle England?
Gavin Newlands
It is as if my hon. Friend has read my speech—I was sitting beside him, so maybe he did—because I am making the very same point; indeed, I just made the same point about the midlands marginal. The Labour leader is betting the entire future of the UK on winning a few votes in English marginals, and Scottish Labour had better wake up to the reality that that is not going to cut it when they are out campaigning at the doors in the next election.
At the same time, the Labour candidate in Paisley and Renfrewshire North will be campaigning against a Scottish Government who have rolled out 1,140 hours a year of free, high-quality childcare, delivered over a quarter of a million baby boxes to new parents, scrapped prescription charges, extended free bus travel to under-22s, maintained free eye tests and provided free school meals for pupils in primary 1 to 5—all measures that are putting money back in the pockets of people where it is needed most—and against an utter rejection of the fallacy that the state should be rolled back, a fantasy that has afflicted the UK for the past 13 years. For the Labour party to turn its back on reversing the lunacy of the previous 13 years is a complete abdication of responsibility—responsibility that should be focused on those who need the state’s help the most.
To give just one example, the First Steps Nutrition Trust’s report this month on the impact of the cost of living crisis on child diets found that the cost of infant formulas had increased by an average of 24%, while the cheapest formula went up by 45%. The average tin of formula now costs just over £14, while the Healthy Start grant in England, Wales and Northern Ireland was frozen this year, and less than two thirds of eligible families are successful in applying for a grant. At the same time, the Scottish Government have uprated our Best Start package by over 10% this year—that package has an 88% uptake rate—as well as rolled out and expanded the Scottish child payment, getting support to households who desperately need it. It is utterly shameful that we have babies in this country with parents who cannot afford to feed them even the basics. Infants are crying with hunger because the pittance that the UK Government have decided is enough to feed them does not cut it in the real world. The chances of those infants getting a healthy diet once they get older have also decreased, with fresh food inflation sitting at 17%—that is where shops have fruit and veg at all.
There will be Members on the Government Benches who have the gall to tell us that empty fridge shelves and rocketing prices of imported produce are nothing to do with Brexit. They are all someone else’s fault—the hauliers, the farmers, the shops, the workers, the parents, the children—anything to avoid responsibility for the catastrophic mess they have created. They wanted to take back control; instead, they have taken us back to the 1970s, with inflation through the roof, industrial action across the economy, living standards falling continually and food shortages in our shops.
Just this week, the zoomers and zealots who pushed the Brexit campaign in the first place are gathered for a festival of delusion up the road from this place. The influence that these cranks and charlatans have had on the body politic and the direction of these isles is surely the most revealing piece of evidence that the UK is a busted flush. They have succeeded in isolating us from our allies and continuing the harmful economic policies that their great leader Thatcher imposed in the past.
Those who promised that Brexit would mean taking back control should explain exactly what control they think they have taken back. Is it control over an energy market that is rigged against consumers and profits the middleman? Is it control over the tens of thousands of skilled workers who have fled this country in recent years to their former homes in EU countries, so disturbed and dispirited were they by the hostile environment and bureaucratic nonsense cooked up by Members on the Government Benches—now with the connivance of Labour Members, too—leaving our health service without skilled and dedicated staff when we need them most, and virtually every bus company in the country cancelling services because so many drivers have moved to Poland?
Is it control over an economy that even the Government’s own Office for Budget Responsibility says will end up 4% smaller than it would have been without Brexit—wealth and productivity that will never come back while the UK sits in unsplendid isolation? This is an economic crisis that is not going to go away. It is permanently embedded in the fundamental structure of how the UK operates and the way in which the UK governing class and both parties have turned their backs on the rest of Europe. What is equally shameful is that we have a Labour party that is fully signed up to that Brexit agenda—signed up to policies that will continue to take us down that failed road.
At least Scotland has a way out. At least Scotland has a Government who are taking action, despite the fiscal restrictions imposed by the UK, to tackle child poverty through the Scottish child payment and Best Start; to create a social security system that puts dignity and respect at its heart; and to invest in decarbonisation and a just transition to net zero. At least Scotland has a party that takes seriously its responsibility to its citizens to do better, and at least Scotland has a Government who want to rejoin the world and be part of the mainstream of Europe, rather than sit in self-imposed exile. At least Scotland has a Government who want us to fully harness the wealth and resources of our country, natural and human, as an independent sovereign nation. It is time that Members on both Front Benches got out of the way of that democratic mandate and allowed the people of Scotland the chance to escape a Union that is costing them more than ever.
Claudia Webbe (Leicester East) (Ind)
The cost of living crisis is not really a cost of living crisis; in reality, it is a cost of greed crisis. It is greedflation driven by a lack of political interest in protecting ordinary people. As with any crisis, it is the most vulnerable in our society who suffer most, and there are few more vulnerable and more unsupported in our society than those with a disability. Disabled people are no strangers to poverty and crisis. Under 13 years of Tory Government, they have faced constant cuts and conscious cruelty at every turn, sharpened by punitive and pointless assessment regimes, conditionality and sanctions. We live under a Government who responded to the UK’s mass crisis of debt and hunger by suggesting that people should work more hours or take a second job to help with their finances, but many disabled people face huge challenges to work a single job, let alone a second, and they are even harder hit by the soaring costs of energy, fuel and other essentials.
As the hon. Member for Motherwell and Wishaw (Marion Fellows) has highlighted, according to research by disability charity Scope, disabled households in the poorest fifth spend twice as much of their household budget on energy bills, are twice as likely to have a cold house and are three times more likely to be unable to afford food. The heat or eat scandal is a mark of disgrace on this country, not just because people cannot afford to do both, but because disabled people suffer the worst of it. It shames us as a nation.
Again and again, for well over a decade now, the heaviest burden is placed on the shoulders of those least able to pay, while the wealth of the rich piles up. In a constituency such as mine in Leicester East, where we suffer some of the worst health and lowest incomes in the country, the evils of our unequal system hit especially hard. In my constituency, far more children—37% compared with 26% nationally—live in a family with at least one disabled member than live with none, piling yet more hunger, ill health, stigma and misery on children in a country that is already failing them.
The median annual wage for workers in Leicester East is £19,960, compared with an average of £25,837 in the east midlands and £27,756 in the rest of the UK. The level of poverty in my constituency is stark. My community is hurting. The level of suffering is deep. I am witnessing that daily, and it is painful, yet the Conservatives continue to offer at best a sticking plaster for the grievous wounds they inflict on the poor and vulnerable. In 2017, the United Nations condemned the UK Government’s treatment of disabled people as a “human catastrophe”, and it has only grown worse since then. The abuse and abandonment of our disabled people is an international disgrace and a stain on the UK’s standing among nations. Until this cruelty towards disabled people and all our millions of poor and vulnerable citizens is reversed, the UK cannot consider itself a civilised nation. Every day’s delay in putting it right means more lives lost and ruined.
The Government need to tackle prices and address the inequality of extra costs that disabled people face. They need to work towards the redistribution of wealth and establish a welfare system that provides an adequate level of support for disabled people. We need radical transformational change.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The wind-ups will begin immediately after Mr Hendry sits down.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I thought you were going to give me an instruction to sit down there, Mr Deputy Speaker, but thank you for allowing me to speak in this cost of living debate.
The shadow Secretary of State, the hon. Member for Edinburgh South (Ian Murray) and I share an allegiance to a football team, and when we go to some stadiums, particularly for the big events, we often look across and see the empty seats, and go, “Did the opposition come dressed as seats?” I look behind him today, and wonder if the rest of his party have done the same. But no—they have not bothered to turn up because, as the hon. Member for Leicester East (Claudia Webbe) has just pointed out, this is an issue about whether people can afford to heat their homes or to eat. In fact, it is worse than that, because in Scotland during the winter we had people who could not afford to heat their homes or to eat. This is an important thing that we should have seen the Labour party turn out for, but of course we did not.
When it comes to Brexit, what about the harms? We have heard about quite a lot of the harms today in this Chamber. My colleagues have covered a number of them—from the economy and trade to the impact on our population, education, rights and devolution, as well as on the cost of living and the cost of food. As my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) pointed out, when food price inflation goes up, it disproportionately hurts the least advantaged in our society and the poorest. However, it is worse than that, because food price inflation on basic foods is actually higher than the headline rate. It goes up even more, and these are the basic staples that people rely on, yet Labour Members could not even bother to turn up to discuss that with us in this debate.
The Brexit that has been forced upon us is the gift that Scotland didnae want and that keeps on giving misery. It keeps on delivering misery across Scotland for people. I will just mention some of the things it affects. Of course, Labour Members now support Brexit. In fact, as we heard from the Labour leader, if that “sounds Conservative”, they just “don’t care” about it. Brexit has made sure that GDP is 4% lower across the UK. There has been an £800 per year increase, on average, in the cost of living. By the end of last year, according to the London School of Economics, Brexit had already cost nearly £6 billion across the UK in higher food bills, and some £100 billion in lost economic input. When it comes to business, the British Chambers of Commerce has said that more than half its members have faced difficulties because of Brexit. It quotes one of its members saying:
“Leaving the EU made us uncompetitive”.
That is the fairly standard comment that it gets from its members.
The cost in human capital has been tremendous for us. Before Brexit, 6% to 9% of care home staff used to be EU nationals, and now we are struggling to find spaces in care homes for people because we cannot get the staff. The UK Government are doing nothing—nothing—about getting that sorted out. They are doing nothing to solve the misery for people who need that kind of support. Of course, we have the unemployment rate at a record low in Scotland, at 3%, so where are we supposed to get the people? Brexit has starved us of the human capital we need.
We have heard the I-word, and I thought the hon. Member for Edinburgh West (Christine Jardine) was going to talk about Ireland—independent Ireland—which over the next two years will have a €27 billion surplus, but no, she did not want to do that. She did not want to talk about the success stories of those small independent countries with fewer resources than Scotland that have stayed in the European Union and grown as a benefit of that.
On energy, I want to reflect on an issue I raised with the Secretary of State for Energy Security and Net Zero about the higher energy tariffs we face in the highlands and islands of Scotland. I said that we needed to do something about that, and I offered to work with him to see what we could do. But no—the answer I got back is that geographic circumstances are the issue: the distances involved result in higher costs of distribution than in other places in Britain. Well, that is rich, because we export our renewable energy around the UK. The distances do not matter when that advantage is being taken, do they? It only matters that it costs us more in Scotland, and the Government are not willing to do anything about it.
Similarly, people are struggling in rural communities with the off gas grid regulations, because they pay a much higher premium for their energy than anywhere else and probably have to use more electricity at a higher rate than for mains gas, and of course face higher costs for liquid petroleum gas and for heating oil as well. The answer I got back on that from the UK Government was, no; their aim is to protect suppliers before people. It is not good enough for them to just wash their hands of a situation where people are struggling, particularly in rural communities, with exorbitant costs to heat their homes during the winter.
I am grateful for the mention earlier of my campaign on credit balances. People are struggling, but electricity companies hold on to their money, in credit, sometimes thousands of pounds—one pensioner in my constituency was nearly £2,000 in credit, yet the company was looking to increase her direct debit even though she had that money with them for safekeeping or use. That money should be returned to people—but, no, that is not going to be done either. What we get back is, “Customers can ask for that money back.” Some people are of course too frightened to look at their bills because of the costs they are facing, while others do not know about this or are intimidated, and some people are told by electricity companies that they cannot get that money back or they can get only a portion of it back. People have rights, and they should be fulfilled. They should be able to get their money automatically returned; it should not be kept on credit balances for companies to use for their own ends. That is exacerbating poverty for people.
I am grateful to the hon. Member for Edinburgh West for raising the issue of business rates. The small business bonus has been mentioned, and we have 100,000 businesses in Scotland that pay no rates whatsoever; if our aim is to help people in Scotland, including small businesses, we should realise that there are a lot of micro and small businesses across rural communities, and that directly assists them.
So too do the actions we take on child poverty. The child poverty rate across the UK is 27%: in Wales it is 34%; in England it is 29%; in Northern Ireland it is 24%; and in Scotland it is 21%. The Institute for Fiscal Studies says that among the poorest 30% of households, incomes are boosted by around £2,000 per year in Scotland compared to England and Wales.
There are transformational policies to help people: free bus travel for young people in every part of Scotland; the expansion of free high-quality childcare to 1,140 hours, available for three and four-year-olds, and to two-year-olds from lower-income households; the best start foods grant, which helps with the cost of buying healthy food for families with young children; and three best start grants, which could be pivotal in a child’s life—for low-income families, £600 for the first child and £300 on the birth of a later child. There is also the Scottish child payment, the baby box, the free childcare extension, free school meals, free bus passes and much more from the Scottish Government to help out.
Dr Whitford
Does my hon. Friend agree that the problem with 13 years of austerity is that austerity may make the Treasury balance sheet look good in the first year but it starves local economies because people have no money to spend, so we see boarded-up high streets, and in the end that reduces the tax take to Government, so it simply does not work?
Drew Hendry
My hon. Friend is exactly right that it starves communities, and, worse than that, it starves families—it starves children. It starves people of the opportunity we could give them, because we do not have the advantages that we should and would have if we had the powers to make the decisions we need to make.
Drew Hendry
No, I am about to conclude.
The supports that I have laid out are the kinds of policies that we put in place in Scotland to try to help and to mitigate measures such as the bedroom tax.
Drew Hendry
No, I am going to finish in just a second.
Those are the things that we try to do in Scotland to help to mitigate the harms from this place, but we could do so much more. We could do things very differently, but we need the powers of independence in order to do that.
Mr Deputy Speaker (Mr Nigel Evans)
We are moving on to the wind-ups. I anticipate Divisions in 20 minutes.
David Linden (Glasgow East) (SNP)
It is a pleasure to close the debate on behalf of the Scottish National party. I thank my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black), who opened the debate and laid bare the sheer scale of the cost of living crisis for people across these islands. It has been remarked on that there have been a number of contributions mainly from the SNP Benches, but I do want to single out the one Conservative party contribution, from the hon. Member for Moray (Douglas Ross). He started off by expressing almost a degree of frustration that the motion before the House touched on the big issues. He then spent the rest of his speech complaining about other issues that he wished he could debate, most of which were under the competence of the Scottish Parliament—of which, of course, he is a Member. It was none the less good of him to grace us with his presence.
We had a contribution from my hon. Friend the Member for Midlothian (Owen Thompson), who spoke eloquently about the challenge for businesses in Midlothian as a result of the cost of living crisis. He was followed by my hon. Friend the Member for Angus (Dave Doogan), who expertly rebutted many of the points made by the hon. Member for Moray about comparisons with education policy in England.
My hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) spoke about food and drink. The hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey) spoke about the impact of the ice arena energy costs in Kirkcaldy. My hon. Friend the Member for Glasgow North (Patrick Grady) was right to open his speech by painting a picture. At first, most of us thought that he was talking about Brexit, but actually it was a reminder of all the scare stories we were told in the run-up to the referendum in 2014. He was right to do so, because every single one of them has come to pass while Scotland remains a member of the United Kingdom.
The hon. Member for Edinburgh West (Christine Jardine) was her usual cheery self; a ray of sunshine every single day. What was noticeable was that, as a member of the party of the people’s vote, she almost avoided any mention of Brexit. The Liberal Democrats have gone from being the party of the people’s vote to the party of “Don’t mention Brexit.”
Christine Jardine
I respectfully point out that perhaps the hon. Member was not in the Chamber or did not hear when I talked about Brexit. My party is more than happy to point out the damage that Brexit is doing to the economy, as I did when I spoke. Perhaps he would like to go back and check the record.
David Linden
I was in the Chamber—I may have lapsed into a coma. The hon. Lady talks an awful lot about Brexit and the damage of Brexit. The reality is that the Liberal Democrats were advocating a people’s vote knowing that Brexit was a disaster. I ask her to reflect on her party’s hypocrisy on the idea that, when the facts change, people should have the opportunity to change their minds. What is sauce for the goose is sauce for the gander.
Patrick Grady
I think that I am right in saying that the Liberal Democrats proposed not only a people’s vote but said that, if they formed the Government of the United Kingdom after the last general election, they would reverse Brexit immediately. So they say that we can have a de facto referendum in the shape of a general election, because their policy was to undo Brexit if they had won the UK general election. Now, of course, they are happy to continue with Brexit.
David Linden
I would caution my hon. Friend not to take absolutely seriously any commitments made by the Liberal Democrats in the run-up to a general election. The Labour party has been taking a leaf out of Nick Clegg’s book when it comes to tuition fees in the run-up to a general election. Perhaps the hon. Member for Edinburgh West will have that on her next leaflet.
My hon. Friend the Member for Arfon (Hywel Williams) spoke about energy, and my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) spoke passionately about businesses in his constituency and the impact that Brexit is having on them.
My little heart was cheered when the hon. Member for Leicester East (Claudia Webbe) got to her feet to take part in the debate. It was only about five minutes into her speech that I realised that she is not a member of the Labour party any more, so we could not tick off her speech as a Labour contribution. The debate was finished off by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who spoke about a number of issues including fuel poverty in the highlands, which has been a massive issue.
David Linden
Probably not.
There is a common theme this afternoon, especially from colleagues on the SNP Benches, which is borne out by what we are all hearing on the doorsteps. In short, that theme, which comes up time and again, is that Scotland can no longer afford to be tied to an intransigent British Government who are ploughing on with Brexit at any cost. It is clearer than ever that we need independence, so that people in Scotland can stop paying the price for disastrous decisions made here in London by a Government Scotland did not vote for. Indeed, we have not voted for the Tories since 1955.
We should be clear that the cost of living crisis is not necessarily a new thing. Yes, it has got worse, but for many of those I represent in Glasgow’s east end, it has been a permanent fixture in their lives due to Westminster’s inability to truly tackle structural inequality. In short, the cost of living crisis is the culmination of 13 long, brutal, cold years of austerity policies, compounded by Brexit and last year’s kamikaze Budget, which crashed our economy and trashed the Tories’ record on economic credibility.
Let us look at the backdrop against which today’s debate takes place. In this, the sixth richest economy in the world, baby formula is now security tagged. It is now put behind tills to avert mothers stealing milk to feed their children. Now, if that is the image Ministers wish to project when it comes to global Britain, then it is certainly a look—I will give them that—but it would be remiss of me, when we focus on supermarkets and retailers and discuss the cost of living crisis, not to look at the issue mentioned in the motion before the House today. I ask Members to think very carefully about what is in the motion. It deals with price gouging, which was not referred to by either Front Bencher, and the need for tougher action on what has been dubbed “greedflation”.
We believe Ministers should follow the lead of other European countries to bring down the price of food and other necessities, a view supported by many of my constituents who are absolutely baffled as Westminster stands idly by while food prices continue to skyrocket. For example, France introduced a price block on staple products, with supermarkets pledging to keep the prices of certain food and hygiene products as low as possible. It is precisely for that reason that the British Government must intervene and put pressure on major retailers to pass on falling wholesale prices to consumers. More than that, it is vital that the Competition and Markets Authority utilises its full powers and imposes maximum fines where evidence of price gouging is found. Profiteering from selling basic necessities is unjust at any time, but at a time when numbers—record numbers—of people are turning to food banks and skipping meals, it is simply abhorrent.
The Bank of England recently found that falling costs at some companies were
“not automatically being passed through to consumer prices in an attempt to rebuild profit margins”.
Indeed, it was revealed just on Friday that the chief executive of Tesco received a £4.4 million pay packet last year. Ken Murphy was given a base salary of £1.37 million and received £2.73 million in an annual bonus, making around 197 times the amount of the average Tesco worker. That is the level of inequality we have baked into a system that is broken, and broken beyond repair. When I go to Tesco in Shettleston, the very many people I bump into there are shocked at the idea of a boss coining in £4.4 million, when many of them are trying to work out what they can remove from their basket so they have enough to get by.
Of course, stubbornly high inflation extends to so much more than food. Each week on the doorsteps, constituents tell me how they have resorted to rationing baths and showers simply to save on energy costs. That my constituents live in an energy-rich nation but experience eye-watering levels of fuel poverty is a damning indictment of just how ridiculous the situation has become and why change is desperately needed. But we know all that is exacerbated by Brexit, a Brexit Scotland rejected yet has had foisted upon us against our will. Indeed, it is the only nation of these islands to have been so royally screwed over as a result of the 2016 referendum.
We all know from bitter experience that the slogans on the sides of buses were nothing more than empty rhetoric. In 2016, the right hon. Member for North East Somerset (Mr Rees-Mogg) slammed the Resolution Foundation’s findings that food prices would increase as a result of Brexit as “ridiculous”, and claimed that the price of food would go down. What is more, last year he suggested that the rules that the British Government followed while part of the EU made life harder for small businesses and increased the costs of operating. That is an entirely false claim. The hard Brexit that Ministers pursued has made life harder for food exporting and importing businesses. Do not take my word for it. Nick Allen, chief executive of the British Meat Processors Association, told The Independent that the extra burden of new paperwork and fees will see some small specialist importers struggle to survive. We know the price of Brexit, and it is one that Scotland cannot afford to pay.
The OBR predicted in March that the UK’s GDP would fall 4% as a result of Brexit, with trade and exports reducing by 15%. Figures recently released by the ONS show that the UK economy contracted 0.3% in March, making it the worst performing economy of the G7, and the only G7 economy to experience negative economic growth. Last Thursday, the Bank of England raised interest rates to 4.5%, in the 12th consecutive rise. Many of our constituents coming off a fixed rate are watching hundreds of pounds being added to their mortgage bill as a Tory premium, simply for the pleasure of having an incompetent Westminster Government that Scotland did not vote for.
The Conservative party inflicting economic pain is hardly a surprise to my constituents—it is probably why we have not had a Conservative MP in the east end for over 110 years. But what of the Labour party, off to my right? I mean that in more respects than one. In the Labour party, we have nothing more than a pound-shop Tony Blair tribute act, devoid of ideas and lurching ever further to the right in a desperate scramble for the votes of Tory English market towns.
On the biggest issues of the day that have caused economic harm to these islands, the Labour party has nothing to say: on immigration policy, more of the same; on Brexit, more of the same; on social security, more of the same. I therefore say to the hon. Member for Edinburgh South (Ian Murray) that simply hoping that the Tories run out of steam and that the keys to No. 10 Downing Street land in the laps of Starmer and Streeting is no vision to enthuse electors.
In my constituency, voters are clear that they want Brexit binned. They want their MP showing solidarity with public sector workers striking for fair pay. They want a social security system that provides a safety net. And yes, unashamedly, they want an immigration system not driven by focus groups and dog-whistle politics but responsive to our small island nation and its economic needs. Those are the challenges that Scotland faces today.
By failing to support today’s motion on the biggest issue of the day, Labour and the Tories are simply showing Scotland that it stands at a fork in the road. The choice could not be clearer: Scotland can veer off to right with the full-fat Tories or the diet Tories and pursue yet more economic self-harm with Brexit and austerity, or it can veer left by voting yes to independence, to rejoining the European Union and to unhooking itself from the economic bin fire that is the United Kingdom. On that basis, I commend the motion to the House.
Mr Deputy Speaker (Mr Nigel Evans)
We had agreed on 10-minute winding-up speeches, but there seems to have been 40% inflation on that. I was not going to stop the hon. Gentleman because it is his debate, but I have to give equal time to the Minister.
The Minister for Employment (Guy Opperman)
As parliamentarians, we must be democrats first and foremost. We must accept the democratic decision of the British people in the EU referendum, and we must accept the decision of the Scottish people in the independence referendum; I wish the Scottish National party accepted that. As the Member of Parliament for Hexham, which goes to Carter Bar and the border, I was proud to campaign from Aberdeen to Annan, from the Borders to Edinburgh, to make the case for the Union. I believe we should continue to do so in this place.
It is unquestionably the case that the Government fully appreciate, and are assessing and assisting with, the pressures that households face across the United Kingdom. It is quite clear that these derive from the challenge of high inflation, the impact of covid and the impact of global issues, most particularly Putin’s invasion of Ukraine. That is why we continue to take extensive action to help households. In 2023-24, we have increased benefit rates and state pensions by 10.1% and we will spend around £276 billion through welfare support in Great Britain. We have never spent more in this country on low-income families, the disabled or pensioners.
In respect of the cost of living, the steps we have taken over the last year show that this is a Government that will always protect the most vulnerable. The total support package we have provided to help with rising bills is worth over £94 billion across 2022-23 and 2023-24—that is more than £3,300 per UK household on average. Included in that are the cost of living payments made to over 8 million low-income households, around 6 million disabled people and over 8 million pensioner households last year. There has been a 170% increase in applications for pension credit.
The Government paid out £37 billion in the summer of 2022 and billions in the autumn of 2022, and the Department for Work and Pensions has made cost of living payments worth £2.2 billion so far this year. This year, more than 8 million households will get additional payments of up to £900. Over 99% of eligible households on a DWP means-tested benefit have now received their first cost of living payment during 2023-24 of £301. Over 6 million people across the UK on eligible disability benefits will receive a further £150 disability cost of living payment this summer to help with additional costs. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. We have also provided ongoing support with the cost of living through the energy price guarantee, which continues for the summer.
We believe strongly that work is the best way out of poverty, and we have the opportunity through our jobcentres up and down the country to assist people and provide support for them. Whether that is youth hubs for young people, the 50Plus offer, the in-work progression or the massive increase in disability employment, we are progressing and supporting those people who are in work to get better jobs and a better opportunity for the way ahead. That is why we are extending the support our jobcentres offer to low-paid workers so that they can increase their hours and move into better paid, higher-quality jobs.
For those on universal credit, we are increasing the childcare cap to £951 for one child and £1,630 for two or more children. We are paying childcare costs up front when parents move into paid work or increase their hours. We are further supporting working people with the largest ever increase to the national living wage—an increase of 9.7% to £10.42 an hour from this April. That represents an increase of over £1,600 to the annual earnings of a full-time worker.
There has been much criticism of the UK economy, but we have to bear it in mind that the UK has the fourth highest employment rate in the G7—higher than the US, France and Italy. Our unemployment rate remains low at 3.9%. We have more people in payroll employment than before the pandemic, at 30 million. A substantial package of labour market interventions, part of which I have outlined, was announced at the spring Budget. That was a huge boost to our efforts. We see youth unemployment—
Guy Opperman
As the hon. Gentleman’s colleague said, probably not.
Our record on youth employment is the second best in the G7, our economic inactivity is back at 2018 levels and the number of vacancies has dropped for 10 quarters in a row. We heard much from the SNP during the debate, but there was no talk whatsoever about luxury camper vans worth £100,000, missing auditors or ferries to the Western Isles that do not exist. Presumably those ferries have both the auditors and the camper vans on them. There was no talk of the comment from the Children and Young People’s Commissioner for Scotland that the SNP Government had failed their people; no talk of the 16 years of failure on police, education and health; and no talk of their total abandonment of the oil and gas sector.
We are discussing the cost of living, but the SNP would rather import oil and gas from overseas than support more than 100,000 jobs in the north-east of Scotland and support the businesses that we have there. The truth is that it is in partnership with the Greens, who are closely related to Extinction Rebellion and have stated explicitly that they are anti-economic growth. Why would we import oil and gas when we can address the cost of living with something that is home-grown and supports more than 100,000 in the north-east of Scotland? That is what this Government are doing and what my hon. Friend the Member for Moray (Douglas Ross) is doing, and we should support him wholeheartedly.
We have just passed the 400th anniversary of the publication of Shakespeare’s “Macbeth”—a tale, interestingly, of a husband and wife in Scotland whose misdemeanours finally catch up with them. I am absolutely sure that that has no relevance whatsoever to the present day. I am absolutely sure that the discussion of independence is always
“Tomorrow, and tomorrow, and tomorrow”.
I am absolutely sure that no one in the Chamber today is
“full of sound and fury,
Signifying nothing.”
However, I am absolutely certain that this Government are assisting on an ongoing basis, and I strongly commend the Prime Minister’s amendment to the House.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Public Order Act 2023
(11 months, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
19:02 - The House divided: - Ayes: 57 / Noes: 278 - Question accordingly negatived.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The Front Bench there is reserved for His Majesty’s official Opposition. I would be delighted to suspend the House for 10 minutes so I could go and have a cup of tea, but I am sure hon. Members will take their usual positions in order that we can start the second Opposition day motion on behalf of the SNP.
4.52 pm
Alison Thewliss (Glasgow Central) (SNP)
I beg to move,
That this House believes that the Public Order Act constitutes a serious infringement on the rights of the people to protest; and makes provision as set out in this Order:
(1) On Tuesday 23 May 2023:
(a) Standing Order No. 14(1) (which provides that government business shall have precedence at every sitting save as provided in that Order) shall not apply;
(b) any proceedings governed by this Order may be proceeded with until any hour, though opposed, and shall not be interrupted;
(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private);
(d) at 12.30 pm, the Speaker shall interrupt any business prior to the business governed by this Order and call the Leader of the Scottish National Party Westminster Group or another Member on his behalf to present a Bill concerning the repeal of the Public Order Act 2023 of which notice of presentation has been given and immediately thereafter (notwithstanding the practice of the House) call a Member to move the motion that the Bill be now read a second time as if it were an order of the House;
(e) in respect of that Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time;
(f) any proceedings interrupted or superseded by this Order may be resumed or (as the case may be) entered upon and proceeded with after the moment of interruption.
(2) The provisions of paragraphs (3) to (18) of this Order shall apply to and in connection with the proceedings on the Bill in the present Session of Parliament.
Timetable for the Bill on Tuesday 23 May 2023
(3) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be taken at the sitting on Tuesday 23 May 2023 in accordance with this Order.
(b) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) at 4.00 pm.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be brought to a conclusion (so far as not previously concluded) at 7.00 pm.
Timing of proceedings and Questions to be put on Tuesday 23 May 2023
(4) When the Bill has been read a second time:
(a) it shall, notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme Order), stand committed to a Committee of the whole House without any Question being put;
(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(5) (a) On the conclusion of proceedings in Committee of the whole House, the Chairman shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(6) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (3), the Chairman or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply—
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new clause or new schedule selected by the Chairman or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a designated Member;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other Questions, other than the Question on any motion described in paragraph (15) of this Order.
(7) On a Motion made for a new Clause or a new Schedule, the Chairman or Speaker shall
put only the Question that the Clause or Schedule be added to the Bill.
Consideration of Lords Amendments and Messages on a subsequent day
(8) If on any future sitting day any message on the Bill (other than a message that the House of Lords agrees with the Bill without amendment or agrees with any message from this House) is expected from the House of Lords, this House shall not adjourn until that message has been received and any proceedings under paragraph (9) have been concluded.
(9) On any day on which such a message is received, if a designated Member indicates to the Speaker an intention to proceed to consider that message—
(a) notwithstanding Standing Order No. 14(1) any Lords Amendments to the Bill or any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly;
(b) proceedings on consideration of Lords Amendments or on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under subparagraph (a) shall thereupon be resumed;
(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private) in the course of those proceedings.
(10) Paragraphs (2) to (7) of Standing Order No. 83F (Programme Orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings on consideration of Lords Amendments to a conclusion as if:
(a) any reference to a Minister of the Crown were a reference to a designated Member;
(b) after paragraph (4)(a) there is inserted—
“(aa) the question on any amendment or motion selected by the Speaker for separate decision;”.
(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme Orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings on consideration of a Lords Message to a conclusion as if any reference to a Minister of the Crown were a reference to a designated Member.
Reasons Committee
(12) (a) Paragraphs (2) to (6) of Standing Order No. 83H (Programme Orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order as if any reference to a Minister of the Crown were a reference to a designated Member.
(b) The composition of the committee shall (notwithstanding the practice of the House) have three members from the government, three members from the largest opposition party and one member from the second largest opposition party.
Miscellaneous
(13) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings on the Bill to which this Order applies.
(14) (a) No Motion shall be made, except by a designated Member, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(15) (a) No dilatory Motion shall be made in relation to proceedings on the Bill to which this Order applies except by a designated Member.
(b) The Question on any such Motion shall be put forthwith.
(16) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(17) No private business may be considered at any sitting to which the provisions of this Order apply.
(18) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which proceedings to which this Order applies are to take place shall be postponed until the conclusion of any proceedings to which this Order applies.
(b) Standing Order 15(1) (Exempted business) shall apply in respect of any such debate.
(19) In this Order, “a designated Member” means—
(a) the Leader of the Scottish National Party in this House; and
(b) any other Member acting on behalf of the Leader of the Scottish National Party in this House.
Honestly, I think it would have been quite sensible for the SNP to fulfil the Opposition role in this place, Mr Deputy Speaker, because it would appear that His Majesty’s Opposition are not bothering to turn up this afternoon for this desperately important debate.
The Public Order Act 2023 is a massive overstep in power. As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) has said, it is
“a draconian and utterly unjustified attack on protest rights.”—[Official Report, 7 March 2023; Vol. 729, c. 209.]
The right to freedom of peaceful assembly and association are fundamental human rights. The Public Order Act, both in the letter and in the application, which we saw during the coronation, not only undermines that right—it totally and completely shreds it.
Wendy Chamberlain (North East Fife) (LD)
I am interested that the SNP has chosen to utilise its Opposition day debate to discuss an Act with limited applicability in Scotland. I accept that Scots travelling to other parts of the UK would be subject to the Act, and police officers in mutual aid activities, but can the SNP Front-Bench spokesperson explain why the Scottish Government approved some of the Bill via legislative consent, although to a very limited extent? I would like to understand why the Scottish Government agreed to do that, given what is clearly very strong opposition to it in this place.
Alison Thewliss
The hon. Lady makes the most important point: although the Bill’s territorial extent is England and Wales, anybody who comes to this city to protest—it could be any of our constituents, or any of us—falls under the remit of the Act. It does not discriminate by where someone is from. An Australian could end up getting arrested by accident. Any person who happens to be in the city and in the wrong place at the wrong time, or in the right place at the right time—exercising their right to protest—could end up in a jail cell because of the Act.
Peter Grant (Glenrothes) (SNP)
Is not the most important point that a lot of the things that our constituents in Scotland want to protest about are bad decisions taken in this place by the Government here? Quite rightly, they want to come to this Parliament to protest against the actions of this Parliament. To do so now, they have to put themselves at risk of being arrested simply for being in the wrong place at the wrong time.
Alison Thewliss
I absolutely agree. That is the dangerous nature of the Act.
Freedom of assembly in the UK now exists on the Government’s terms—when the Conservative party deigns to give that right. That right is now so conditional as to be meaningless. In my life, I have—like many of my colleagues—joined many protests, including the Make Poverty History march through the streets of Edinburgh, and protests and marches against the Iraq war. As a member of Scottish CND, I have protested outside Faslane. For migrant rights, I have protested on Brand Street and Kenmure Street. I protested against Labour’s school and nursery closures some years ago in Glasgow, for self-determination in Kashmir, and in support of Pride.
Alison Thewliss
I would like to know what protests the Minister has joined in his time. That would be very informative for the House.
Chris Philp
I often protested against the outrageous actions of the former Labour council in Croydon, which my constituency neighbour, the hon. Member for Croydon Central (Sarah Jones), knows all about. The hon. Member for Glasgow Central (Alison Thewliss) says that the right to protest has been all but extinguished, but the facts manifestly contradict that. During the coronation, which she is no doubt about to refer to, hundreds of people protested peacefully and lawfully. Moreover, on a daily basis—including certainly yesterday, and possibly today—Just Stop Oil protests lawfully in London. So her claim that protest has been all but outlawed is completely untrue.
Alison Thewliss
The legislation is having a chilling effect on people’s ability to protest. The Minister knows that that is the case because that is the very purpose of the legislation.
I will go on. I have campaigned for the self-determination of Kashmir; I have supported the protest that is Pride; I supported the March of the Mummies along Whitehall; I have supported the Women Against State Pension Inequality campaigners, who have campaigned outside this building against the atrocious loss of their pension rights; I have joined trade union demos; I have joined protests in support of those excluded from the Government support scheme; I have campaigned alongside people protesting about the Government’s intransigence on contaminated blood; I have protested on the side of the paragraph 322(5) highly skilled migrants the Home Office sought to remove for no good reason; and I have joined regular demonstrations in my constituency in Glasgow, including in George Square, on the Buchanan Street steps and on Glasgow Green. Like everybody on the SNP Benches, and the many thousands of SNP members and independent supporters over generations, I have protested the radical and necessary aim of Scottish independence and breaking up this failing British state.
Alison Thewliss
If the hon. Gentleman wants to tell me which protests he has joined, I would be glad to take his intervention, too.
Dr Evans
I am more interested in asking whether the hon. Lady has ever considered supergluing herself to any particular item during her extensive campaigning and protesting. If so, does she believe that that is right thing to do, and if not, should not the legislation be in place?
Alison Thewliss
People should have the right to protest in the way they see fit. This Government are running scared of protesters, who have had to take radical steps because the Government are not listening to their legitimate concerns.
Alison Thewliss
I will make some progress.
When it came to the protests and the rest of the coronation, I was appalled and outraged, but not surprised. It is no coincidence that the Act got Royal Assent four days before the coronation—that is the state that we are in. When a self-declared royal super-fan can be arrested by accident, there is very little hope for anybody else. I am referring to Alice Chambers, who said that she tried desperately to tell the police that she was not with the group of Just Stop Oil protesters as she waited to watch the coronation on The Mall. She was repeatedly questioned over 13 hours, subject to physical searches, held in a cell and had her DNA, fingerprints and mugshot taken, before the Met finally realised that she was nothing but an innocent bystander. She said that it was not until two senior officers interviewed her at 7 pm, more than 10 hours after she was arrested, that they finally acknowledged they had made a mistake. As far as I am aware, she is yet to receive an apology.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The hon. Lady is making a powerful argument about the effect on innocent bystanders. The Public Order Act; the Police, Crime, Sentencing and Courts Act 2022; voter ID—the list of anti-democratic laws passed by the Conservatives grows longer and longer, and there will be many innocent bystanders affected. The Tories have not won a general election in Wales for well over 150 years, and these laws therefore have no mandate from the people of Wales. My party wants to create a fairer justice system that truly serves our people. I am sure she agrees that if justice were devolved to Wales, as is the case in Scotland, many of these authoritarian new laws would never be able to be applied by this Government in Wales.
Alison Thewliss
I absolutely agree with the point that the right hon. Lady is making on behalf of the people of Wales who are affected by this Act.
The point about innocent bystanders—
Alison Thewliss
I want to finish this point, if that is okay with the hon. Member.
Ms Chambers, an Australian national, says that she has lived in the UK for seven years and was told she would face no further action by the police, but she does not yet know exactly what impact this will have on her right to live in the UK, because her arrest on suspicion of a criminal offence will remain on her record on the police national computer, and she is required to make an application supported by evidence to have the record removed. I ask the Minister, what happens to people in these circumstances? This could affect many people under question who would have the right to remain in the UK. I know of people who have gone through a red light or committed some other minor offence and have not been not allowed to stay, so somebody arrested under this Act could well find that that has a negative impact on their ability to stay in the UK.
Sir Julian Lewis
I have a lot of time for the hon. Lady, and therefore I will share with her a guilty secret: 41 years ago, I was arrested for mounting a noisy counter-protest against a CND-sponsored demonstration against the Falklands taskforce that was on its way to the South Atlantic. The police recognised that they had gone a bit far. Nevertheless, when we did future rooftop counter-demonstrations, they would monitor the amount of noise we made and tell us, “You go above that noise, and we’ll confiscate your equipment and possibly arrest you. You keep within reasonable bounds, and you can carry on.” Does she accept that there are ways of protesting that do not involve disrupting everybody else but get the case across, and that is how it should be?
Alison Thewliss
I am glad to find that somebody on the Government Benches has protested against something before. It must be true that you get more conservative as you get older. The difficulty with the point that the right hon. Gentleman is making is that, with reference to the offence of locking on, the Act talks about “serious disruption” to “two or more individuals”. That is a very, very low bar to set for disruption. When it comes to noisy protest, people are trying to make a noise—they are trying to draw attention to their cause. Restricting that in any way makes that incredibly difficult.
Alison Thewliss
I would like to make some progress.
The point of protest is to attract attention to a cause, and the more difficult it is to attract attention to a cause, the more it undermines the very principle of that protest in the first place. One of my hon. Friends was talking earlier about somebody who was making a racket outside this building. That is not counted as a noisy protest, but it is quite disruptive. There are all kinds of things in life that we have to put up with and deal with. We have to be grown-ups and be able to deal with a noisy protest; that is quite fair.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My hon. Friend is making a wonderful speech showing the problems with the legislation. Does she share my concern that this Act is yet another attack on trade unions and the right to strike, because in their demonstrations about industrial unrest, they often make a bit of noise and gather together in large numbers? This is also yet another insidious attack on freedom of labour.
Alison Thewliss
I absolutely agree with my hon. Friend. The people who were on PCS demonstrations in my constituency a few weeks ago were certainly making their voices loud and clear, and it is important that they do so. They were also having people honking their horns when they were going past—I do not know whether that falls within the ambit of the Act, but they were certainly getting support for their point.
Alison Thewliss
I will come to the hon. Gentleman, but I have a train of thought going on.
Alison Thewliss
I would like to just finish the point I am making to the Minister, and then I will let the hon. Gentleman come in on this point. I have laid out my past history of protest for a very good reason: I have previous on this. I have not been arrested at any of those demonstrations, but I am sure that my name is in a file somewhere—perhaps the Security Minister might tell me—for having protested outside Faslane, for example.
Alison Thewliss
Perhaps it is now—who knows? My name may be on a file. The police may say, “This person has form for having protested before. She could be a risk; she could present a threat.” I am an SNP Member with the stated aim of wishing to break up the British state; some may consider that a threat. I am wearing a necklace today that says “Not my King”; had I been walking down The Mall at the coronation, perhaps that would have been cause for me to be arrested. Would the Minister consider that to be a threat? I have a belt on this dress; is that considered a locking-on device now? Can I tie myself with a very firm knot to a lamp post—would the Minister consider that a threat under the Act? If he would like to intervene on me now about all of those things I would be very interested to hear whether he would consider me a threat liable to be arrested under the Act.
Chris Philp
I am grateful to the hon. Lady for listing all of the items about her person, but if she looks at section 2 of the Act, she will see that subsection (1) requires there to be an intention. In order for her to have committed an offence, there would have to be an intention for her to lock on, and while I am sure she could use her belt in any number of inventive ways, I doubt that there would be an intention to lock on.
In relation to the point about industrial disputes and trade unions made in an intervention by one of the hon. Lady’s colleagues, I remind the House—as I did during the passage of the Act just a few weeks ago—that industrial disputes and trade union actions, strikes and so on are expressly excluded from the provisions of the Act.
Alison Thewliss
I am very interested in what the Minister said about intention, because the Republic protesters who found themselves getting arrested had no intention—in fact, they had been negotiating in advance with the police on this issue. It was suggested that the string that they had to tie up their placards with was a locking-on device, despite the organisation having no history of using locking-on devices as part of their protest. If those people, who had no intention and no history of doing such things, ended up getting lifted by the police, I suggest that the Act has no reassurance to offer to anybody in any circumstance where they might be considered a risk.
James Daly
I like the hon. Lady very much—we sit on the same Select Committee—but I am unsure of the point that she is making. When we talk about peaceful protest, we are talking about non-violent protest. If she can point to any wording in the Public Order Act that restricts the right to non-violent protest, I would welcome that, but I can tell her the answer: there is nothing. This debate is not about whether there are restrictions on peaceful protest, but about whether we agree on the specific restrictions that are in the Public Order Act, and also in other pieces of legislation. There are different pieces of legislation that address different types of behaviour—that is what criminal statute is about.
Alison Thewliss
As the hon. Gentleman knows, we will be taking evidence on this issue in the Home Affairs Committee tomorrow from people who were arrested under this very legislation, who had no intention of being violent or anything of that kind. It will be interesting to hear from them what they say about the operation of the Act in practice.
Joanna Cherry (Edinburgh South West) (SNP)
One of the witnesses who will be giving evidence to the Home Affairs Committee tomorrow is Adam Wagner, a respected barrister. He said that the difference between the old law and this Act is that previously the touchstone for interference with the right to protest was when disruptive protest spilled over into a threat to public order and violence. Now, disruption is in and of itself defined in the criminal law as a threat to public order. That is an independent barrister giving an answer to the question asked by the hon. Member for Bury North (James Daly), is it not?
Alison Thewliss
It certainly is. When we look at how the Act has operated in its first outing, we know that although it is working as the Government intend, it is not working as some people claim it is.
Angus Brendan MacNeil
The hon. Member for Bury North (James Daly) and the Minister at the Dispatch Box mentioned intentions, which would be fine if intentions could not be misread, deliberately or otherwise. The fact that they can leaves a serious weakness in the Act.
Alison Thewliss
My hon. Friend is absolutely right. When we talk about intentions, we are almost in the dystopian area of pre-crime, guessing what people’s intentions might be. With strings around placards or a cyclist walking along with a bicycle chain, it is difficult to establish those intentions. It is clear from the coronation weekend’s activities that the measure is insufficient. The Bill should never have been brought to Parliament in the first place, given that it was just a repackaging of the measures that were already rejected during the passage of the Police, Crime, Sentencing and Courts Act 2022. Rather than accepting the democratic will of Parliament, the Government reintroduced the provisions later in the Public Order Bill, now the Public Order Act 2023. It is clear to me that the Government are seeking to crack down on protesters and protest without looking at the very reasons for that protest. It is very much a knee-jerk reaction.
I come now to the position of His Majesty’s official Opposition, such as it is. The Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), instead of saying that this Act should be repealed, said that we need to let it “bed in”. The shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy) has said:
“We can’t come into office, picking through all the Conservative legislation and repealing it…It would take up so much parliamentary time.”
I am giving the official Opposition the opportunity today: here is some parliamentary time, and here is the opportunity to repeal the Act. Why will they not come forward and support us in the Lobby tonight?
The shadow public health Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), told Sky News that the Opposition would
“look very carefully at this legislation”,
and the police would appear to have been “heavy-handed” in their approach during the coronation, but he refused to go as far as to commit to scrapping the Act. The Opposition are not opposing the restrictions on the right to protest, and their dithering is enabling it. They have said they are a Government in waiting, but today, on this piece of legislation, as with so many others, they are simply looking like gormless Tory sidekicks.
The Public Order Act 2023 was a petulant, vindictive, knee-jerk reaction from a UK Tory Government who are hellbent on undermining human rights and ignoring international legal obligations. It is a pattern of behaviour, and Scotland wants no part of it. The failure of Labour to stand up against this erosion of human rights and to commit to scrapping the Bill, along with the anti-trade union laws and the Illegal Migration Bill, will gain them no votes in Scotland. It will only reinforce the urgency of independence and of getting rid of this toxic Westminster Government and its successors once and for all.
The Minister for Crime, Policing and Fire (Chris Philp)
It is a pleasure to appear here, speaking in this Opposition day debate. To start, I must say that I am a little mystified that the nationalists are bringing this motion before the House, given that, as has been suggested already, the vast majority of the Public Order Act 2023 does not even apply in Scotland. There is one tiny smidgen of the Act that does have effect in Scotland. It is concerned with applying historic provisions of the old Public Order Act 1986 on transport and military property in Scotland. I have in my hand a letter dated 2 November last year from someone called Keith Brown, who at the time was the Cabinet Secretary for Justice and Veterans. It says that he is happy to provide and support a legislative consent motion in relation to that very narrow matter that applies in Scotland.
Amy Callaghan (East Dunbartonshire) (SNP)
I would love to know how the Minister defines a smidgen.
Chris Philp
In this context—I can read out the letter—the smidgen is applying historic matters under part 2 of the Public Order Act 1986 concerning processions and assemblies. They provide powers to the British Transport Police and Ministry of Defence police in Scotland on transport and defence land that are already exercisable by Police Scotland. That is the smidgen, and it is a smidgen to which Keith Brown readily and happily gave his consent in the letter dated 2 November that I have in my sticky paw.
Patricia Gibson
The Minister is making much of the fact that this legislation does not apply in Scotland, but he knows fine well—this point has already been made clear today by my hon. Friend the Member for Glasgow Central (Alison Thewliss)—that the Act affects people of Scotland who come here to protest against the great power that Westminster has over their lives in important areas.
Chris Philp
People who come to London from France might be affected by these laws. Is she suggesting that Members of the French National Assembly should be voting? People might come from the United States of America and be subject to these laws. Should the United States Senate and House of Representatives be expressing a view on these matters?
Chris Philp
I could go on, but I would much rather give way to the hon. Gentleman making what I am sure will be an insightful and interesting point.
Angus Brendan MacNeil
Given that the right hon. Gentleman does not want the French, the Americans or anybody else to come and vote at Westminster, we have a simple solution that will end the Scots coming to vote at Westminster, thank you very much.
Chris Philp
Well, then the hon. Member will have no say at all. Of course, in a referendum held in September 2014 the people of Scotland spoke very clearly and said they wanted to remain in the United Kingdom. I respect their wishes, and it is a shame that he does not.
Let me turn to the provisions of this Bill and the reasons why it was passed by both Houses of Parliament just a few weeks ago. The law-abiding majority are clear: they are sick of transport networks grinding to a halt and busy areas being shut down by deliberately disruptive protesters; they are sick of artworks being damaged; and they are sick of being unable to get their children to school, unable to get to hospital to have medical treatment, unable to get to work to earn a living, or unable to see their loved ones because of deliberately disruptive protests.
Dr Luke Evans
The Minister is very clearly making the point about why the majority of the public supported the Bill. Is this not the reason why Labour Members are not opposing the Act? Even they have realised that the majority of the public do not want their day-to-day lives ruined by a few who choose to sit in roads or glue themselves on to various objects, which just is not fair to people who want to get on with their lives.
Chris Philp
My hon. Friend makes two very good points, both of which pre-empt what I was going to say, but let me come to the official Opposition. They obviously voted against the Bill on Third Reading and at various other stages during its passage, yet the Leader of the Opposition, just a week or two ago, said that he now did not favour its immediate repeal and wanted to see how it beds in. I do not know how the Opposition will vote today. It is of course entirely possible that there will be another U-turn, although I must say that two U-turns in three weeks is quite a lot even by the standards of the Leader of the Opposition, so we will have to see what they actually do.
On the wider point my hon. Friend makes, I completely agree. We on the Government side of the House of course accept that peaceful protest is a fundamental human right. We of course accept the article 10 and article 11 rights, and this Act is compliant with those obligations. However, when it comes to people who are not simply protesting, but deliberately and intentionally setting out to disrupt the lives of their fellow citizens in a way that is deliberate and planned—for example by gluing themselves to a road surface, dangling themselves from a gantry over the M25 or walking slowly down a busy road—they are not protesting, but deliberately disrupting the lives of their fellow citizens. We say that that is not fair and is not reasonable. We say that that goes too far, and I believe the British people agree with us. It sounds as though the Opposition may do so as well these days, but that seems to change from one week to the next.
Liz Saville Roberts
Somebody has got to say it: how does the Minister respond to the fact that I as a woman am here as an MP in the House of Commons only because of people having undertaken very disruptive protests?
Chris Philp
Of course, the suffragettes, at the time they were protesting, did not have the vote and were not represented in Parliament. These days, we have a universal franchise, and everybody over the age of 18 who is a citizen is entitled to vote and stand for Parliament in a way that the suffragettes could not. That is the fundamental difference between the suffragettes and adults in this country today. People who are deliberately disrupting the lives of citizens are seeking to achieve by disruption and direct action what they cannot achieve by argument and democratic election, and that is wrong.
Sir John Hayes (South Holland and The Deepings) (Con)
I am immensely grateful to the Minister for giving way. Is it not true that every contemporary polity —I am speaking now of democratic countries—has some constraints on protest? A protest is limited where that protest becomes so violent, so extreme and so disruptive that it damages the lives of law-abiding people. The countries on the continent that SNP Members seem to revere in so many other ways certainly have those constraints, so the Government are doing nothing unusual, extreme or unreasonable—far from it.
Chris Philp
My right hon. Friend is, as usual, absolutely right. The concept that the right to protest does not extend to disrupting other people is one that other countries accept, and indeed article 11.2 of the ECHR, a text Opposition Members hold in very high regard, expressly concedes on the rights to protest that
“the exercise of these rights”
cannot exceed levels that are
“prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime”.
So the ECHR itself recognises that the law may impose constraints and restrictions on the right to freedom of assembly and association, or indeed the article 10 right to freedom of expression, in order for the prevention of crime,
“for the protection of health or morals”
and so on and so forth. It is recognised that these are limited rights in the way my right hon. Friend has eloquently described.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I want to check that I heard the Minister correctly a few minutes ago when he talked about people walking slowly down streets being covered by this Act. This building is filled with long and narrow corridors, so if I am stuck behind somebody should I phone the police?
Chris Philp
There are statutory definitions of what serious disruption constitutes. Slow walking is actually covered by section 12 of Public Order Act 1986 and is nothing to do with the Public Order Act 2023. In answer to the question, unless serious disruption is being caused, no, that would not be a matter for the police.
James Daly
Does my right hon. Friend agree that this comes down to a very straightforward choice: those who believe people should be able to glue themselves to the middle of the M25, potentially causing fatalities, stopping people getting to hospital appointments or taking their exams and causing the utmost disruption to their lives, support the SNP position, while those who stand up for people being allowed to carry on with their everyday lives without interference support what the Government and my right hon. Friend are saying?
Chris Philp
My hon. Friend puts it very well: the right to protest does not extend to the right to deliberately and intentionally disrupt the lives of fellow citizens by, for example, intentionally causing a 10-mile tailback on the M25. That is not reasonable, it is not proportionate, and it is quite right that we stop it.
Joanna Cherry
I do not think anyone is disputing that articles 10 and 11 of the ECHR are qualified rights, but it is not just the SNP that takes the view that this Act goes beyond what is permissible under articles 10 and 11: the Joint Committee on Human Rights, a cross-party Committee that I chair, unanimously published a report saying we thought this Act went beyond what was acceptable under articles 10 and 11. So will the Minister acknowledge that this is not just an SNP view, and that it is a view held by a cross-party Committee of both Houses that this Act went too far and breached articles 10 and 11?
Chris Philp
I understand that the hon. and learned Lady’s Committee reached that view; clearly the Government, informed by considered legal advice, took a different view. That is why on the front of the Bill when it was published there was a statement made under section 19(1)(a) of the Human Rights Act 1998 that the Government’s view—informed, as I have said, by legal analysis—is that it is compliant with the ECHR. That is particularly because, as the hon. and learned Lady acknowledges, articles 10 and 11 are qualified rights and they are qualified by, among other things, the right of the legislature and the Government to prevent “disorder or crime”. I put it to this House that causing a 10-mile tailback on the M25 does constitute disorder, and I would say we are entirely entitled to protect our fellow citizens from being prevented from getting to hospital or getting their children to school.
Sir Julian Lewis
The Minister has just uttered the key argument I was hoping to hear from him, which is that even the right to protest is a qualified right, not an absolute right. I quote in support of that something I revere even more than the ECHR, John Stuart Mill’s “On Liberty”, which says:
“The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.”
That is where the absolute right is restricted to being a qualified right.
Chris Philp
My right hon. Friend and John Stuart Mill, the famous libertarian philosopher, are absolutely right. The right to protest, and indeed other rights, should not be enforced or enjoyed at the expense of other people. I know that the protesters think that they have an important and strong case, but that does not confer on them the right to ruin other people’s lives. It is not that they do so incidentally or accidentally as an unintended corollary of their protest; they are deliberately, intentionally and by design setting out to ruin other people’s lives. That is what the Government seek to prevent, and that is what this Act of Parliament seeks to do.
This Act of Parliament received Royal Assent only a short time ago having been through both Houses of Parliament. I think there was about a year between the Bill’s introduction and the completion of its passage through both Houses. The Bill had extensive scrutiny in Committee and was subject to extended ping-pong. No one can say that it did not have extensive scrutiny. That is why it is extraordinary that the nationalists now seek to repeal an Act that received Royal Assent only a few weeks ago.
Angus Brendan MacNeil
On the protests on the day of the coronation of His Majesty the King, does the Minister feel that the authorities overstepped the mark in their dealing with the protesters?
Chris Philp
No, I do not. I grateful for the opportunity to talk about that in more detail. Of course, there was an urgent question on the topic last Tuesday, when we debated and discussed it at some length. Since the hon. Member asks about the coronation, let me turn to that, as it is prayed in aid frequently. The most recent information that I have is that a total of 70 arrests were ultimately made on the coronation day. As I understand it, only six out of 70 were made under the new Public Order Act 2023. The others—I will not read out all of them—included arrests for possession of class A drugs; a sexual offender in breach of a condition; 14 people arrested and bailed for breach of the peace; 32 people arrested for conspiracy to cause public nuisance, all of whom have been bailed; one person arrested and bailed on suspicion of sexual assault; and one person arrested for handling stolen goods. The list goes on.
So 70 arrests were made, but only six of those were under the powers in the new 2023 Act. Of course, arrests may be made on the basis of reasonable suspicion. Much has been made of the fact that people were subsequently released. The six Republic protesters were released, and no further action is being taken. It is entirely possible for someone to be arrested on the basis of reasonable suspicion but, on further inquiries being made, it may be that the threshold for charge or prosecution is not met. Of course, in that case, no further action will be taken.
As I said in response to the urgent question posed by the hon. and learned Member for Edinburgh South West (Joanna Cherry) last Tuesday, we need to keep in mind the context in which the coronation took place. In the 24 hours preceding the coronation, there was a lot of intelligence—specific intelligence—about several well developed and well organised plots to cause serious disruption, including deliberately causing the horses to stampede, throwing paint over the ceremonial procession and, separately, locking on to the ceremonial route. This was a huge policing operation, with 11,500 police deployed that day, policing an enormous crowd. Things were moving very quickly indeed. Given that, the police were doing a difficult job in difficult circumstances—it was the event of a generation and the eyes of the world were upon us—and I think they did act reasonably.
Joanna Cherry
The Minister said a moment ago that only six people were arrested under the new Public Order Act and that they were the six Republic protesters with the luggage straps. When I asked my urgent question last week, we did not know about the Australian superfan who had had gone out to celebrate the coronation and was lifted on The Mall and held in prison all day. Will the Minister tell us on what basis that lady was arrested? I would be really interested to know, and I am sure that her solicitors will be as well.
Chris Philp
No doubt. I think the information I have in front of me predates the release of the information the hon. and learned Lady is referring to, so I do not think I can answer her question. From the facts I have seen publicly reported, it would appear that subsequently, upon investigation, there was not a reasonable basis to detain the lady concerned. Obviously, at the time it occurred, it is likely that the officer had some reasonable basis, but upon further investigation they discovered there was nothing further to be done. Clearly, in policing—[Interruption.] Let me finish the point. Clearly, in policing an event with probably hundreds of thousands of people present, 11,500 officers present and a great deal of confusion on the ground, mistakes occasionally—unavoidably—get made. I suspect, by the way, that she was not arrested under the provisions of the new Act, but I do not know for sure, so I do not state that with any certainty. It is very easy, with the benefit of hindsight, to say what was right and what was wrong, but given the context and the circumstances of the day—a huge event, with the eyes of the world upon us and a very threatening intelligence picture—I do not think it is reasonable to be unduly critical.
Sir John Hayes
I am extremely grateful to my right hon. Friend for giving way again. I do not, unlike my right hon. Friend the Member for New Forest East (Sir Julian Lewis), revere the European charter, the Human Rights Act or even John Stuart Mill.
Sir John Hayes
I am pleased to hear that. But I do revere Edmund Burke. It was Burke who said:
“Nothing turns out to be so oppressive and unjust as a feeble government.”
So when the Government act in anything but a feeble way, they are acting justly and rightly in defence of law-abiding, decent patriotic people. [Interruption.] I see the hon. and learned Member for Edinburgh South West (Joanna Cherry) chuntering. Burke also said, of course, that liberty cannot exist in the absence of morality. When the Government act to do what is right and just, they deserve credit, praise and congratulations. They have mine.
Chris Philp
I am grateful to my right hon. Friend for his words of support and for quoting that great thinker, Edmund Burke. It is necessary that the Government and Parliament pass laws, and that the police implement those laws, in defence of peaceful protest of course, but also in defence of law-abiding members of the public who want to go about their day-to-day business.
Gary Sambrook (Birmingham, Northfield) (Con)
Is the Minister not struck by the irony that if anything had gone wrong on that day, the same people would be in this Chamber blaming the Government for not taking the appropriate steps to protect the public and the historic event? Is it not the case that, time and again, those on the Opposition Benches are on the side of the people who want to disrupt hard-working, peaceful people going to work and enjoying themselves in their day-to-day lives?
Chris Philp
On my hon. Friend’s first point, hindsight is something we get quite a lot of from the Opposition these days. I agree that the Government are on the side of law-abiding citizens who want to go about their day-to-day business. That is why the Act was constructed in the way it was and why it was passed after great deliberation by both Houses of Parliament. I see my right hon. Friend the Member for North West Hampshire (Kit Malthouse) is in his place. I think he had a considerable hand in formulating the Bill, so I take the opportunity to thank him and congratulate him on his work.
The Public Order Act 2023 was passed just a few weeks ago and it received Royal Assent even more recently. It would be absurd to attempt to repeal a piece of legislation so soon and there are no plans at all to do so. It would appear that even Captain Hindsight, the Leader of the Opposition, can see that.
Sarah Jones (Croydon Central) (Lab)
Here we are again. I have made more than 20 speeches on public order legislation over the last two years, through the passage of the Police, Crime, Sentencing and Courts Bill and the recently passed Public Order Bill. No MP has debated public order more times than me. Ministers are here one day and gone the next, as always with this ever-revolving door of weak government, but I have been here and I am weary of a Government who have refused to listen to hon. Members on their own side, to hon. Members on the Opposition Benches, to the public and to many current and former police officers. Instead, they have chosen headlines over common sense, party interest over freedom, and strict limitations over liberty.
Then again, perhaps none of that is surprising given the extraordinary rhetoric coming out of the National Conservatism conference over the last couple of days. Even the readers of “ConservativeHome” have described it as utter nonsense. The right hon. Member for North East Somerset (Mr Rees-Mogg), astonishingly, admitted to his party’s own gerrymandering through voter ID at elections. The Government appear to be fighting democracy, whether on voter ID or unnecessary restrictions on the right to protest. We are all watching on as the Conservative party loses its way in real time.
Our essential case on public order has always been this: in his review of protest powers, the inspector, Matt Parr, called for a minor reset in the balance between police powers and protester powers. That followed protests that involved people attaching themselves to infrastructure and gluing themselves to roads. Of course, protesters must not grind our infrastructure to a halt or put themselves or others in danger by gluing themselves to motorways. The police must take swift and robust action when people break the law. The legal system must respond and ensure there is appropriate punishment.
We did not disagree that a minor reset might be required. To that end, we suggested new powers to make it easier to take out injunctions, which the Government rejected. We tabled amendments that aimed to give the police better training, as the inspector recommended, better understanding of the law and a more sophisticated response to long protests. We worked to minimise the negative impact of serious disruption prevention orders after our efforts to remove them entirely did not pass.
We won important votes in this place, such as to amend the Public Order Bill so that buffer zones of 150 metres around abortion clinics are now law. That is a vital step forward that protects those going through a potentially traumatic experience from harassment, unlike in Scotland where the SNP is failing to make that a priority, and recently disbanded its own Government working group on the issue. Perhaps women in Scotland might benefit if it focused less on political stunts and more on using its actual powers.
We put forward measures in the Police, Crime, Sentencing and Courts Bill on vaccine clinics to ensure that people could not be targeted by harassment and intimidation. We supported new protections introduced into the Public Order Bill in the House of Lords for journalists reporting on protests, because a free press is a hallmark of a democratic society, as is the right to protest.
Sir Julian Lewis
I support a lot of the items on the list of measures the hon. Lady has read out. Would she be prepared to add one more? Although protesters have a right to have their voice heard, that does not involve a right to make a huge amount of noise at enormously high volume, incessantly over substantial periods in the public space, any more than I would have a right to shout her down in this House if she had not given way to me.
Sarah Jones
We have debated at great length the right balance—when protest becomes too much and against the law, and when it does not. When people are shouting, as they do all the time in Parliament Square, we find it annoying, but it is their right to make noise, so long as they are not infringing people’s rights. We debated that endlessly during the passage of the Police, Crime, Sentencing and Courts Bill.
Considering the scope and low bar of most of the powers in the Public Order Act, reporting on their potential misuse or wrong application is even more important. We set out again and again the many laws that already exist to ensure that the police can act: obstruction of a highway, criminal damage, conspiracy to cause criminal damage, trespass, aggravated trespass, public nuisance, conspiracy to cause public nuisance, breach of the peace, and intention to prevent another person from going about his lawful business.
We looked carefully at all the measures the Government suggested. Would they solve the problem that they were introduced to fix? In the majority of cases, the answer was no. It was not the minor reset called for by His Majesty’s inspectorate, but a root and branch upheaval—a serious disruption to our protest laws. We voted against the Public Order Bill again and again. We suggested many amendments, we supported Lords amendments and we agreed with hon. Members on all sides of the House, but still the Government forced their measures through.
Yesterday, a former Cabinet Minister told the Tory fringe that
“the surrender to the blob risks exposing the Government to ridicule.”
He was perhaps missing the point. The Government have not succumbed to a blob; the Government are the blob. It is the Government who are taking away our freedom, circumventing democracy by passing laws through secondary legislation—as they did just before the coronation—and threatening to lock people up for having string in their bags.
We expect poor behaviour from the Government, but I am disappointed with the SNP. During the passage of the Bill, SNP Members made some principled arguments and engaged seriously with its content, but today is nothing more than a political stunt. SNP Members know full well that the Public Order Act does not apply in large part to Scotland. As the Minister said, the SNP and the Scottish Parliament passed a legislative consent motion on the Public Order Bill agreeing to the small number of parts that affect Scotland.
SNP Members know that they do not have the numbers to repeal or amend this legislation next week. It is just a stunt. Understandably, SNP Members are on a mission to distract from the spectacle of police digging up the former First Minister’s lawn, the talk of burner phones and clandestine camper vans, and the outrage of senior party figures being arrested. But we will not dignify this stunt with our support.
What would Labour do with this mess? We will not introduce legislation for the sake of it and ignore the real problems, like this Government have done. We would do three things. Our first priority would be to make our streets safe again: cut knife crime, halve violence against women and girls, and put 13,000 police back on our streets. That will be the golden thread running through everything we do.
Secondly, we will have to untangle the mess the Government have made, look at the raft of unnecessary legislation this Government have brought in, and work with the police to make sure that that delicate balance between people and the police is maintained. We will want to change suspicionless stop and search, where anyone can be stopped for any reason just because a protest could be happening nearby, and intention to lock on, where anyone with a bicycle lock, a ball of string or luggage straps can be arrested just because a protest could be happening nearby, as happened at the coronation. We will look at serious disruption prevention orders, where someone can have seriously restricted conditions imposed on them before they commit any offence at all, which is the same way the Government treat violent criminals and terrorists. We will want to keep buffer zones around abortion clinics, which the Government resisted for years, and the new measures to protect journalists.
Thirdly and finally, our approach to the police will not be the hands-off, push-blame-out and take-no-leadership approach we see under the Tories, who cut 20,000 police and were surprised when the arrest rate plummeted. We will have an active Home Office that enables our police to do their jobs to the highest standards, with no more excuses.
There is a careful balance between the right for people to protest and gather, and the right of others to go about their daily business. It is paramount that we protect public infrastructure, our national life and our communities from serious disruption, just as it is paramount that we protect the freedom to protest.
The coronation of King Charles III, which I was privileged to attend, involved the largest police effort ever undertaken, and I pay tribute to the police officers who ensured that so many people were able to safely enjoy such a historic occasion. However, there were problems with a handful of people being arrested under the new law and held for hours, who had been trying to protest or even trying to attend the coronation. We had warned the Government again and again that their measures were too broad, and it would seem we were right.
Some protests go too far—I make no apologies for saying that. To see a painting splattered with paint: too far. To see ambulances blocked on roads: too far. The Labour party has always stood with the people of this country in saying that such disruptive activities are unacceptable. It is our job as legislators to come up with proposals that solve problems, not create them.
It is also our job to be serious about governing and not to throw political stunts. We refuse to be drawn into the political games of two parties that are paralysed by crises of their own making. On every single one of the 20 or more occasions that I have stood in the Chamber to debate these Bills, Labour has demonstrated our serious approach to legislation. We do not take our responsibilities as the Opposition lightly, and we will not take our responsibilities lightly in government.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. I do not propose to put a time limit on speeches, but I ask hon. Members to recognise that this is an Opposition day debate. It is up to Opposition Members to decide who speaks and for how long.
Tom Hunt (Ipswich) (Con)
It is a pleasure to speak in the debate, Mr Deputy Speaker.
It is very difficult to strike a balance between respecting peaceful protest, which of course is a cornerstone of our democracy, and occasionally placing a limit on it when the action of the protesters goes too far, causes immense disruption to the law-abiding majority who are just going about their business, and, on certain occasions, may cause a risk to people’s lives: we have seen many occasions when ambulances have been blocked.
On Saturday 18 March, Just Stop Oil held a protest in Ipswich. It was one of those go-slow marches; it started the go-slow marches last December. It is a new tactic from Just Stop Oil, the aim being basically to bring traffic to a standstill pretty much; traffic is almost stationary. I suspect that, curiously, that has a negative impact on the environment—we all know that air pollution is worse when vehicles move at that pace. The irony of that is a slightly different issue, but that is a tactic it has employed, including in Ipswich on 18 March.
I will not overstate the disruption that was caused. There was not a massive amount of disruption. A number of different people locally made it clear before the go-slow march that it would not be appreciated, and I think that by and large the police should be commended for taking a reasonably robust line—it was perhaps not quite as robust as I would have liked, but it was reasonably robust. Ultimately, it still should not have happened. We still should not have a situation where Crown Street, one of the business streets in Ipswich, on a Saturday, a match day, is basically closed off.
Under the Police, Crime, Sentencing and Courts Act 2022, the police had the ability to go further than they did. The Public Order Act gives them a much firmer steer than the provisions before the Act. Ultimately, however, we still had a degree of disruption caused that should not have been caused. We also had various activists going around making various demands. I am sorry, but a protest is about expressing your views strongly. It is not about making demands and saying, “We are going to do this and we are going to cause untold disruption to the vast majority of people until we get what we want.”
We can add to that another way in which my constituents have been negatively impacted. Many of the most disruptive protests have been to do with oil refineries in Essex and the eastern region. That has of course pulled policing resources from Suffolk. The police have had to go out there and cover some of the Just Stop Oil protests on the M25 as well. At a time when we have a problem with antisocial behaviour and crime in Ipswich town centre, police officers who could be on the beat in the town centre, making my constituents safer and making them feel safer, are being drawn elsewhere because of some of these reckless, disruptive protests.
Coronation day was, of course, a great national spectacle of profound importance to our country, a once-in-a-lifetime thing for most of us, and the world’s eyes were on us. Again, I think the police should be commended for the role that they played. They had to make incredibly high-pressure decisions: they had to make judgment calls in moments when they did not have much time to think about it. We had a fantastic event that passed with great fanfare. Yes, the police made decisions to arrest a number of people, the vast majority of whom probably deserved to be arrested. A small number, it turns out, did not, and the police have apologised for that. But ultimately we had a very successful day, and I think that the vast majority of my constituents backed the way the police handled it. They did it properly and got the balance right between allowing peaceful protest and preventing action that could have caused significant danger. We heard examples of rape alarms being set off, which could have disturbed horses, with all the security concerns associated with that. I myself stood on Whitehall and saw opposite two different groups of protesters holding up “Not My King” signs. I profoundly disagreed with their message, but it is their right to express that and they did express it. The idea that there were not significant numbers of people protesting against the monarchy that weekend is ridiculous. There were: I saw them and many others saw them as well.
Bob Stewart (Beckenham) (Con)
I thank my very good friend for allowing me to intervene. I think that this matter is all about fairness. It is fair that people are allowed to protest, but it is equally fair that people’s lives should not be seriously disrupted by those protests. Human rights, on both sides, are what this Act is about.
Tom Hunt
I agree with my right hon. Friend. It is about a balancing act. I am not concerned about the Act: it does a good job in getting the balance right. It still allows peaceful protest, but it draws a sharp line. Actually, it was explicitly asked for by the police. The Labour party says that it respects and supports the police: well, the police asked for the Act. They said they wanted more clarity and they have got it through the Act, and that is to be welcomed.
I find this slightly curious. It is interesting watching the dynamic at play between the Scottish National party and the Opposition. An interesting dynamic seems to be emerging here; a bit of tension between the two parties. It is intriguing that this was selected by the SNP as the subject of the motion today. It is also intriguing that virtually no Labour MPs are present. It is interesting that the Labour party explains this away as “Oh, this is all the SNP playing games and we’re bigger than this.” That is really not the case. The reason no Labour MPs are here is that they find it profoundly awkward. There is a huge tension between two different groups that they look to appeal to. The first is voters in Scotland who may be torn between the SNP and Labour, who might be very much on the side of protesters. On the other hand, Labour MPs might deep down know that the vast majority of the public—
Mr Deputy Speaker (Sir Roger Gale)
Order. The hon. Gentleman is entirely within his right not to give way, but I did suggest a self-denying ordinance on the length of speeches, so I trust he will be bringing his remarks to a conclusion.
Tom Hunt
I will be concluding my speech. I have further points that I would like to make. I will take an intervention at a time of my own choosing.
Ultimately, there is a tension between the Labour party looking to appeal to voters north of the border, who may well sympathise with extremely reckless protests, and those south of the border. I suspect that Labour Members know deep down that the majority of the public—
Karin Smyth
To be very clear, we are very interested in the hon. Gentleman’s constituency, not just those north of the border.
Tom Hunt
I am not really sure what the point was there. I have said that there is a tension in the Labour party: we have no such tension on this side of the House. And we do not have a problem with sitting on fences. I sat through the Public Bill Committee for the Act. I saw the Labour party vote against every single aspect of it and every aspect of the Police, Crime, Sentencing and Courts Bill.
Several hon. Members rose—
Tom Hunt
I will not be giving way anymore.
I also saw locally that the Just Stop Oil activists, once they had finished their protests, went and joined another protest that was attended by the Labour parliamentary candidate and half the Labour council, which was in favour of illegal immigrants being in the local hotel. It is clear what side of the fence the Labour party falls on.
I will bring my remarks to a close, even though we have had much longer speeches from Members on the other side of the House. However, I think I have got pretty close—
Tom Hunt
It is clear that I have touched a nerve here. I find the interplay between the SNP and the Labour party quite remarkable. The reality is that the Labour party has made it clear time and again that they are not on the side of the law-abiding majority looking to get to work and to go about their business—
Tom Hunt
You are on the side of reckless protesters who, time and again, want to grind our settlements to a halt. It is absolutely clear. I will draw my remarks to a close, but will watch with interest the dynamic and interplay between the Labour party and the SNP. We will continue to see the Labour party evolve over the coming weeks.
Mr Deputy Speaker
I should have said earlier that I intend to start to call the Front Benchers at twenty to 7. That should give Members an indication of how long they have.
Joanna Cherry (Edinburgh South West) (SNP)
The last 12 months have seen an unprecedented attack on the right to protest, not just with the Public Order Act but with part 3 of the Police, Crime, Sentencing and Courts Act, which preceded it. The right to protest is part of the right to freedom of expression. In the travaux préparatoires for the European convention on human rights, freedom of expression was described as
“the touchstone of all freedoms”.
That is because it is essential for the fulfilment of all our other rights and it is also an essential underpinning of any democracy. The European Court of Human Rights has said that freedom of expression constitutes one of the “essential foundations” of a democratic society:
“it is applicable not only to ‘information’ or ‘ideas’ that are favourably received or regarded as inoffensive or as a matter of indifference, but also to those that offend, shock or disturb”.
That is the price of freedom of expression, and a democracy that loses sight of that is in trouble.
Unfortunately, across the United Kingdom, we are allowing a degree of authoritarianism to creep into our public life. We have even recently seen the police turning up at the door of members of the public to check their thinking, which is a serious attack on freedom of expression. When the police interfere with the right to protest, it is a similarly serious attack on freedom of expression.
I know Conservative Members purport to care very deeply about freedom of speech, and I am on record as saying that I think the left needs to do more to speak up for freedom of speech, but I am afraid to say I detect a degree of hypocrisy that a party that says it wants to strengthen protections for freedom of speech in the now defunct Bill of Rights and in the Higher Education (Freedom of Speech) Act 2023 has passed legislation that is a fundamental attack on the right to protest, which is another crucial aspect of freedom of expression.
Sir Julian Lewis
I have huge respect for the hon. and learned Lady, who has been courageous in expressing her views on gender, with which I happen to agree. It is disgraceful that she has been cancelled and had her right to free speech infringed in many ways, but I put it to her that she is talking about people’s right to say what they want to say, rather than how they go about protesting, which is what the Public Order Act is about. She has every right to say what she wants to say, but does she have the right, for example, to use huge amplifiers in a public space for hours on end so that nobody can hear themselves think? The Act is not about content; it is about protests that infringe the right of others to go about their normal life.
Joanna Cherry
As others have said, it is a question of balance. I think it was a Conservative Back Bencher who, during one of our many debates over the past year on the right to protest, listed all the laws that already applied in England and Wales and the huge amount of powers the police already had to deal with disruptive protests prior to the passage of the Public Order Act and part 3 of the Police, Crime, Sentencing and Courts Act. On one level, we could say this legislation is quite performative, because the police could already use existing laws, but on another level it is much more than performative because, as we saw at the coronation, it could have a chilling effect on the right to protest.
I am grateful to the right hon. Gentleman for the generous things he said about me, and I am happy to tell him that I have been uncancelled as a result of taking legal advice. For women like me who are being cancelled because we do not agree with self-identification of sex without any safeguards, it is not just a question of our right to freedom of speech; it is also a question of our right under the Equality Act 2010 not to be discriminated against because of the philosophical beliefs we hold, which an appeal court has said are worthy of respect in a democratic society.
I digress, because the point I want to make is that the right to protest is an aspect of freedom of expression. Conservative Members say they care about freedom of expression when it comes to freedom of speech in the now defunct Bill of Rights and in the Higher Education (Freedom of Speech) Act, but they seem to care about it rather less when it comes to their crackdown on the right to protest.
Both those Acts and the Public Order Act, which we want to see repealed, apply only in England and Wales, but as my hon. Friend the Member for Glasgow Central (Alison Thewliss) ably explained, in her usual way, many Scots come to London because, unfortunately, the seat of power is still at Westminster and a lot of legislation is passed in Westminster on matters about which Scots feel very strongly, such as nuclear weapons, so we often come here to protest. It also matters what happens to foreigners who come to London. What happened to that Australian lady who was lifted by the police and kept in jail all day on the day of the coronation was a disgrace. I hope she has taken legal advice, because she ought to be able to get hefty damages for wrongful arrest. I can just about understand why the police might have made a mistake, but I do not understand why they did not realise their mistake sooner and why that poor woman was kept in the cells for hours on end. There is a suspicion that political pressure was on the police to crack down, and I will come to that in a moment.
At the time of the death of Her late Majesty Queen Elizabeth, there were some protests when the new King was proclaimed. Many of us were concerned about heavy-handed arrests of people, both north and south of the border, who were protesting in the name of republicanism, anti-imperialism or disapproval of the behaviour of a certain member of the royal family. Some might question whether it was the appropriate time to do that, after the death of the Queen, but the right to protest is fundamental and should be facilitated. The fact that it might upset some people does not mean it should not be allowed to happen. After what happened in the aftermath of the Queen’s death, many of us warned that in future greater care would need to be taken by the police to facilitate the right to protest, particularly during the coronation. What is so awful about what happened to those six republican protesters lifted because of their luggage straps, under the locking-on provisions of the 2023 Act, is that they had gone to incredible lengths to discuss in advance with the police the nature and extent of the protests they wanted to make. They were then lifted at the start of the day and, again, held until after 11 o’clock at night. I do not understand why they had to be held for so long when a mistake had been made.
Instead of looking at the necessity of facilitating protest, what happened prior to the coronation was that parts of this Act were rushed into force with incredible haste and they appear to have been used to crack down on protesters who had gone to considerable lengths to try to clear their actions in advance with the police. As I said, there is a suspicion that political pressure was brought to bear on the police. If that was to have happened in a democracy, it would be scandalous. It is not me making this accusation, because a senior source in the Metropolitan police said that “pressure” had come from above and Sir Peter Fahy, the former chief constable of Greater Manchester police, said on Radio 4’s “Today” programme that what happened with the wrongful arrests at the coronation has to be seen in the “context” of media, political and public pressure on the police. He referred to what he called
“some pretty direct and personal feedback”
brought to bear on Sir Mark Rowley before the Home Affairs Committee on 26 April. Sir Peter, a senior retired police officer, also said, as the Opposition and the SNP have said in this House and are saying again today, that the 2023 Act is poorly defined and far too broad. That is what Opposition MPs said about the offence of locking-on and it was proved to be right by the arrest of those six innocent protesters at the coronation.
Peter Grant
I have no doubt that the Government will deny until they are blue in the face that any political pressure was ever put on the Met, but does my hon. and learned Friend agree that the deliberate timing of the rushed passage of the Bill through its final stages could not have done other than send a clear message to the Met that it was expected that that legislation was to be vigorously enforced on coronation day, the first major day of protests after it was put in place? Is it not the case that the Met commissioner’s statement could only have been intended to make every police officer on duty that day feel that they were under pressure to deliver the goods?
Joanna Cherry
That very much seems to be the case.
As my hon. Friend the Member for Glasgow Central (Alison Thewliss) said, the Home Affairs Committee will be conducting an inquiry on this tomorrow and hearing evidence. I am pleased that both the Chair of the Justice Committee and myself, as Chair of the Joint Committee on Human Rights, have been asked to join in that inquiry. I am very much looking forward to getting to the bottom of the question of whether political pressure was brought to bear, because I want to be clear: it would be absolutely unacceptable if political pressure had been brought to bear on the police. That sort of thing should not be happening in a democracy.
I will wind up in a minute. I have been speaking so far in a personal capacity, but, as Chair of the Joint Committee on Human Rights, I wish to point to our legislative scrutiny of the Public Order Act and of part 3 of the Police, Crime, Sentencing and Courts Bill. The Joint Committee is a cross-party Committee of six MPs and six peers—Tory, Labour, Liberal Democrat, SNP and Cross-Benchers. We produced two unanimous reports saying that both Bills, as they were then, went too far in cracking down on the right to protest and did not get the balance right under articles 10 and 11 of the European Court of Human Rights.
Kit Malthouse (North West Hampshire) (Con)
I hesitate to tangle with the hon. and learned Lady on matters of law, but, given all that she has said, would she also support the repeal in Scotland of what some might say are even more draconian measures that surround protests? For example, protesters have by law to give 28 days’ notice to the police if there is to be a protest. The offence of malicious mischief has been used against Just Stop the Oil protesters, which has an unlimited fine and unlimited prison sentence. In 2021, the Scottish Government applied for restrictions to be placed on protests around the Scottish Parliament building where we have seen many arrests and, indeed, people banned for long periods for protesting. I just wondered whether her Committee or, indeed, she had a view on those matters.
Joanna Cherry
My Committee’s job is to scrutinise what happens in this Parliament, not what happens at Holyrood. However, I want to correct the right hon. Gentleman. It was not the Scottish Government who asked for powers to restrict protests outside Holyrood; it was the corporate body of the Scottish Parliament that asked for those powers, and I am on the record as having criticised that, so I am consistent in my position here.
I wish to go back to what the Joint Committee on Human Rights said about getting the balance right under articles 10 and 11. We said:
“The current rhetoric around protest tends to downplay the importance of the right to…protest”
and instead focuses on discussions about balancing the rights of protesters against the rights of members of the public. We saw two problems with that. First, it often leads to the right to protest being given insufficient weight in the balancing compared with the rights of the public. Given that the right to protest is protected by the convention, it should be facilitated by the state so far as possible.
The second problem with this balancing is that it automatically assumes the rights of protesters are inevitably in conflict with the public interest. But that is not the case, because while protests may cause inconvenience, they are also fundamental in a democratic society to facilitate debate and discussions on contentious issues, and that in itself is of value to the public generally. We reminded the Government of the state’s duty to facilitate protest, a positive duty, and the police’s negative duty not to interfere disproportionately with protest.
I support the repeal of the Public Order Act because I believe, and a cross-party Committee that I chair supports me in that view, that it went too far, that it breaches articles 10 and 11 of the ECHR and also that there is plenty of existing legislation that the police have at their disposal to deal with disruptive protests that spill over into violence or become, in a sense, out of control. Therefore, this Act is unnecessary. I think that it was performative and that it will have a chilling effect on the right to protest in England and Wales, which is deeply regrettable.
James Daly (Bury North) (Con)
It is an honour to follow the hon. and learned Lady, for whom I have a great deal of respect. I am constantly astonished by Members in this House who make claims based on no evidence whatsoever. This idea of political pressure is a very good left-wing slogan, but there is no evidence whatsoever behind it. If the best witness for that is Sir Peter Fahy, I need to spend some time with the hon. and learned Lady telling her what a disastrous chief constable he was for Greater Manchester and for my area. That would be a lengthy conversation. If he is the advocate for political pressure and that is it, then, clearly, there is no evidence.
The other thing that Members in this House seem constantly able to do, even though they were not witness to anything that happened on coronation day, is to speak with absolute authority, as alleged witnesses to what was going on. Not one person in this House saw the circumstances that led to the arrest of those six people. Yet hon. Members, especially on the Opposition Benches, seem to be imagining that they were there.
The reason the police exist and they enforce legislation is that it is for the police to investigate and the courts to judge. It is not for politicians to involve themselves and to make statements on the basis of information and evidence that they do not have. Not one Opposition Member was witness to what happened on coronation day.
James Daly
Well, if the hon. Lady was a witness to those six arrests, I look forward to hearing from her.
Sarah Jones
Obviously I was not a witness to those six arrests; I was in the abbey—with the Commissioner, as it happens. I just wanted to point out that we make laws in this place that affect what our police do. That is our fundamental job, and our argument all along has been that the laws passed here have put the police in a very difficult situation, as we saw, which led to the Met’s having to apologise for what happened in that very small number of cases—the vast majority of cases were absolutely fine, but in that small number of cases there was a problem, and the police have admitted that.
James Daly
I think it is ludicrous that the police apologised. Apologised for what? As the Minister said, the police set out a statement on the circumstances of what they said had occurred on the day. It was perfectly lawful—[Interruption.] The hon. Lady raises her arm, but the one thing we know from the police perspective is that the police’s position was that the arrests were lawful. The matters were then investigated and, like many other applications or incidents, the people arrested were released without charge, because a decision was taken—with the Crown Prosecution Service, I am sure—that intent could not be proven.
There is literally nothing unlawful about that. The police should not have apologised. It was a ridiculous thing to do, because it plays into exactly what we are seeing here: the left-wing media hysteria that can be whipped up in circumstances that are completely legal.
Bob Stewart
I do not think it was political pressure that led to the arrests; it was following an Act of Parliament that we had just passed. The police were acting on that Act of Parliament, and they were doing so to the best of their ability.
James Daly
That is absolutely correct. In terms of how statute is drafted, I do not know what the Opposition want. If, for each criminal offence on the statute book, they want an absolute definition to cover every single circumstance that the police ever face, we will have the longest Acts ever to appear in this place.
The Conservatives have confidence in our police and our prosecuting authorities to use the discretion that this Parliament gives them to make correct decisions. If they do not make the correct decisions, those matters are tested in court and, as has been said, if there is an unlawful arrest, there is a legal process to deal with that. The fact that we are arguing about that here is utterly bizarre to me.
James Daly
I enjoy being heckled by those on the Front Bench, so I will take that.
I think we have got to the heart of the SNP argument. The hon. Member for Glasgow Central (Alison Thewliss) said she believed people should be able to protest in any way they want. Now if we take that argument to its end, it means that if someone glues themselves to the middle of the M62 or the M6 in my area, causing untold disruption and having a huge impact on people’s lives, there is no problem in respect of that.
There always has to be a restriction on the right to protest, compared with its impact on others. Why should Republic turn up to a coronation, where hundreds of thousands of our fellow citizens are celebrating, and find it strange the police are there and may well have concerns about behaviours that are going on, on the basis of intelligence that they have received? That is the job of the police. That is what happens in those circumstances.
Sir Julian Lewis
Surely it is a matter of context, even within the parameters of a single event such as the coronation. For example, a certain measure of vocal protest might be permissible out in the open air, but if someone had somehow got into the abbey itself while the coronation was in progress, and stood up and started shouting loudly that they disagreed with it, I would be very surprised if anyone on the Opposition Benches said that that person should be allowed to continue ad nauseam, irrespective of the offence and the disruption caused to everyone else.
James Daly
My right hon. Friend makes the point. Sometimes I think I am listening to a fantasy world in here. Effectively, what the Opposition are saying is that they would allow anybody to play music at any level for any length of time as long as they had the morality of the argument on their side. The fact that it would cause disruption and drive our fellow citizens demented does not matter. Anything that is done, as long as it is morally acceptable to the left, is justifiable. If protesters were arrested in respect of a Brexit demonstration, or a demonstration by someone on the right, none of them would stand up for that. It is the left-wing playlist.
We heard from the hon. Member for Glasgow Central (Alison Thewliss). She went through the alphabet of the greatest hits of left-wing protests—all of them. That is what it is about. It is about undermining the police’s ability to control protest on the left because the left discovered, through middle-class, self-indulgent narcissists in organisations such as Just Stop Oil, what they could do. They saw a way around things: “We will find the part of the law where we can get away with things. And what will we do? We will start gluing ourselves to motorways. We will start indulging in behaviour that is incredibly difficult for the police to police with the powers that they have.”
They saw that gap in the market for left-wing protests: “We can do this. We can cause as much disruption to people as possible. We don’t care, because we’re on the left; we’re on the side of the angels. We don’t care about whether people can get to school; we don’t care about whether people can get to their exams; we don’t care about whether people can get to hospital, because it doesn’t matter. Because our self-appointed morality means everything. That is it. It means everything.”
Sarah Jones
I think perhaps the hon. Gentleman has gone in the wrong direction. He means to be at the National Conservatism conference rather than in this debate.
James Daly
I know that you want to hear more of this speech, Mr Deputy Speaker, so let us get back to the proposal before this Parliament from a party that the legislation essentially does not affect. It seems odd that a party that has ruined the education system in Scotland and done various other such things does not want to talk about some of those fundamental issues for their constituents, but wants to talk about things that affect English constituents. I am glad in one sense, because it is at least an acceptance from SNP Members that we are one country—one United Kingdom—and that these matters should be important to us all. The Unionist is coming out in them all.
We are talking here about repeal. We are using up time in this place to debate the repeal of an Act that has been in place for, what, two or three weeks? By any measure of ludicrous debates, that is stretching it to the limit. What are we talking about within the Act that is so appalling, Mr Gale?
Mr Deputy Speaker (Sir Roger Gale)
Order. It is a matter of relatively small consequence to me, but although Mr Gale is the name I was born with, for the purposes of this debate I am Mr Deputy Speaker.
James Daly
I apologise, Mr Deputy Speaker.
I wonder whether our constituents think that going equipped to lock on—with apparatus to lock oneself to a motorway or something else to cause untold disruption —is an outrageous act. Well, of course they do. They think that that should be on the statute book, and that the police should have powers to enforce and take action against people who behave in that way.
Section 6 of the Act covers offences regarding the obstruction of major transport infrastructure. Well, let us go out and punt for anybody, anywhere who thinks that it is wrong to put in place and give police extra powers to ensure that people are not causing obstructions and putting themselves and other members of the public in harm’s way. Who on earth could object to that? Section 7 of the Act is on interference with national infrastructure. What does the right to peaceful protest have to do with someone sticking themselves to the middle of a motorway or any other transport infrastructure? It is not about that.
The Government should be immensely proud of this legislation, because not only does it respond to public concern, but it is a common-sense measure to address behaviours that were causing grave concern to people in my constituency and throughout the country. We can never be in a position where we allow the outrage of the left to overcome the rights of our fellow citizens in this country to get on with their lives in a peaceful and appropriate way. This is a good piece of legislation. There is not one shred of evidence to back up what those on the Opposition Benches are saying. Most importantly, the Act preserves the right to peaceful protest, and anybody who says anything to the contrary is clearly incorrect.
Tommy Sheppard (Edinburgh East) (SNP)
On the afternoon of Saturday 6 May, I attended a rally called by the Scottish campaign group Our Republic at Calton Hill, overlooking Princes Street in Edinburgh. It was a well-attended event. People there were passionate and they were purposeful, but they were also extremely peaceful. They were, I think, buoyed up by recent polls showing that the case they were making is now supported by a majority of people in Scotland under the age of 35. They were there to express their opposition to the concept of an hereditary monarchy and to proclaim their support for Scotland becoming a self-governing country with a republican constitution that would allow the people to elect the Head of State.
Less than a mile away, at a different venue, there were people gathered to celebrate the coronation of King Charles III—a slightly smaller number, I have to say, but I am sure that they were just as passionate and just as purposeful. Both events were policed discreetly and minimally, and both events passed off without incident. They allowed people in Edinburgh to express conflicting opinions on what was undoubtedly the biggest historical event of that day and possibly of this year. That is as it should be, but I fear that if the main provisions of the Public Order Act had been in force in Scotland, events might have unfurled rather differently on that day.
Let me be clear why we are concerned about this. We have heard ill-informed opinions expressed from the Government Benches suggesting that there is something untoward about the SNP seeking to repeal a piece of legislation most of which does not actually apply in Scotland. I have the privilege of representing part of our capital city, Edinburgh—an area full of rich and active communities with a lot of engaged citizens who quite often wish to protest about injustices they see around them. As colleagues have said, many of the decisions about those things are made here in this Parliament, so when there is a protest about whether we should be part of the European Union, whether we should be arming ourselves with new weapons of mass destruction or whether we should be invading foreign countries, we can expect busloads of my constituents to come to this city and attend. It concerns me—indeed, it is unacceptable to me—that my constituents have less protection of their right of expression once they cross the border than they have when they are in Scotland. That is why I want this piece of legislation repealed.
The hon. Member for Bury North (James Daly) asked for evidence. The evidence I have to back up my argument is what happened on that same day on the streets of this city, less than a mile from this Chamber. At 7 o’clock in the morning, Graham Smith, the chief executive of the organisation Republic, and five other members of his organising team were arrested by the police. They were arrested on the suspected charge of going equipped under the new Public Order Act. It was 7 o’clock in the morning. I know Graham Smith. He is a man of the utmost seriousness, sincerity and integrity. There is no way that he would be associated with anything other than making a peaceful protest, and his arrest at 7 o’clock in the morning—before people had even come to the city centre—was not done in order to prevent harm being caused to others. It was not done because there was a threat to disrupt the coronation festivities. It was done, I believe, because there are people within Government and within the Metropolitan police who thought it might be embarrassing to the new King and the palace authorities for the demonstration to be successful, and wanted to try to disrupt that protest by removing its capacity—by taking away its key organisers and holding them in detention for 16 hours.
The truth is that the embarrassment that was caused that day was not to the King, but to this Government and the British state, because to all the rest of the world watching on, it looked as if a Government who try to stand up for dissidents in Moscow, Beijing or elsewhere were locking up dissidents on the streets of their own country. Nothing undermines an argument more than the charge of hypocrisy against those who advocate for it. That is why I believe those arrests and the use of the Public Order Act to make them have seriously tarnished the reputation of the United Kingdom as a global defender of human rights around the world.
It was the Public Order Act that was used, and there are provisions in that Act—new offences such as going equipped or conspiracy to order, or the new provisions for serious disruption prevention orders. Those are specific things in specific sections of the Act, but there is a much more insidious and sinister aspect to this issue, which is in the politics and the psychology around the legislation and its introduction. Two things are happening: the first is that law enforcement agencies are being given additional confidence, support and encouragement when they have an altercation with a protester. That allows some more zealous and less considered members of those law enforcement agencies the opportunity to go beyond the capacity of the law—to overstep, and to do some of the things that happened on 6 May. I would have thought that if any institution ought not to be given that encouragement, it is the Metropolitan police, given what has happened in recent years.
The other aspect of the psychological debate relates to citizens who wish to protest, because in debates surrounding this issue, the notion that there is somehow something illegitimate and difficult about people going to protest about something they are concerned about will lead many of them to sit at home and say, “I do not want to get involved. It is too much trouble.” That is not a good place for a democratic society to be. We ought to be making sure that we facilitate and stand up for the rights of people to express their opinions and disagree with others.
Kit Malthouse
I have a lot of respect for the hon. Gentleman, but he is giving the impression that north of the border in Scotland, no protester is ever arrested, convicted, or indeed put in prison. However, over the past five or six years, there have been numerous occasions when protesters have been arrested, convicted and imprisoned in Scotland, and indeed when protesters have had restrictions placed on their ability to repeat their protest. I was reading in the paper about a young lady in Glasgow who was restricted from continuing with her protest while on bail, so obviously the Scottish Government are drawing a line somewhere between these two competing rights. That is all the British Government are seeking to do in England and Wales.
Mr Deputy Speaker (Sir Roger Gale)
Before the hon. Gentleman replies, I ask him to keep a watchful eye on the clock.
Tommy Sheppard
Thank you, Mr Deputy Speaker. I hope to speak for less time than the hon. Member for Bury North.
I take the point made by the right hon. Member for North West Hampshire (Kit Malthouse). Actually, I am on record as having stood up for the people who were arrested at demonstrations last year in my own city of Edinburgh, and I thought Police Scotland did overstep the mark on that occasion. As a consequence, no charges materialised, and the police have more or less accepted that, but they did not have the Public Order Act to turbocharge the possibility of that overreach and overstep. That is why I am concerned about the Act and believe it should be repealed.
One understands that there has been a debate happening inside the right of British politics in recent decades. It is distressing but understandable that legislation such as this Act has gone on the statute book because an argument inside the Conservative party has been won by those of a more populist and authoritarian persuasion, and lost by those for whom human rights is a primary concern. That saddens me, and I know there are Government Members who are also concerned about it, but it is perhaps what one might expect from a party of the right.
What absolutely astonishes me is the reaction of His Majesty’s Opposition in this debate. I do not buy the argument that they do not want to support this motion because they think it is a stunt. One could—and they do—accuse us of that all the time. The truth is that the Labour party is embarrassed to support the repeal of this legislation, and that is a terrible thing to have happened. A once great political party that was born out of resistance and protest, and whose members’ views were framed by campaigning against social injustice, is now prepared to turn a blind eye and accept the constraints being put on our right to protest by this Act. It really is sad. I have friends on the Opposition Benches who are disquieted by that, and I hope very much that they will develop the confidence and the ability to bring their leadership into check.
It does no service to British democracy and no service to the British people when the Labour party—the party of opposition to this Conservative Government—sits on its hands and will not support the repeal of this most oppressive piece of legislation, which is taking away the rights and freedoms that have underpinned society in Scotland and England for centuries.
Mr Deputy Speaker (Sir Roger Gale)
Order. I still intend to call the Front Benchers at 6.40 pm.
Wendy Chamberlain (North East Fife) (LD)
I voted against the Public Order Act 2023 at every stage of its passage, and I outlined in my intervention the impact on Scots—those going to protest and those police officers involved in public aid. When the SNP Front Bencher, the hon. Member for Glasgow North East (Anne McLaughlin) stands to conclude the debate, I would appreciate it if she explained the legislative consent motion that was passed by the Scottish Government. I accept that it is limited in scope and refers to legacy legislation, but it would be good to understand why we have ended up in a position where some part of the Act has an effect within Scotland geographically.
I note that as a whole—I accept that it will have been a conscience motion—the SNP abstained on the abortion amendment that was passed on Report. I assume that that was because it would not have been applicable in Scotland, but the inclusion of the amendment does take England beyond where Scotland is currently, and again I hope that the SNP Front Bencher can update us on what is happening with abortion buffer zone legislation in Scotland, so that it can be brought forward at an early stage.
I mentioned police officers at the outset of my remarks. Those who, like me, participated in the progress of the Public Order Act at many, many stages will be well aware that I am a former police officer. Indeed, I am the only one to have spoken today. I may not have evidence of what happened at the coronation on 6 May in relation to the arrests, but I do have lived, practical experience of what it is to police a protest and what is required of police officers accordingly.
The right hon. Member for South Holland and The Deepings (Sir John Hayes), who is no longer in his place, made comparisons with police forces in other countries. I would say this to him, were he here: the origin of policing in the UK is policing by consent, and I am sure that all of us on both sides of the House agree with that principle. We do not have the militaristic history of many other national forces in other parts of Europe. That is how our policing has developed, and it is why we feel so strongly about this legislation.
In the Bill Committee, the importance of dialogue between those seeking to protest and the police was clearly outlined. If that dialogue takes place, protest can be facilitated and limits to disruption can be set. This Act and, frankly, the impact of its first contact with the public will completely undermine that relationship, and I believe it will make disruptive protest more likely to occur, rather than less.
In addressing directly the events surrounding the coronation arrets, the Minister explained away the arrest under this legislation of Alice Chambers and, indeed, those from Republic who were later released with the reason that it was a dynamic situation. He said that with the benefit of hindsight, it may have been different. I am sorry, but it is the actual job of the police to be highly trained and highly skilled so that they can respond appropriately in dynamic and highly pressured situations and make the right decisions in those circumstances, not have to have them corrected with the benefit of hindsight. Again, what does this legislation’s first contact with the public do to trust in policing?
During the passage of the legislation, I raised training in relation to both capacity—the time to train, including abstractions from frontline policing for that training—and capability. We know from the Casey report the high proportion of probationary constables in response and borough policing roles in the Metropolitan police, and they are often the same officers who are abstracted to police protests. We need to be confident that they have the ability and capability to do so. In response to my question during the urgent question last week, the Minister disclosed that the College of Policing guidance on the Act has not yet been published, so those policing last week were arguably, even if generally public order trained, not specifically trained in relation to this legislation. The consequences of that are clear.
The Labour shadow Minister, the hon. Member for Croydon Central (Sarah Jones), said that this debate is a stunt, but, frankly, Opposition day motions are an opportunity for Opposition MPs to do what they are supposed to do in legislative time, and that is to oppose. Having opposed this Bill at every stage, I will be taking the opportunity to repeal it, and I will be supporting the motion.
Peter Grant (Glenrothes) (SNP)
I want the Act to be repealed because it is a dangerous Act and, in spite of the protests we have heard, it very much affects the people of my constituency. It is not my choice that their laws are too often made here, but that is the way we have it for now. If they want to protest against the laws that have been made against them and pushed on to them, this is the place that they should come to protest. Scotland’s citizens are not yet in the same position relative to this place as the French citizens the Minister mentioned earlier. One day soon we will be, but for now, if my constituents want to protest against the obscenity of nuclear weapons, against the theft of the WASPI women’s pensions, against the daylight robbery that is inflation in food prices and electricity prices, against the billions of their pounds that are being thrown away through incompetence on HS2 and against the further billions being gobbled up by Tory party donors and friends through dodgy covid contracts, the place to protest against all those things is here—either outside this place or in the vicinity of this place—and anything that impedes the right of citizens to protest outside this place does affect my constituents. I notice, by the way, that even though the Tories and Labour think this is nothing to do with Scotland, they were quite happy to whip their Scottish MPs to vote on the Bill’s passage through this House.
It used to be a matter of television satire in a “Not the Nine O’Clock News” sketch that a police officer could arrest a completely innocent man on a whole series of trumped-up charges—because, we were led to believe, of the colour of his skin—such as possession of an offensive mother-in-law, or wearing a loud tie in a residential area during the hours of darkness. We now have it confirmed that, among the reasons that people—possibly my constituents—can be arrested and charged on the whim of a police officer on suspicion of having intent to cause serious disruption, are that they are protesting outside this place while walking too slow, running too fast, shouting too loud, having shoelaces that are long enough to tie themselves up to a lamppost with, carrying a megaphone or simply being close to a police officer who thinks they might have the intent to do any of those things. It could even be, as was the case with one unfortunate ultra-royalist last week, that they are standing in a crowd close to somebody who a police officer thinks might be thinking about doing one of those things. That can get them huckled, locked up and, as my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) said, made to spend the whole day in the cells, when they had clearly neither done anything wrong nor ever had any intent to do anything wrong. It strikes me that, in the same way as “Not the Nine O’Clock News” had all those ludicrous offences, the Minister, who is no longer in his place, appears to have accepted that if he is not quite the Minister for silly walks, he probably is the Minister for walking too slowly.
The Minister has said today what he said in answer to the urgent question last week, and it is an important point. He referred to clear evidence of multiple plots to deliberately cause a stampede to endanger the public. That would be a serious and reckless way to behave. Very interestingly, in the detailed statement the commissioner has issued—the statement is still on the Metropolitan police website—he does not say that that was the intent. The police were concerned about loud, noisy conduct that might have upset the military horses—military horses that are scared of noise, really? But very pointedly, they have not made a public statement that the intention was to cause danger to the public. That is important, because I cannot believe that the commissioner would not have said that if they thought they had the evidence to say it. I hope the Minister will clarify that point when summing up, or at least by responding in another way.
Where there is a genuine threat to public safety, we expect the police to intervene. The police thinking that somebody might have in their possession something that could potentially be used to cause disruption is not a legitimate cause for arrest; at least one Scottish Conservative MP could be arrested for carrying a whistle on his way home from one of his many jobs. Almost every significant advance in the rights of citizens, not only here but across the world, has relied on people doing things that would now be unlawful, criminal offences in the United Kingdom, with its mother of Parliaments; I notice no one seems to know who the father was.
This is a bad law, it is a dangerous law and it cannot be allowed to stand. This law would never be acceptable in Scotland. We heard earlier that when the people of Wales get a proper chance to decide their own future, they will get rid of this law as well. This debate offers Parliament a chance to accept that it has made a mistake and to put its mistake right now, not wait 10 years for the mistake to bed in.
Anne McLaughlin (Glasgow North East) (SNP)
I thank all Members who have spoken in this SNP debate on the repeal of the Public Order Act 2023. I particularly want to mention the speeches of my hon. Friend the Member for Glasgow Central (Alison Thewliss), my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) and my hon. Friends the Members for Glenrothes (Peter Grant) and for Edinburgh East (Tommy Sheppard), but where on earth were the Back Benchers from the Labour party? They are supposed to be the official Opposition, but perhaps we should not be surprised that the party that claimed to be opposed to this clampdown on the right of people to speak out and then U-turned when the polls said that we might actually be able to do something about it seems to have clamped down on its own MPs. No doubt those Labour MPs who have been—
Anne McLaughlin
No, as the hon. Lady refused to take my interventions.
No doubt those Labour MPs who have been consistent and committed in their principled opposition to this Act have been reminded that they are up for reselection soon. What about the rights of their constituents to be represented? What on earth has happened to the Labour party?
These are turbulent and troubling times. I doubt anyone in this place expected much of what we have witnessed in the last five years. From the global pandemic to the outbreak of war in Ukraine, from the mammoth surge in our constituents’ energy bills to the unprecedented rise in inflation, or from the erosion of our shorelines to the erosion of our human rights and liberties under Conservative rule, nobody could have predicted the extent of even that, but we can decide how we respond to it.
As a republican, perhaps the only positive to come from the King’s coronation for me is that the police’s use of this Act and other recent policing legislation has shone a light on exactly what these pieces of legislation really mean for people. The world watched on as members of Republic were shamefully arrested for holding pre-arranged, peaceful and lawful protests. The world must have been aghast, too, when three volunteers from Westminster Council’s Night Stars team were arrested while handing out rape alarms to women the night before the coronation. The police could do both of those things because this legislation hands them almost a free rein. This Conservative Government were hoping that might have gone unnoticed by the masses, but the coronation has ensured that the world now knows just how oppressive the UK has become.
The Public Order Bill was cobbled together when the Government did not get their way with their long list of 11th-hour amendments to the Police, Crime, Sentencing and Courts Bill. The House of Lords defeated those amendments. I am no fan of that institution, because I believe in elected representation and I do not believe in gifting power to friends, but the Government do, and they should have accepted that the system they support does not always go in their favour.
Anyway, the Government could not accept that, so they simply repackaged those amendments and within months moulded them into this badly drafted mess. It is not the only example: this is the Conservative Government’s new way of circumventing their version of democracy when they do not get their way. When the legislation is so bad it cannot get through, it is temporarily shelved and brought back in the hope that we have forgotten about it or do not have the energy to fight it. I can see why they might think that about the Labour party, as it has ably demonstrated for us today, but the SNP will always have the energy to fight for our constituents, because this pattern of behaviour is making an absolute mockery of the legislative process, and, worse still, a mockery of this place and our time here. It is also evading parliamentary scrutiny and procedure. For months, we argued that a definition of serious disruption must be written into the legislation and we were told that the Home Secretary would define it for us. The House can imagine how much reassurance that gave me. A day after Royal Assent, the Home Secretary introduced legislation by statutory instrument. Those regulations lowered the threshold for serious disruption from “significant” to simply “more than minor”, which does not fit with the descriptions we have heard from Tory Members today. Those regulations covered proposals that had already been rejected by peers across all parties during the Bill’s passage.
The haste by which the Acts were given assent and enacted meant that, when they hit the streets, the police were given zero time to train frontline officers. That is not fair on those officers. I remember seeing incredible footage last year. Officers arrested a well-known-to-us and pretty noisy protester outside this place under the policing Act just days after its enactment. It was ludicrous: when the protester rightly questioned why he was being arrested, those officers were forced to take out a laptop to look up the relevant legislation. Liberty, which is probably the most foremost civil liberties organisation in the UK, called the combination of the policing Act on public protest and the use of facial recognition technology a “toxic cocktail of measures”. It is not wrong.
For the majority of people, the right to protest is one of the few tools left at their disposal to push for change. My hon. Friend the Member for Glasgow Central, in an excellent speech, listed numerous peaceful protests that she has joined here. The Minister listed all the deliberate planned disruptions that he said people are sick of. Equally, I could list all the deliberate planned Tory policies that they are sick of and should have the right to protest against. We will all face serious disruption when the ice cap melts—a point not lost on the UN High Commissioner for Human Rights, Volker Türk. How embarrassing to be called out by the UN High Commissioner for Human Rights when apparently Britain used to be this bastion of human rights. How the mighty have fallen.
I thank the hon. Member for North East Fife (Wendy Chamberlain) for her support for this today. In answer to her question, the legislative consent motion that the Scottish Parliament supported was for one small clause, and she knows that the Scottish Government are not asked for legislative consent unless the measure is specific to Scotland. I can be clear that the SNP utterly opposes the Public Order Act.
One of the most egregious parts of the Act is suspicionless stop and search, which the Labour Party was vehemently opposed to, and rightly so. The right for the police to stop one of our constituents and search them without any suspicion of wrongdoing is better suited to Putin’s Russia than it is here. Yes, the blame for it lies fairly and squarely with the Conservative Government, but people expect to be able to rely on the main Opposition to oppose, and sometimes stop the governing party when that is called for. They expect to be able to rely on the Labour party to fight for their human rights and fight against racism—make no mistake, the huge disparity in the number of black people being stopped and searched is racist—but where was the Labour party when it came to the final hurdle? It caved, and it de-prioritised suspicionless stop and search.
We all know in here that Opposition parties often work much more closely together than the public realise. I want to try to explain what happened to people who might not know much about the internal machinations of Parliament. The SNP had an understanding with the Labour party that we did not need to call a vote on suspicionless stop and search because it would do it. Unlike in the Scottish Parliament, here, every party can only call votes on one or two parts of a Bill—I am saying this for members of the public. Because Labour told us that it would call the vote on it, we did not. Guess what? Labour did not either, so we lost the chance to remove suspicionless stop and search from the legislation at that stage.
Labour colleagues later said that it had been a mix-up at their end, so I said nothing publicly, despite being bitterly disappointed at the wasted opportunity, because I thought that we were on the same side. I thought that we could fight this dreadful piece of legislation together. The Labour MP in question assured me that there would be opportunities to tackle it in the Lords and Labour did duly table amendments, but again it fell at the final hurdle and caved in.
Now that the polls are finally turning and there is a chance Labour will get into power next year, we are told that it will not repeal the Act because it cannot unpick legislation and its party leader says he does not care if their policies sound like Conservative policies. How can Labour Members look their constituents in the eye and say that, yes, they will allow police forces under a Labour Government to carry out intrusive searches on anyone even near a public protest for no good reason? This is not a debating society and they are not supposed to be simply a change of management. This is Parliament. This is where we can and should make radical changes. If they are not interested, why are they even here?
I will end with a warning for both main parties in here. We are here to get independence for Scotland and, mark my words, we will get it. They are both utterly opposed to the people of Scotland making their own decisions, but if they keep stifling the right of the people of Scotland to protest against the decisions they make on their behalf, they will find more and more of them turn to us and they will make it a whole lot easier for people to vote for independence, whenever the next opportunity arises.
The Minister for Security (Tom Tugendhat)
It feels slightly churlish for a Conservative to get in the way of a family dispute between the SNP and Labour, but if I may answer on behalf of His Majesty’s Government, I will begin by giving a little praise and thanks to the hon. Member for North East Fife (Wendy Chamberlain). As a serving police officer, she did a huge amount for her community and our country. It is wonderful to have her voice in this Chamber. I must, however, disagree with the points she made.
A lot of the aspects of these debates have been focused on the nature of protest. The reality is that this is not a debate about the nature of protest. It is not a debate about the right of free citizens to associate on the streets to call for or against Government policies. It is not a debate about the ability of individuals, from anywhere across these islands, to protest about whether their fellow citizens should or should not be allowed to do things. It is not even a debate about whether we in this House should or should not encourage, or dissuade fellow citizens from certain actions. No, this is a debate about whether or not a small minority of people should be allowed to use disruption as protest: to use disruption as a way of stopping others from conducting their lives—
Tom Tugendhat
I won’t, thank you. As the hon. Gentleman spoke for as much time as my hon. Friend the Member for Bury North (James Daly), I am sure he will give me the few moments I have to close.
This is about whether a few people can use disruption, instead of allowing many to associate, to express their views and to just go about their business as they have every right to do. It is absolutely essential that we stick to that point because that is exactly why the then Scottish Justice Secretary Keith Brown—I am still rather a fan of his, actually, but I know I am probably unique in that in this Chamber—supported it. He welcomed it and agreed it. As a former royal marine, he knows about order and discipline, so I am delighted that he did so. He welcomed it because he knows that protest is absolutely legitimate, but disruption and the use of disruption to silence others, to stop people going about their business and to dissuade others from expressing their views is not.
That is really quite something, but I suppose the main point of the debate is not really about protest at all, is it? Here, I am slightly drawn to the hon. Member for Croydon—the one opposite me, the hon. Member for Croydon Central (Sarah Jones), rather than the one who sits next to me, the Minister for Crime, Policing and Fire, my right hon. Friend the Member for Croydon South (Chris Philp). She pointed out correctly that this is really—
Tom Tugendhat
Three of you. Well, there we go, aren’t I lucky?
The hon. Lady pointed out correctly that this debate is not about protest at all; it is actually about distraction. It is about distracting people in Scotland and across these islands from what we are really seeing here, which is a Scottish Nationalist party that has lost its way. It is talking about protest because it does not want to talk about policing. When I go to Gartcosh, I see the extraordinary efforts of the British security services in all their different ways, whether Police Scotland, MI5, the different elements of His Majesty’s Revenue and Customs or the National Crime Agency working together. I see an extraordinary panoply of officers who are doing their best for the country in ways that inspire huge respect for anybody who has the pride and security of our nation at heart.
However, every time I go, one thing comes up from the Police Scotland officers—fine individuals led by a very impressive chief constable. Every time, they point out that, despite Barnett formulas and equal availability of cash—in fact, despite higher taxes—the number of police officers in Scotland is going down. In England and Wales, it is going up. Crime in England and Wales is going down but, sadly, in Scotland crime is going up. It is not just about criminal justice or the ability of our fellow citizens across these islands to live and enjoy their lives freely without fear of persecution or being attacked by fellow citizens or others—it is across the board.
Despite well over a decade of absolute rule in Holyrood, the SNP has let down people in Scotland time and again. Education results are down, avoidable deaths are up, poorest student numbers are down and taxes are up. Again and again, a catalogue of failure and a pattern of wasted opportunity, wasted money and wasted lives are ruining opportunities for people across our islands.
I have been told several times today that this debate is relevant to the SNP because there is a small element of possibility, through the British Transport police, that connects it to Scotland. I have also been told that it is relevant because Scottish people can come down and protest in Westminster. It is also true that people across the whole of the United Kingdom have had the great benefit over hundreds of years of Scotland’s huge successes: the Scottish enlightenment, the great universities of Edinburgh and Glasgow, and the huge opportunities of the industrial and economic revolution that came out of Scotland. They have enriched and empowered us all.
It is right that we as British citizens hold the SNP to account for its failure in letting down all the British people across these islands, because it is not just in Scotland that the failure is felt. As a Unionist, I can say passionately that I feel that failure across the whole of the United Kingdom. It is absolutely unacceptable to be silent when we see Scottish people being so ill served by such a failed Administration.
Let me come back to the Public Order Act—[Interruption.] To great cheers from the SNP Benches. The Act was passed and then saw one of the greatest moments of assembly in London that we have seen in many years. Many people protested peacefully. Many people said “Not my King”, although constitutionally that is an odd statement in a monarchy. Many people were able to express their views peacefully and freely. That does not really parallel to any of the countries that the hon. Member for Edinburgh East (Tommy Sheppard) cited, but it points to the extraordinary liberty that our officers of the law have managed to secure our great nation. It points to the absurdity of this debate.
Brendan O'Hara (Argyll and Bute) (SNP)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
A Division was called, but no Members being appointed Tellers for the Noes, the
Speaker declared that the Ayes had it.
Main Question accordingly put.
Anne McLaughlin
On a point of order, Mr Deputy Speaker. A few moments ago, the Minister claimed that the former Justice Secretary, Keith Brown MSP, had welcomed the Public Order Act. Well, I have just spoken to the former Justice Secretary, who is a much-loved and well-respected member of the Scottish National party, contrary to the nonsense uttered by the Minister.
Keith Brown tells me that, although the SNP supported a little element of the Act, he, the Scottish Government and the Scottish Parliament otherwise opposed the Act in its entirety. Will the Minister correct the record?
Mr Deputy Speaker (Sir Roger Gale)
The hon. Lady will appreciate that all Members are responsible for their own statements, and that that is not a matter for the Chair. She has, however, placed her point on the record.
Business without Debate
Houses in Multiple Occupation: Approval
(11 months, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Darren Henry (Broxtowe) (Con)
Thank you, Mr Deputy Speaker, for calling me to introduce this debate on the effect of houses in multiple occupation on communities, specifically Beeston in my constituency of Broxtowe.
HMOs, also known as shared houses, are properties that are rented out to multiple tenants who share communal facilities such as kitchens and bathrooms. Although HMOs provide a flexible and affordable housing option for many people, they can also have a significant impact on the feel and look of communities.
Beeston is the largest town in Broxtowe and sits just south-west of Nottingham. It has become a very multicultural town, which has brought new arts and cultures to the area. Beeston also has a long history of being a family-focused town. A local business owner who has lived in the town their whole life says Beeston
“was a town where everyone knew their neighbours and it held community at its heart.”
My constituent Pauline recently wrote to me to say that she felt as if Beeston had lost its identity, which is a feeling that I know is shared by many within the community. This is partly due to the location of Beeston, which hugs the campus of the University of Nottingham. Owing to this, Beeston has become home to a significant student population.
I make it clear that the student population has had an incredibly positive impact on Beeston. Features such as the new cinema complex and accompanying restaurants, including a delicious dessert bar, Rassam’s Creamery, might not be in Beeston without the student population. They bring revenue to local businesses, as well as support to our night-time economy. It is important that when looking at HMO regulations, we do not make houses unaffordable to students. However, a balance must be struck between the student population and local residents, who are often losing out on resources and facilities in order for further HMOs to be created. That is not fair on those families who have resided in Beeston, often for generations.
One of the most significant effects of HMOs is their impact on the availability and affordability of housing for families and individuals. In areas where HMOs are prevalent, such as Beeston, there can be a shortage of family homes and rental properties, leading to higher rents and a lack of available housing for those in need. I received an email today from Alistair, a resident in Beeston, about many young families being priced out of Beeston because of landlords quickly securing properties to be used as student housing. He stated that it is causing Beeston to lose the lively vibe it has become known for. It is incredibly important that families who have lived in Beeston for many years, and even new families wanting to relocate, do not find themselves priced out of the area.
The concentration of HMOs in certain areas can lead to a transient population, with tenants coming and going quickly, resulting in a lack of stability and the sense of local community cohesion being broken. Further havoc can be caused when our communities of HMOs are not given thorough consideration before final approval. Recently, a construction company damaged a water main in Beeston while constructing a new HMO, leading to many houses being uninhabitable. Many groups and individuals in the community rallied around to assist the constituents there, and I would like to give a special thanks to those at Christ church in Chilwell for the help they gave. However, many families have been left without answers and indicate to me that no one, as of yet, has been held to account. I have written to the Secretary of State about that specific issue and await a response.
Another impact of HMOs is the strain that they can place on local infrastructure, such as waste management, parking and transportation.
Scott Benton (Blackpool South) (Ind)
HMOs are a significant concern in my constituency. For decades, we have seen former bed and breakfasts and hotels converted into HMOs, which means that an estimated 23,000 people across the town are now living in them. Time and again, residents speak to me about the problems that those HMOs sometimes create, such as the imbalance in communities or antisocial behaviour, an issue that is at the forefront of my inbox. Blackpool Council has introduced an article 4 direction to ensure that landlords keep on top of those antisocial behaviour issues and that the issue of absentee landlords is addressed. My main concern is my local authority’s ability to ensure that those regulations are followed through and people are held to account. Does my hon. Friend share my concern to ensure that when a local authority has those powers within the licensing system it should use them and hold landlords to account?
Darren Henry
I thank the hon. Gentleman for his intervention, as I completely agree with what he has to say. We need to be careful to ensure that local authorities can stop the proliferation of these HMOs if they negatively impact the communities they are supposed to serve.
HMOs create an increase in demand for services and facilities that were not designed to accommodate the larger number of people living in a single property. That can lead to an increase in litter, noise pollution and overcrowding on public transportation, as we have seen in Beeston. In essence, we must strike a balance between having HMOs and not losing our sense of community.
Sara Britcliffe (Hyndburn) (Con)
I thank my hon. Friend for bringing this issue before the House. We have a problem with it across Hyndburn and Haslingden, and I have raised it with the Department on numerous occasions to seek clarification on the planning law relating to HMOs. During the pandemic, companies bought up properties in low-value areas, which went unnoticed at that time, when all the systems were strained. That is one issue we are now dealing with because of what happened during the pandemic. Does he agree that one thing we need to maintain is a fair spread across the country, because the problem we see in east Lancashire, and Lancashire as a whole, is a build-up in certain towns and villages?
Darren Henry
I thank the hon. Lady for her question and, yes, I do agree with her. We certainly need local authorities to make sure that housing and HMOs are built in a fair way in keeping with the feel of the communities that they serve.
Broxtowe Borough Council introduced an article 4 direction in Beeston to slow the change taking place in the community. Prior to article 4, Beeston had been experiencing a rapid increase in the number of HMOs. HMOs are an important part of our housing mix in Broxtowe, but a sense of community cohesion can be lost when an area has an over-concentration of a single type of dwelling. This can include people not knowing their neighbours because of a constant turnover of occupiers, which, again, leads to that sense of a lack of community. It was therefore decided that the council needed the power to evaluate proposed conversions of dwelling houses into HMOs and the effect that those conversions would have on the local community. On the completion of a consultation, the boundaries for the protected area were drawn up, which covered large parts of Beeston and Beeston Rylands.
Although the initiative was well-meaning, it has failed in places to address the problem and that has had unintended consequences. As article 4 was not applied retrospectively to either the location of HMOs or their registration, vast amounts remain undetected by the council, leading to the possibility of conversions being allowed next to existing HMOs of which the council are not aware. On the introduction of article 4, landlords were required to sign only an affidavit stating that the house had previously been an HMO, thus allowing them to navigate around the article 4 planning permission even if not true. Fortunately, the council is now requiring proof of previous HMO status.
Due to the long period that it took for article 4 to be finally approved, developers had plenty of time to take advantage of the lack of restrictions, with only the warning that regulation was on its way. Many feel that irreversible change to Beeston’s community has indeed already taken place, rendering article 4 a moot point.
The other consequence is that developers are now looking further afield for new HMOs outside of the article 4 area, putting at risk the communities of other areas, including Chilwell, Attenborough, Trowell and Bramcote. This must be addressed, and we must look at planning regulation to ensure that the individual identities of these places are not compromised.
Small towns are being impacted by these decisions. HMOs are changing the nature of our communities. It would be unfair to say that all HMOs are having a negative impact and I would like to reiterate that our student population—[Interruption.]
Mr Deputy Speaker (Sir Roger Gale)
Order. I am sorry to have to interrupt the hon. Gentleman. Those on the Opposition Front Bench know the rules relating to the use of electronic devices in the Chamber. There is plenty of space outside the Chamber to do what the hon. Ladies are doing.
Darren Henry
I wish to reiterate that our student population has had, in my view, an overall positive impact in Beeston. Each HMO must be decided on by considering the street, town, neighbours, and sense of community. It is imperative that planning officers take into account the needs of local permanent residents while making plans for developments. There is a need for planning rules to be revised to ensure that HMOs are being approved by the local community for the local community. Will the Minister lay out for me today what the Government are doing to address the rising number of HMOs, and the impact that those HMOs are having on communities?
The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)
What a pleasure it is to see you in your place, Mr Deputy Speaker. I commend my hon. Friend the Member for Broxtowe (Darren Henry) for securing this important debate. It is also a pleasure to see my hon. Friends the Members for Blackpool South (Scott Benton) and for Hyndburn (Sara Britcliffe) in their places, representing their communities.
I hope my hon. Friend the Member for Broxtowe will appreciate that, due to my role within the planning system, I am not in a position to comment in detail on the merits of any specific planning applications or appeals. However, I hope he will find my explanation of what the Government are doing to put communities at the heart of decisions, and to tackle the impacts of HMOs on his community, helpful.
My hon. Friend is right to say that HMOs provide relatively low-cost accommodation for rent and can play an important part in the housing market. However, he also rightly highlights some concerns about what the concentration of HMOs can bring, particularly in residential areas, and how they can require control due to those impacts on local areas.
HMOs are required to meet certain standards and are subject to management regulations. Those regulations impose duties on managers of HMOs, including the duty to take safety measures, to supply and maintain gas and electricity and to have them tested, and to maintain common parts, fixtures and fittings. All local authorities are required to license HMOs with five or more people from two or more households when they share facilities such as a kitchen or a bathroom.
Through additional licensing, local authorities also have the power to require HMOs to be licensed when there are three or more unrelated people from two or more households sharing facilities. Local authorities also have strong powers to regulate standards in HMOs, including HMO licensing, penalties of up to £30,000 for breaches of the law, rent repayment orders and, for the worst offenders, banning orders.
My hon. Friend mentioned the role of the planning system. For smaller HMOs, national permitted development rights allow smaller homes to change to an HMO for up to six people without the need for a planning application. However, as he has highlighted in his area, local authorities can remove these rights by making an article 4 direction.
That power enables local authorities to protect important local areas where permitted development rights would have an adverse impact. Local authorities are required by law to publish a copy of the direction and to consult the community. The local planning authority then has a responsibility to decide whether to confirm the direction, taking into account any representations made during the consultation period by my hon. Friend’s constituents. The direction does not prevent development, but means that development cannot be carried out under the permitted development right; instead, it needs an application for planning permission, which means the local authority must consider the proposal in more detail.
Sara Britcliffe
I went back and forth with my local planning department on that question, because it did not understand the regulation properly—we are seeing HMOs grow rapidly in some areas, so it is quite new to people. Is there a case for my hon. Friend’s Department to write to authorities so that they know what powers they have when that becomes an issue in their own area?
Rachel Maclean
I thank my hon. Friend for sharing her experience. She will appreciate that I am not able to comment on a specific planning determination in her area, but she is right to highlight that local authorities do have those powers, and they are responsible for informing themselves and using the powers responsibly. I am happy to discuss with her outside this Chamber what further action we can take to assist her community.
I also heard my hon. Friend the Member for Broxtowe comment that, in his particular situation, he felt the article 4 direction was not having the effect it should. I have heard his concerns and I am happy to meet him, but I cannot stray into the territory of commenting on a particular planning determination, which is rightly not a matter for us to debate in this Chamber.
I will just say a couple of words about the planning application process. My hon. Friend did an excellent job of setting out the impact that HMOs have on a community that has long-established roots. I agree with him, of course, that students offer a huge amount of benefit to a local area, bringing income and bringing vibrancy, but that changes the character of an area, and in policy terms it is a question of balance and ensuring that everybody who lives in a community feels heard and represented.
Communities play a key role in the planning system. Local people need to believe that being involved is worthwhile to ensure that development is brought forward in a way that works best for them. Planning law requires local planning authorities to undertake a formal period of consultation for a period of no less than 21 days prior to deciding a planning application.
Mr Jonathan Lord (Woking) (Con)
May I very briefly bring to the Minister’s attention a case involving a semi-rural area with just six to eight houses? All of a sudden, one those houses became what was traditionally known as a halfway house—meaning a house for ex-offenders. There are more than six people there, and no licence was applied for. Surely that should not happen. The police have been called on many occasions because it appears that violent offenders are being housed there, causing great worry to the families in the surrounding six or eight houses. Surely a licence must be in place before somewhere becomes a halfway house.
Rachel Maclean
I thank my hon. Friend for bringing his residents’ concerns to the Floor of the House. Of course, he will appreciate that I am not able to comment on the specific circumstances surrounding that particular case, but I am more than happy to meet him outside the Chamber and look into the details of that.
I want to make the planning process clear to my hon. Friends. It is absolutely right that local residents are able to raise concerns in the process, and that those are taken into account, but every planning application is judged on its individual merits, and the weight given to those considerations is a matter for the local planning authority as the decision taker.
That brings me to the concerns that my hon. Friend the Member for Broxtowe raised about conditions and their enforcement. When planning permission is granted, the local authority has powers to impose conditions. It could, for example, require an applicant to complete a construction management plan. That would require the applicant to submit details on how they will minimise the impact of construction on local residents. He raised a very concerning experience of a burst water main. Clearly, the Government expect builders to act responsibly. There may well be some things on which we can provide him with more information, so I will ask my departmental officials to write to him on that particular concern.
If a development being carried out is not in accordance with planning conditions, the Government are clear that local planning authorities have a range of planning enforcement powers that they can and should use to tackle breaches of planning control. That enforcement is at their sole discretion; it is for them to decide what, if any, enforcement action to take depending on the particular circumstances of each case.
I will touch briefly on the role of the Levelling Up and Regeneration Bill. We are bringing forward ambitious and wide-ranging reforms through that Bill, which is currently before Parliament. There are many proposals that place communities front and centre of the planning system. We will increase and enhance the opportunities for involvement to ensure that development is brought forward in a way that works best for local people.
In conclusion, I once again thank my hon. Friend the Member for Broxtowe for a useful and constructive debate, and other hon. Friends for representing their constituents in their contributions. I hope that I have clearly set out the measures we have in place to enable local authorities to control HMOs in their areas, and the steps that the Government are taking to ensure that communities continue to have their say in development that affects them.
Question put and agreed to.
Draft Strategic Highways Company (Name Change and Consequential Amendments) Regulations 2023
(11 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)
I beg to move,
That the Committee has considered the draft Strategic Highways Company (Name Change and Consequential Amendments) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Robertson. The name change was implemented in 2021, and National Highways completed a range of administrative, legal and digital changes to make it so. The draft regulations will make the consequential changes required to update the most relevant legislation to reflect the name change.
The legislation to be amended was identified by a legal analysis of all the almost 100 references in legislation to the previous name, “Highways England”. As a result, five pieces of legislation were identified for amendment via this statutory instrument as those in respect of which there was the most risk of ambiguity or confusion arising over time should the old name remain: the Appointment of a Strategic Highways Company Order 2015; the Infrastructure Act 2015 (Strategic Highways Companies) (Consequential, Transitional and Savings Provisions) Regulations 2015; the Equality Act 2010; the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017; and the Local Transport Act 2008.
Furthermore, where possible the amendments to be made will future-proof the legislation against any future name changes. We are doing this for three of the five pieces of legislation we are amending by inserting a reference to a
“strategic highways company appointed under section 1 of the Infrastructure Act 2015”
instead of inserting a potentially time-limited reference to National Highways.
To conclude, the draft regulations will make consequential changes to a small number of references to Highways England that were identified by a legal analysis as those the most at risk of leading to ambiguity or confusion over time. Where possible, the amended wording has been future-proofed. I hope Members will join me in supporting the draft regulations, and I commend them to the Committee.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairpersonship, Mr Robertson, however briefly it may be.
The Minister gave a good analysis of why we are here today and I am happy to say that we will not oppose the statutory instrument. The draft regulations will simply bring a number of pieces of legislation up to date with National Highways’ current name and prevent future confusion.
Question put and agreed to.
Draft REACH (Amendment) Regulations 2023
(11 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I beg to move,
That the Committee has considered the draft REACH (Amendment) Regulations 2023.
It is a pleasure, as ever, to have you in the Chair, Sir Graham. The draft regulations were laid before the House on 20 April and amend UK REACH, the UK regulation on the regulation, evaluation, authorisation and restriction of chemicals, which is one of the main pieces of legislation that manages chemicals in Great Britain.
In line with the European Union (Withdrawal) Act 2018, UK REACH retains both the fundamental approach and key principles of the EU REACH regulation, with its aims of ensuring a high level of protection of human health and the environment. The statutory instrument introduces two changes. I can assure the Committee from the outset that those changes do not affect the key principles and that UK REACH will continue to provide the highest levels for protection of human health and the environment.
First, the SI amends the deadlines in article 127P(4B) of UK REACH for the submission of information to the Health and Safety Executive, extending them by three years. That applies to grandfathered registrations and chemicals being imported from the EU under the transitional arrangements. Industry will have to submit technical information—that is, the full data package—on the hazards and risks of substances by 27 October 2026, 27 October 2028 and 27 October 2030, depending on the tonnage and toxicity of the chemical. Those dates are changed from 27 October 2023, 27 October 2025 and 27 October 2027 respectively. The most toxic and hazardous chemicals will be in the first tranche that will be required to be registered.
The changes are needed as part of my Department’s work to address the significant potential cost of obtaining or accessing the full hazard information required to meet UK REACH registration requirements. Those costs are estimated to be between £1.3 billion and £3.5 billion, which represents a major concern for the industry as it will be a significant financial undertaking for businesses in Great Britain transitioning to UK REACH. We recognise business concerns, which is why we are working really closely with business and engaging with all stakeholders to develop an alternative transitional registration model for UK REACH.
We are working with the industry and non-governmental organisation stakeholders to find a solution that will reduce the costs associated with obtaining hazard information while still ensuring that they are responsible for the safe use of chemicals throughout the supply chain. The model we are developing aims to reduce the need for businesses to access or obtain expensive EU REACH data packages and will place more emphasis on improving our understanding of the uses and exposures of chemicals in the Great Britain context—that is, on making it much more specific to our market and our needs. Extending the deadlines will provide certainty to industry so that it can avoid making unnecessary investments in obtaining data while the Government continue to develop and implement an alternative approach.
The second change is that the SI will move the timelines for the HSE to complete its compliance checks to ensure that the information submitted by industry is of sufficient quality. The changes will now align with the extended deadlines for submitting data to the HSE. That is necessary because the deadlines for compliance checking, as set down in article 41(5) of UK REACH, would otherwise fall before the amended dates for submitting the relevant information. Basically, it just links everything together.
The HSE will now have to complete its compliance checks by 27 October 2027, 27 October 2030 and 27 October 2035, corresponding to the three extended submission deadlines. This is the first time we have prepared an SI using the powers to amend REACH that are set out in schedule 21 to the Environment Act 2021. Some colleagues present served on the Bill Committee for that Act and will I am sure remember that.
We have followed all the safeguards that we attached to the powers. In doing so, we sought and obtained consent from the devolved Administrations of Wales and Scotland; consulted widely with our stakeholders and interested parties on our plans to extend the submission deadlines; and published a consistency statement, as required by the 2021 Act. Our aim was to provide the Committee with the necessary assurance that extending the submission deadlines is consistent with article 1 of UK REACH. We will continue to ensure a high level of protection of human health and the environment.
James Gray (North Wiltshire) (Con)
Am I right in thinking that the redesign of the registration process that my hon. Friend is currently considering, which the three-year extension will allow her to bring into play, will not diminish the levels of care for the environment or, indeed, for human health, but rather enhance them, and that the whole purpose of the redesign is to do that?
Rebecca Pow
My hon. Friend is very astute. In no way will we reduce any of the protections—we have to make a statement to say that we will not do that—and this change does give us an opportunity to work with the industry to look at the kind of data it provides and its knowledge of the chemicals, as well as to focus on how we use those chemicals and the actual exposure for our own population, because it is different in different countries. It should provide us with a really focused understanding and knowledge of the chemicals that we place on the market—of course, each company is responsible for the chemicals it places on the market.
As I said, we laid the statement, as required by the Act, to provide the Committee with the necessary assurance that extending the submission deadlines is consistent with article 1 of UK REACH. We will continue to ensure a high level of protection of human health and the environment.
As we outlined in the consistency statement that accompanied the public consultation, our assessment demonstrates that overall the UK REACH regime will still be able to ensure a high level of protection of human health and the environment because of the information on and knowledge of chemicals registered under EU REACH that is available to HSE and Great Britain registrants; because importers from the EU will continue to receive EU REACH-compliant safety data sheets from their EU suppliers, which will enable them to identify and apply appropriate risk-management measures; and because of the HSE’s ability to seek risk management data from other sources—there are sources other than the EU system—if necessary, as it did when acting as a competent authority under EU REACH. That seeking could include things such as calls for evidence and using data from EU REACH and other relevant sources that can provide Great Britain with specific hazard and exposure information.
Alongside the public consultation, we also published a full impact assessment on extending the deadlines, which I am pleased to say was awarded a green fit-for-purpose rating by the Regulatory Policy Committee. The Joint Committee on Statutory Instruments has formally considered this SI without comment. The territorial extent of this instrument is the United Kingdom, and the devolved Administrations were engaged in its development and are content. I am confident that the provisions in the regulations mean that we will continue to ensure the highest levels of protection for human health and the environment.
Sir Oliver Heald (North East Hertfordshire) (Con)
As my hon. Friend will know, I have the headquarters of Johnson Matthey, a major environmental business, in my constituency. Is it not right that the instrument will give duty holders the right amount of time to prepare and submit full dossiers for all the substances that need to be registered, and will therefore have a positive effect in terms of better regulation?
Rebecca Pow
I thank my right hon. and learned Friend for that. It is a really significant industry in his constituency, and he is right to speak up for it. I am sure that he has engaged with industry, as we have, because we have to make this work. It is a huge industry for Great Britain—a £30.4 billion industry. The industry has worked with us, and was very positive in the consultation about wanting the extension of the deadlines. We are already working with various key companies to work up some dossiers with individual companies to see how it could work. We will learn a lot from that, and we obviously need this time to work our way through that and see all the different impacts and costs, what sort of information they need to provide, and how they are managing to do that. My right hon. and learned Friend is right, and I thank him for that question.
I am confident that the provisions in the draft regulations mean that we will continue to ensure the highest levels of protection of human health and the environment based on robust evidence and strong scientific analysis. At the same time, we are taking steps to provide industry with the legal certainty that it needs to operate and to preserve the supply chains for the chemicals that we depend on. I will leave it there for now.
Ruth Jones (Newport West) (Lab)
It is a pleasure to serve under your chairship, Sir Graham. I am delighted to say a few words about chemicals and chemicals regulation as we consider the draft regulations before the Committee. It is important to say from the outset that we will not oppose the SI, but before everyone heads for the hills there are some important points that we need to raise and questions that need to be answered.
The SI pushes back the existing deadlines for the registration of data by three years, all dependent on the tonnage and hazard profile of the relevant substance. The earliest deadline is for substances imported or produced at the highest tonnage band per year—that would be 1,000 tonnes or more—or indeed those that fall into certain hazard categories, such as carcinogens. The SI also extends the deadline for the UK regulator, the HSE, to complete compliance checks for 20% of registrations in line with the new deadlines, as the Minister has outlined.
We acknowledge that in many ways this is a technical instrument, but there is a wider point about chemicals regulation in the UK, and we need to take a moment to look at what the SI means for it. The SI is well overdue, as is a debate on chemicals regulation. I will take the Minister briefly through my concerns, and those of campaigners and stakeholders such as CHEM Trust. I pay tribute to Chloe Alexander and all her colleagues for the brilliant work that they do to keep these matters at the top of our agenda.
This is the second time that the Minister’s Department has pushed back deadlines for companies to submit safety data on substances also registered in EU REACH. The first delay was due to the REACH Etc. (Amendment Etc.) (EU Exit) Regulations 2020, which extended the deadline from 31 December 2022 to the current staggered deadlines of October 2023, 2025 and 2027, as we have heard. Like the 2020 Regulations, today’s statutory instrument has been drawn to the special attention of the House by the Secondary Legislation Scrutiny Committee, which raised concerns about the deliverability of the new model within current timeframes. There were also important concerns from experts and our partners in relevant NGOs about a potential weakening of protections of human health and the environment, and the HSE’s capacity to carry out its regulatory function in this area. It would be really helpful if the Minister would address those concerns specifically and share with the Committee what she plans to do about them.
Secondly, the Opposition understand the reasons for a further delay, which responds to industry concerns about the cost and practicability of providing the data within the current timeframe, and to allow time to develop an alternative transitional registration model. However, there is uncertainty about the alternative transitional registration model under development and its viability. The vital principle of “no data, no market”, which lies at the heart of good chemicals regulation, continues to get kicked down the road, increasing the risk of unsafe or inadequately assessed chemicals on the market. Does the Minister share my concern that that may provide not only less protection and fewer improvements—which are in the pipeline at the EU level—but less protection than the model it replaces? While we rightly honoured the vote of the British people, Ministers must make Brexit work and, as the SI makes clear, on REACH and chemicals they are missing in action at present.
The impacts on human health and the environment from this delay have not been effectively mitigated. That could be done by adopting risk management decisions during the transition period. Those mitigations would have maintained access to the full data and provided an ability to evaluate the risks properly. Why did we not do that? What discussions has the Minister had with our colleagues in Europe on that?
Another concern on these Benches is the fact that the United Kingdom is already falling behind and diverging from EU protections of hazardous chemicals, due to a lack of data and resources in the UK system. REACH worked and kept us safe, and even now, several years after the British people voted to leave the EU, we still have no plan to match the scale and pace of proper and thorough chemical regulation.
It is clear to me and many campaigners that measures are needed to minimise divergence and close the protective gap to avoid the dumping of products on the UK market that no longer meet the higher EU standards. Thanks to this Government, our waterways and town centres face a waste crisis, but we cannot have a chemical waste crisis too. I would like the Minister to explain in detail what steps she has taken to ensure that the UK does not become a dumping ground. That is very important, and I hope that she will give it some time in her response.
Reviews have been conducted by the National Audit Office and the Public Accounts Committee of this House. Both reviews found that a lack of operational capacity and loss of data is having a negative impact on HSE’s ability to assess risks and carry out its work. I am increasingly concerned about regulatory capacity, as UK REACH is selecting fewer substances for control than the EU, which is resulting in the UK falling behind EU protections for the environment and human health. This is not just about our membership of the EU or trying to fight old battles; it is about protecting the health and wellbeing of our people right across the UK.
The lack of capacity in the UK system—of staff as well as data— to match the scale and pace of EU REACH is resulting in the UK considering fewer and weaker protections against harmful chemicals, and at a slower pace. That may be exacerbated by an ideological interest in less or more light-touch regulation, as well as the UK exercising its new ability to take a different or distinct approach because it can—simply put, divergence for the sake of it. That may seem like smart politics, but it is not, because the UK falling behind those protections will have a real impact on the lives of people across the UK.
So far, UK REACH has initiated just two restrictions, which are not yet in force, on hazardous substances since the UK exited the EU, compared with six adopted in the EU and another 20 that have been initiated. Furthermore, the EU restrictions road map, which targets groups of widely used chemicals of key concern, such as bisphenols and flame retardants, would, if fully implemented, lead to an estimated 5,000 to 7,000 chemicals being banned by 2030. Is the Minister happy with that disparity between the EU and the UK?
I will touch briefly on the decision not to match EU classifications to better identify endocrine disruptors unless and until they are agreed at an international level. That important decision was only recently confirmed in answers to my hon. Friend the Member for Swansea West (Geraint Davies). It was taken without consultation or an announcement. I gently say to the Minister that measures to improve identification are vital if we are to reduce the impact of endocrine disruptors on our health and environment.
Can the Minister tell the Committee how many hazardous chemicals have been added to the substances of very high concern list since January 2020? In response to questions about the SI, the Department said that it was building up its regulatory capacity. Alas, it has still not responded to an important question about whether its prioritisation of fewer controls on harmful substances is a short-term measure until it reaches capacity, and about the steps that the Department will take to prevent dumping of products on the UK market that no longer meet the highest regulatory standards.
The Government repeatedly promised that protections would be maintained and that we were unlikely to diverge very much, and not for the sake of it. They even said that they would provide a better system, so we await the answer with excitement. The role of the Opposition is to keep Ministers on their toes and hold them to account, so I hope that hon. Members agree that that has been done today.
Rebecca Pow
I thank all right hon. and hon. Members who have contributed to the debate. First, I welcome the shadow Minister’s support for this SI, although she has given me a raft of questions. If I do not answer them all, we will respond in writing, if that is suitable. However, I will cover as many as I can.
I want to reiterate why we are doing this. It is necessary for extending the deadlines for UK REACH submissions while we make the much-needed changes to the existing transitional requirements for submitting the HSE information. Without the changes, businesses would be forced to expend resources obtaining information and compiling documents, meaning that they could actually waste money. At the end of the day, they will not need to have all this information when we come up with the full model, working with them. It is, therefore, essential that we extend the deadlines before October 2023, which is when the first deadline would have fallen. All of that has been done in discussion with industry, and the consultation took place. Although the shadow Minister has some concerns, many of which came through CHEM Trust, we have discussed a lot of the issues with industry and that is why we have come up with these dates, which, as we have already heard, are satisfactory for our industry.
I reiterate that our endeavour is to keep all protections in place for the environment and human health, as per article 1 of UK REACH, as noted in our consistency statement, and to come up with a much more bespoke approach to the way in which we handle chemicals. The hon. Member for Newport West might be interested to know that the new model takes a two-pronged approach, working with companies and testing how it will work, hence the dossiers looking at cost, meeting the regulations and managing the risks. We are also looking at how we can improve the information to really deal with the issue of exposure to chemicals. That is where we could have a more bespoke system, and the Department for Environment, Food and Rural Affairs is working on that alternative model with industry, NGOs, the European Environment Agency and HSE. I reiterate that that is the purpose and it is well under way.
There was some criticism that things may not be working fast enough, or not at all. However, we have already received notification for around 20,000 chemical substances. The UK did, of course, ask for data sharing as part of the EU-UK arrangements, but the EU refused to engage. It could change its position and open up discussions again, but that is the position now.
Ruth Jones
To be fair to the EU, I understand that it took its ball and went home with it, but we were not going to pay and we were not going to play by its rules, so that is probably why it did that. On divergence, I am concerned that it is progressing but we do not seem to have a plan in place. Could the Minister address that?
Rebecca Pow
I honestly do not believe that there is cause for concern. There might be divergence in terms of flexibility or decisions that might be made at slightly different times. She mentioned various substances. That is more a matter of timing and of when the announcements are made, but there will not be any divergence in the fundamental principles and guarantees that safety and protection of the environment and human health is paramount. That still stands and it will not change.
NGO stakeholders have also raised this issue and said that they want divergence to be kept to a minimum. The EU is also seeking to improve the quality of its information on use and exposure, so our work on the alternative model could serve to reduce the scope of the new divergence. Having our own independent regulatory framework for chemicals allows us to identify the most pressing priorities that best reflect our circumstances in GB. The decisions we take are based on the best available evidence, including looking at approaches taken by chemical regimes across the world, including the EU. The Health and Safety Executive already looks at other sources and will continue to do so, as I think I said in my opening speech.
The shadow Minister asked about the capacity of HSE. Its capacity is increasing all the time. The NAO’s report from May 2022 shows that it increased staffing in its chemicals regulation division by 46% between September 2020 and March 2022. It continues to build on that capacity. In the long term, by 2025 the number of HSE staff working on UK REACH delivery is expected to grow to 50, and the number is around 60 or 70 if we consider the wider support functions. Members might be interested if I break that down. There are currently about 15 toxicologists, with six established and nine promoted or early career scientists. In addition, HSE can call on REACH independent scientific experts—the pool members—and the expert scientists on a whole range of different committees, as well as the eco-toxicologists who work for the Environment Agency, to support its work. I hope that makes very clear that the capacity of HSE has been ramped up, and that it is working alongside the new requirements to get the system absolutely right.
To go back to chemicals and restrictions, a suggestion was made that potentially it is not safe here and we are not banning chemicals that have been banned elsewhere. That is categorically not the case. Work is well under way to address risky chemicals. Upcoming decisions include restrictions on lead in ammunition and on toxic substances in tattoo inks and permanent make-up. I do not know if you have a tattoo, Sir Graham.
The Vice-Chamberlain of His Majesty’s Household (Jo Churchill)
We will never know!
Rebecca Pow
In April, HSE and the EA published a regulatory management options analysis on PFAS, or “forever chemicals”, and they will be considering the recommendations for restrictions on other regulatory measures. And we are banning PFAS in firefighting foams. I think the hon. Member for Newport West mentioned that, but that is one thing that we have announced. Under the UK REACH work programme, we will be working our way through a whole range of restrictions, obviously with all of the right evidence to inform decisions made.
Ruth Jones
I asked how many hazardous chemicals have been added to the register since 2020. I have since been told that the answer is zero. People in the industry will be concerned to know that no additional chemicals have been added since 2020.
Rebecca Pow
I am afraid that this is so complicated that, to correct the answer on what the hon. Lady is specifically referring to, I will write to her. Without a shadow of a doubt, we are banning PFAS in fire- fighting foams, and HSE is now scrutinising authorisation applications for a chemical called nonylphenol, which cannot now be used unless a company can justify its use and HSE agrees. That is the way we work through all chemicals. There is a really strict protocol on working our way through these proposed bans and looking at all the evidence.
I reassure the hon. Lady that we will be developing a chemical strategy, pulling all of these things together and setting out a really clear vision for chemical management in the UK, as well as a set of principles to guide policy development and the regulatory decision making that comes with it, providing certainty to key stakeholders, the industry and our direction of travel. The intention is for the strategy to be UK-wide and cross-Government. She will hear more about that in due course.
I will wind up now. I hope I have answered the plethora of questions and given assurances as to why we need this really important SI. We have made these changes to UK REACH without any impact on the high levels of human health and environmental protections, as demonstrated by the consistency statement and the impact assessments that accompanied the public consultation that came with the statutory instrument. On that note, I commend the draft regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft REACH (Amendment) Regulations 2023.
Finance (No. 2) Bill (First sitting)
Tuesday 16th May 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Finance (No. 2) Act 2023 View all Finance (No. 2) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 May 2023 - (16 May 2023)
The Chair
We are now sitting in public and the proceedings are being broadcast. I have a couple of preliminary announcements. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Jackets may be removed.
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication. I call the Minister to move the programme motion standing in her name, which was discussed yesterday by the Programming Sub-Committee.
Motion made and Question proposed,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 16 May 2023) meet—
(a) at 2.00 pm on Tuesday 16 May 2023;
(b) at 11.30 am and 2.00 pm on Thursday 18 May 2023;
(c) at 9.25 am and 2.00 pm on Tuesday 23 May 2023;
2. the proceedings shall be taken in the following order: Clauses 1 to 4; Clauses 16 and 17; Clause 26; Clauses 28 and 29; Schedule 2; Clauses 30 to 34; Schedule 3; Clause 35; Schedule 4; Clauses 36 and 37; Schedule 5; Clauses 38 to 44; Schedule 6; Clauses 45 and 46; Clause 49; Clauses 61 to 105; Schedule 10; Clauses 106 to 108; Schedule 11; Clauses 109 to 112; Schedule 12; Clauses 113 and 114; Schedule 13; Clauses 115 to 120; Clauses 313 to 315; Schedules 19 and 20; Clauses 316 to 320; Schedule 21; Clauses 321 to 324; Schedule 22; Clauses 325 to 331; Schedule 23; Clauses 332 to 345; Schedule 24; Clauses 346 to 352; new Clauses; new Schedules; remaining proceedings on the Bill;
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 23 May 2023.—(Victoria Atkins.)
Kirsty Blackman (Aberdeen North) (SNP)
I will make a brief comment in relation to the programme motion. It is the convention of the House that a Finance Bill does not take oral evidence. That continues to be a significant issue for the knowledge of the Committee. Written evidence is very important, and everybody does their best to read it, but nothing quite compares to asking questions in an oral evidence session. The programme motion does not allow for oral evidence. The Government have made it clear on previous Finance Bills in previous years that that is because part of a Finance Bill is considered by the whole House and the rest is considered in Committee.
Given the extent of this Finance Bill and how incredibly complex it is, particularly when it comes to corporation tax, it would have been beneficial for the Committee to ask questions of experts. It would not have taken us past any potential dates. We could have scheduled an oral evidence session with, for example, the Association of Taxation Technicians and the Chartered Institute of Taxation, and taken evidence on the parts of the Bill that we are yet to consider in order to better understand what is in the Bill and the issues that it presents for professionals.
Although I will not oppose the Programming Sub-Committee’s recommendations in the programme motion, I raise my concerns, as I do for every Finance Bill Committee on which I sit, that oral evidence sessions would have made a positive difference. They would not have held up the machinery of government and the progress of the Bill, but they would have allowed us to make more informed decisions.
Dame Angela Eagle (Wallasey) (Lab)
It is a great pleasure to serve under your chairmanship, Ms McVey, I think for the first time. I have a great deal of sympathy with what hon. Member for Aberdeen North has just said, and I look forward to what the Minister has to say about it. It may well be that an innovation that has worked well in other Committees should spread to the Finance Bill. In the absence of any progress on that, I refer the hon. Member for Aberdeen North to the work of the Treasury Committee, of which I am a member, alongside one of her colleagues. We do extensive work pre and post Budgets and take a great deal of evidence. While it is not the same as having oral evidence to this Public Bill Committee, it is a pretty good alternative, and at the moment it is all we have.
The Financial Secretary to the Treasury (Victoria Atkins)
May I say what a pleasure it is to serve under your chairmanship, Ms McVey? I am delighted if this is the first Finance Bill over which you are presiding. I should declare that I used to prosecute tax fraudsters for His Majesty’s Revenue and Customs, but I have not done so since being elected to this place. I ought also, while we are in housekeeping mode, welcome all Committee members to this scrutiny. It is an important part of our legislation-making process. Particular thanks go to my hon. Friend the Member for Totnes who—I hope he will not mind my sharing—got married at the weekend and so is perhaps the first parliamentarian to spend his honeymoon in a Finance Bill Committee. My sincere apologies to Mrs Mangnall.
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated to Members by email.
We now begin line-by-line consideration of the Bill. The selection list shows how the clauses and the selected amendments have been grouped together for debate. Clauses and amendments grouped together are generally on the same or similar issues.
Clause 1
Income tax charge for tax year 2023-24
Question proposed, That the clause stand part of the Bill.
Victoria Atkins
Clause 1 legislates the charge for income tax for 2023-24. Clauses 2 and 3 set the main, default and savings rates of income tax for 2023-24 and clause 4 maintains the starting rate for savings nil rate band for tax year 2023-24.
Before I get into the meat of these clauses, it might help to remind hon. Members that, as I have already said, because some measures in the Bill have already been debated on the Floor of the House, many measures will not be debated here in this Public Bill Committee. There is no mystery as to why some clauses are not appearing.
Income tax is one of the most important revenue streams for the Government, expected to raise approximately £268 billion in 2023-24. These clauses are legislated annually in the Finance Bill. Clause 1 is essential; it allows for income tax to be collected in order to fund the vital public services on which we all rely. Clause 2 ensures that the main rates of income tax for England and Northern Ireland continue at 20% for the basic rate, 40% for the higher rate and 45% for the additional rate.
Clause 3 sets the default and savings rates of income tax for the whole of the UK. The starting rate in clause 4 applies to the taxable savings income of individuals with low earned incomes of less than £17,570, allowing them to benefit from up to £5,000 of savings income free of tax. Clause 4 will maintain the starting rate limit at its current level of £5,000 for 2023-24, in order to ensure simplicity and fairness within the tax system while maintaining a generous tax relief. Clauses 3 and 4 are important pillars of the Government’s savings strategy, because we wish to help those with low earned income to save.
In addition to the starting rate whereby eligible individuals can earn up to £5,000 in savings income free of tax, savers are supported by the personal savings allowance, which provides up to £1,000 of tax-free savings income for basic rate taxpayers. Savers can also continue to benefit from the annual ISA allowance of £20,000. Taken together, those generous measures result in around 95% of savers paying no tax on their savings income.
Finally, the Government’s efforts to encourage those on the lowest incomes to save include the Help to Save scheme, which provides savers with a 50% bonus on their savings. The Government have recently extended the scheme while we consult on longer-term options to continue to support low-income savers, which is a good example of our commitment to levelling up opportunity across the whole country. I hope that Committee members feel able to promote the scheme to their constituents, and I encourage them to do so. We are committed to helping people of all incomes, at all stages of life, to save. Recent reforms, coupled with the significant increase to the starting rate limit in 2015, mean that the taxation arrangements for savings income are very generous.
James Murray (Ealing North) (Lab/Co-op)
It is a pleasure to serve on this Committee with you as Chair, Ms McVey. As we heard from the Minister, clause 1 imposes a charge to income tax for 2023-24. It is a formality in every Finance Bill, which provides the legal basis for Parliament to impose an annual income tax. Of course, we will not oppose that clause. Clause 2 provides the main rates of income tax for 2023-24, which will apply to the non-savings, non-dividend income of taxpayers in England and Northern Ireland. As the Minister said, the rates include the 20% basic rate, the 40% higher rate and the 45% additional rate.
With respect to the other nations of the UK, the explanatory notes make it clear that income tax rates on non-savings, non-dividend income for Welsh taxpayers are set by the Welsh Parliament. The UK main rates of income tax are reduced for Welsh taxpayers by 10p in the pound on that income. The Welsh Parliament sets the Welsh rates of income tax, which are then added to the reduced UK rates. Income tax rates and thresholds on non-savings, non-dividend income for Scottish taxpayers are set by the Scottish Parliament. We do not oppose clause 2. However, the income tax rates within it will interact with the level of personal allowance and relevant thresholds to determine how much income tax people pay. I will briefly ask the Minister about them.
Committee members will remember that in the March 2021 Budget, and in the Finance Act that followed, the then Chancellor—now Prime Minister—froze the basic rate limit and personal allowance for income tax for four years. In the recent autumn statement 2022, and in the following Finance Act, the current Chancellor extended those freezes by a further two years. That means that the current 2023-24 tax year is the second of a six-year freeze. The Office for Budget Responsibility has made clear, in its March 2023 economic and fiscal outlook, that the Government’s six-year freeze in the personal allowance will take its real value in 2027-28 back down to the level in 2013-14. When the Minister responds, I would be grateful if she could confirm whether she accepts that conclusion from the Office for Budget Responsibility.
As we have heard, clause 3 sets the default rates and saving rates of income tax for the year 2023-24. Clause 3 specifically sets the default rates that will apply to the non-savings, non-dividend income of taxpayers who are not subject to the main rates of income tax, Welsh rates of income tax or Scottish income tax. It also sets the savings rates that will apply to savings income of all UK taxpayers. We will not be opposing the measure.
Finally, clause 4 sets the starting rate limit for savings for 2023-24, which remains at £5,000, as we heard. As we know, the starting rate for savings can apply to an individual’s taxable savings income, which includes—but is not limited to—interest on deposits with banks or building societies. The extent to which an individual’s savings income is liable to tax at the starting rate for savings, rather than the basic rate of income tax, depends on their total non-savings income, which can include income from employment, profits from self-employment, pensions income, and so on.
If an individual’s non-savings income is more than their personal allowance plus the starting rate limit for savings, the starting rate is not available for that tax year. Where an individual’s non-savings income in a tax year is less than the personal allowance plus the starting rate limit, their savings income is taxable at the starting rate up to the starting rate limit. We will also not be opposing clause 4.
As I have set out, we will not be opposing any of the four clauses in this first grouping of the debate, but I look forward to the Minister’s response on my specific point about the Office for Budget Responsibility.
Dame Angela Eagle
Thank you very much, Ms McVey. I think that the comment that I made earlier about this being your first Committee was about it being your first Committee that included me, not it being your first Committee completely. I am sure that we have an extremely experienced Chair, or you would not have been put in the position of having to Chair a Bill Committee where the Bill is this thick. I think that everyone can have great confidence in your ability to take us through the proceedings today.
I want to raise some questions for the Minister about levels of income tax, so that she could perhaps talk to us about the Government’s thinking. We have here—it is not explicitly referred to in the legislation, but it is there nevertheless—the fact that the thresholds have been frozen until 2028. That effectively drags many more people into paying these rates of income tax, at whatever level. It is called “fiscal drag” in the business.
When we analyse precisely what the Government are doing, we see that, without the headline rates of income tax being affected, 8 million people will be forced to pay higher levels of income tax the threshold has been frozen. That is particularly exacerbated in an era of high inflation, when more people will get dragged into paying higher levels of income tax because prices are going up yet thresholds are frozen.
This has been estimated to be the biggest stealth tax put into place since the doubling of VAT in the early 1990s. Looking at the situation that is expected to prevail in 2027-28—on the plans that the Government are putting forward—8 million people will be affected by fiscal drag. In other words, they will have their income tax increased even though the headline rates have stayed the same. That will mean that one in five taxpayers—20%—will actually be paying the higher rate, at 40% or above, as a result of this Government’s stealth tax.
That is at a time when people’s incomes are being squeezed from all directions. Many of us know that we have a cost of living squeeze that is driving millions to food banks, having to make the choice between heating and eating, and sometimes not being able to do either satisfactorily because of the amount of cash available at the end of a working week to buy essentials.
I will demonstrate just how many people have been dragged into the higher rates of tax by the stealth tax manoeuvre that the Government have turbo-charged for the next few years. In the 1990s, no nurses at all paid the higher rate of tax, and only 5% to 6% of machinists or electricians did. The Minister might have noticed information from the Institute for Fiscal Studies on the front page of quite a lot of newspapers this morning that demonstrates that the situation has totally changed. One in four teachers and one in eight nurses will be higher-rate taxpayers by 2027—presumably, that is before their disputes have been settled one way or the other. That is bad in itself, because it is a stealth tax.
Craig Whittaker (Calder Valley) (Con)
The points that the hon. Lady makes are valid. Another valid point is this: while it is true that more people are paying tax, is it not also true that more people are earning a lot more money than they used to?
Dame Angela Eagle
I am all in favour of people earning more money, but it is important that they are doing so in in real terms. Someone can earn more money in terms that do not take account of inflation, but they can actually be earning less. If the right hon. Gentleman talked to people and asked them whether they were any better off than they had been when this series of Governments came into office in 2010, he would find that people’s nominal salaries and wages might be higher in some cases, but a lot of them are worse off in reality because those earnings have not kept up with inflation. The point about the tax burden and fiscal drag makes that much worse.
Kirsty Blackman
On the point about how well-off people feel, does the hon. Member know that in 2008, 12% of people in the UK believed that their children would be worse off than them? Now, IPSOS has found that that number is up to 41%—some 41% of people now believe that their children will be worse off than them. Does she feel that that needs to be tackled, and that the Government are not taking it seriously?
Dame Angela Eagle
I agree, and the hon. Lady makes a valuable point. For societies to advance in a sensible, healthy way, succeeding generations must have optimism about things changing for the better. That also tends to lead to happier societies with people who are more likely to innovate and go the extra mile. We all want that so that we can rebuild prosperity for our nation in the years ahead in the new, more isolated circumstances in which we find ourselves, as a result of which we must remake the economic foundations of our country. I wonder how much fiscal drag helps us to do that, and I am interested to hear the Minister’s observations on how that approach will help.
There are other undesirable effects of threshold freezes of the kind encompassed by clause 1, including very high marginal tax rates for people in particular circumstances. We know from the Prime Minister’s tax return that he effectively pays 22% on his millions of earnings every year, if one combines the income tax that he pays with the way that he takes out his money through capital gains and in other areas. However, given the present tax thresholds and fiscal drag, there are people who will face marginal tax rates of 45% and 60%, which are very high—much higher than those that the Prime Minister faces.
The Treasury Committee is so concerned about that that we have begun an inquiry into spiky marginal tax rates and cliff edges. As you will know, Ms McVey, from having been Secretary of State for Work and Pensions, cliff edges and high marginal tax rates can often combine to create even greater losses of income. That is a disincentive to work harder, get more hours and move jobs when the increased wage may not compensate for the higher marginal tax rate, or a combination of the higher marginal tax rate and the cliff edge for a particular allowance. When we took evidence a few weeks ago, we discovered a marginal tax rate combined with a cliff edge that was over 100%.
There are issues surrounding the £50,000 threshold, at which point high earners start having child benefit clawed back. That has remained unchanged. It has not gone up; it is another frozen threshold. That is dragging far more people into the means test for child benefit than even the Conservative Chancellor George Osborne—we can say his name now, as he is no longer a Member of this House—intended when he introduced the policy. The Government should be aware of the combined effect of fiscal drag and unindexed rates on real people’s choices.
Freezes are a stealthy and arbitrary way to raise tax revenues. They often have a bigger impact on household incomes than more eye-catching discretionary measures do. They are particularly expected to have an impact on lower earners. By 2028, someone earning £20,000 will be £1,165 poorer under the current fiscal drag system than they would if income tax had been raised by 1%. There have been various calculations of how many pennies this stealth tax raises on the up-front rate of income tax, and they range from 3p to 4p per £1. I hope that the Minister will confirm that and try to justify why on earth the Government are raising money in that way, rather than being more transparent and up-front about rates of income tax. What will they do about the high marginal rates that the fiscal drag and frozen threshold system is landing our entire structure with? It is distorting the structure and making it very difficult to justify much of how it works for the future.
Rob Butler (Aylesbury) (Con)
I am interested in what the hon. Lady is saying. Will she clarify the latter point about the increase in the rate that would have been necessary had it not been frozen? Is she saying that she would rather the basic rate of income tax had been put up by 3% or 4%, such that lower-paid workers—nurses, for example, to whom she has referred—who are in the lower tax bracket would pay more tax? That seems to be the logical end point of what she has suggested.
Dame Angela Eagle
I am not suggesting any policy—far be it from me to do so from this side of the House. I am a mere Back Bencher, and it is not for me to make tax policy from the Opposition Back Benches. I am merely pointing out some problems that the choices that the Government appear to have made with this stealth tax are causing real people out there.
The problems are exacerbated by high marginal rates, and by very difficult and bad incentives that are quite hidden. That is why I am raising some of them here—I am attempting to draw attention to them to see whether the Minister has a response. If the Government are working on those areas, I am trying to find out what they aim to achieve by doing things this way. That is precisely what these Standing Committees are about—one gets to talk in more detail about choices that are made.
The hon. Gentleman must not imagine that I am putting forward a completely costed, different alternative, because this is not the place or time to do that. I am pointing out some of the problems, about which there is cross-party concern. I am not even making highly party political points. Far be it from me to do so—it is too early in the morning for me to do too much of that—but there are issues that we need to surface so that we can hear the Government’s official response.
I fear that we are driving into a cul de sac that will cause more problems than it solves, particularly in the interaction of the income tax system with a range of benefits, not only for the very low paid, but for medium earners. That is not being properly talked about, so by raising the matter at this point in the Bill, I am trying to get a handle on the Government’s thinking. I look forward to listening to what the Minister has to say about it, and perhaps even intervening further if she says something that piques my interest.
Victoria Atkins
In that case, I will try to be extremely dull. I am genuinely grateful to the hon. Lady for her questions. If I may take issue with her challenge that this is somehow hidden or a stealth tax, we debated these thresholds in the previous Finance Bill in the autumn. My right hon. Friend the Chancellor was very clear in his statement and in the following debate, as well as during the consideration of the Bill, about the difficult decisions, and we very much include the threshold decisions in that category. We were up-front and transparent about what we had to do to address some of the underlying issues we face in the economy.
I do not for a moment underestimate the hon. Lady’s intentions in raising the matter, but I must push back on the idea that this is somehow being hidden. Indeed, I remember being asked about it on many occasions both in this place and, dare I say it, on media rounds—understandably so, because this matters to people.
There is one point of agreement across the House, however, and that is the impact of inflation on people’s take-home pay. That is why the Prime Minister has set it as his first of five priorities to halve inflation by the end of this year, because it hurts all of us, but it hurts the poorest in society the most. We have heard the ongoing debate about food inflation, and none of us wants to see the difficult situations that people on the lowest incomes are finding themselves in. That is why the Treasury is doing everything that we can to support the Bank of England, which is of course operationally independent, in lowering the rate of interest.
The hon. Member for Ealing North asked me about the OBR. I am happy to quote the Chancellor, who has said in relation to the OBR’s figures overall that we respect them. It is an independent forecaster, whose job it is to make a forecast. As we all know, however, and as we have seen very recently with the Bank of England, forecasts are exactly that—forecasts. They can change, so we are working to support the Bank of England in its work. We respect the OBR, but fundamentally we are trying to ensure that the lowest paid receive as much of their income without having to pay any tax as we can afford as a country.
Dame Angela Eagle
I assume that those figures are for now. Is there a calculation of where fiscal drag will have left them after 2027-28? The figures will undoubtedly go down, especially if inflation persists for any length of time. It is 10% now, which means that anyone who is within 10% of the next threshold will go over it this year.
Victoria Atkins
The hon. Lady has hit on exactly the point. We have to be so careful with forecasts, because there are so many variables. As she has identified, inflation is one of them. Please do not think that I am speculating about what may or may not be in future fiscal events, but if there are changes to the rate of national living wage, for example, that will have an impact. There are many variables, and that means that our figures are both costed from a Treasury perspective and examined by the OBR. We very much stand by the figures set out in the autumn statement and as part of Budget considerations in the spring.
Dame Angela Eagle
The Office for Budget Responsibility has said that the frozen thresholds will drag 2.1 million people into the higher rate of tax, raising £26 billion a year, which is the equivalent of 4p on the basic rate. One presumes that that is net of all the other things that the Minister is talking about.
Victoria Atkins
The shadow Minister asked that question. We respect the work of the OBR, and of course we understand that it is an independent forecaster. However, as I said, we have never shied away from the fact that this a difficult set of circumstances. I know it is not for the hon. Lady to set tax policy on behalf of her Front-Bench team, but my hon. Friend the Member for Aylesbury posed an interesting question: what is Labour’s alternative? Outside observers may wish to take that into account.
We believe in sound money, and the rate of debt interest that we are paying each year—some £120 billion—is money that we would much rather spend on our NHS, police and defence. However, precisely because of our extraordinary efforts to protect our constituents throughout the pandemic, to help Ukraine and to provide support through the cost of living crisis that has emerged from that, we are having to take these difficult decisions in a fiscally responsible way.
Ashley Dalton (West Lancashire) (Lab)
It is a pleasure to serve under your chairmanship, Ms McVey. This is my first Public Bill Committee, so I am definitely the baby in the room. There is just one thing I would like the Minister to clarify. When she was responding to the point raised by my hon. Friend the Member for Wallasey about the OBR projections, she said very clearly that she respected and understood them. However, does she agree with them?
Victoria Atkins
The hon. Lady will know that I have just answered her shadow Minister’s question on that. I will quote the Chancellor:
“I respect the OBR’s figures. The OBR is an independent forecaster”—
the hon. Lady must use the correct terminology—
“it is their job to make a forecast.”
However, I do observe that forecasts can change, which is why these variables are so important.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 4 ordered to stand part of the Bill.
Clause 16
CSOP schemes: share value limit and share class
Question proposed, That the clause stand part of the Bill.
Victoria Atkins
Clauses 16 and 17 make changes to improve two of the tax-advantaged employee share schemes. Clause 16 increases the generosity and availability of the company share option plan, or CSOP. The changes will help larger companies that have grown beyond the scope of the enterprise management incentive—EMI—scheme, to offer more attractive share-based remuneration, helping them to recruit and retain the key talent that they need to succeed and grow. Clause 17 makes changes to the provisions of the enterprise management incentives. Those changes will simplify the process to grant options under an EMI scheme, and remove some of the administrative burdens on participating companies.
CSOP is available to all UK companies wishing to offer their employees share options, but the EMI scheme is specifically targeted at small and medium enterprises. It helps them to compete with larger firms to attract and retain key talent by bolstering the attractiveness of the share-based remuneration they can offer to their employees. At Budget 2021, the Government published a call for evidence to seek views on whether the EMI scheme should be expanded. At spring statement 2022, they announced that it remains effectively and appropriately targeted. However, they also expanded the review to consider whether CSOP could support companies as they grow beyond the scope of EMI. Following the review, we decided that CSOP should be expanded to make it more generous and accessible to a broader base of companies, including scale-ups that are no longer eligible for EMI.
The Government also listened to those who said that the administrative requirements of the EMI scheme could be improved, particularly in relation to the process of granting options. That is an example for the hon. Member for Aberdeen North of the public-facing nature of our efforts in drafting this Bill. We are making these changes to address those concerns.
The changes made by clause 16 will increase the CSOP employee share options limit from £30,000 to £60,000 and allow future changes to the share option limit to be made by regulations. The “worth having” condition will be removed, allowing more share types, and therefore companies, to be included in the scheme. Clause 17 will remove two administrative requirements within EMI. The first is the requirement to include within the option agreement details of any restrictions on the shares to be acquired under the option, as those restrictions are typically set out in other documents. The second is the requirement for an employee who receives an EMI option to sign a declaration that they meet the EMI working time requirement. The clause will not remove the working time requirement itself, which is a key part of the scheme. These sensible changes will reduce the burdens on companies granting EMI options, saving them time and money and reducing the risk that tax relief is lost due to administrative oversights.
The changes to EMI will support an estimated 4,700 small and medium-sized companies, and an estimated 45,000 employees who are granted EMI options annually. The changes will apply to both schemes granted on or after 6 April 2023, and options granted before 6 April 2023 that have not yet been exercised.
Clause 16 will improve the company share option plan, making it more accessible and generous, which will support businesses to recruit and retain key staff. Clause 17 will improve the enterprise management incentives scheme by simplifying the process to grant options, and will support small and medium-sized businesses to recruit and retain the talent they need to succeed. I commend the clauses to the Committee.
James Murray
As the Minister said, clause 16 makes changes to the company share option plan, a tax-advantaged employee share scheme available to all UK companies and their employees. It will double the employee share options limit from £30,000 to £60,000; remove the “worth having” condition, which limits which types of shares are eligible for inclusion within a CSOP scheme; and make changes to the share options limit, which will now be achievable through secondary rather than primary legislation.
We understand from the Government’s policy paper that this measure seeks to support companies to attract talent and to grow by expanding the availability and generosity of CSOP. They hope to allow companies to offer their employees a greater stake in the company so employees can share in their employer’s success. The changes will help companies that have grown beyond the scope of the enterprise management incentives scheme to offer more attractive share-based remuneration, supporting them to recruit and retain talent. These changes to CSOP were announced not by the Chancellor at the spring Budget 2023, but by the previous Chancellor in September 2022, so it seems we have found one of the very few remaining measures from last autumn’s so-called growth plan.
Although the Minister has set out the details of what this measure involves, I would like to ask her to explain some of the detail behind its operational impact, set out in HMRC’s policy paper. In the section on operational impact, it says that a small IT change will be required to support delivery of the measure, which will be expected to cost less than £5,000. It also says that, due to the relaxation and increased generosity of the CSOP rules, HMRC will undertake increased compliance activity to ensure CSOP is being used appropriately. It says that additional resource will be dedicated to compliance work to support the effective delivery and implementation of this measure, and that this resource is expected to cost a total of £570,000.
Will the Minister confirm whether the additional resource dedicated to that compliance work will be additional net resource at HMRC, or will it involve any redeployment of resources? If the latter is true, will she explain the expected impact on other work carried out by HMRC? We know from a recent Public Accounts Committee report that £9 billion in tax revenue was lost during the pandemic because 4,000 HMRC staff fighting tax avoidance were redeployed. We therefore believe it is important to ask questions about any such potential redeployment. I look forward to a clear answer from the Minister on that point.
Kirsty Blackman
Like the Labour party, the SNP will not oppose this measure. These are positive changes. Particularly on EMI, the Government have listened to what companies are asking for, and making some of requested changes is important, particularly when it may not have been the Government’s initial intention to dos so. They have listened to the additional information that has come in and made that change as a result of the response from companies.
There are two sides to what happens in relation to employee share schemes. There is the experience that employers and companies have in relation to whether they are an EMI or a CSOP—it looks like that will be smoother for companies. There is also the experience that the employee has, and whether or not accessing those schemes works for their lives and what they intend to do. The right hon. Member for Knowsley (Sir George Howarth) has put forward a ten-minute rule Bill on the share incentive plan scheme, trying to ensure that lower-income workers can get access to the scheme and that the length of time that an employee is required to stay at the company before they can access their share ownership and benefits is reduced from five years to three years.
We know that the younger workforce these days are moving companies more quickly, and that is not necessarily a bad thing. Younger people are seeing the benefits of working for a number of different companies and building up a significant breadth of experience across companies, and they are more likely to job hop than my parents’ generation. As I said, it is not a bad thing; it is just a change in the way society works. As a result, share ownership schemes, in the way that they are written and organised by the Government, are less attractive to the younger workforce than they were to previous generations.
My key question is: what are the Government’s intentions for employee share ownership? Are they hoping to encourage and increase the amount of employees taking part in such schemes? It seems to me that 4,700 small and medium companies feeling good about EMI access is not all that many, and other companies that could benefit from it that may find there is not much in the way of interest among their employees because of the restrictions. Do the Government hope to make it more attractive for employees, or simply to make it slightly easier and more attractive for employers? If they hope to make it more attractive for employees, are they looking at the current restrictions and restraints on employee share ownership schemes and whether they work for the workforce of today, as opposed to just the workforce of yesterday?
I am incredibly positive about employee share ownership schemes. I do not necessarily think that every single company should use them, and I would certainly not push every single company in that direction. However, all companies that want to use them should have the flexibility to access them without red tape and bureaucracy, so removing some of that is helpful. Companies will be able to use them only if they get buy-in from their employees, which they can do only if the employee sees the benefit of taking part. It would be helpful to have an idea of the Government’s intentions—whether they plan to do any wider consultation or check in on the numbers, whether they have targets for employee share ownership and whether they plan to extend and increase it. It seems to me from clauses 16 and 17 that the Government are positive towards the schemes, but they have not gone quite far enough in increasing accessibility.
Victoria Atkins
If I may, I will answer the hon. Lady’s questions first. For the two schemes to work, we must help employers and employees to administer them and take advantage of them respectively. This is why we have made the changes that I set out.
We are mindful of the changes in the employment market that the hon. Lady described, and we looked very carefully at the gig economy. The issue is that many workers in the gig economy are not employed for tax purposes, so they fall outside the scope of EMI. Extending eligibility to the self-employed would go beyond the aims and objectives of EMI, because it is about employees having not just an earned income interest, but a full share investment in the business for which they work. There are complexities here, but we are mindful of how the modern economy is taking shape. That is why we will be launching a call for evidence shortly on non-discretionary share schemes, which are open to all employees of companies that opt in. I encourage her and others to participate in that call for evidence when it is launched.
The hon. Member for Ealing North asked about compliance, and he will know that HMRC takes compliance very seriously. Indeed, we have increased funding for compliance activities across the board. We want to ensure not only that officers can deal with particular forms of tax evasion or criminal activity, but that they can offer results across the board. I know that the answer will come to me shortly, but I commit to writing to the hon. Gentleman if it does not fall upon my shoulders before I sit down. I am very willing to take questions or interventions from any colleague on this matter, particularly from colleagues on this side of the House, because we fundamentally believe in entrepreneurship and capitalisation. We believe in spreading prosperity and wealth across the workforce, so it is not just the business owners but the employees that must profit.
Craig Whittaker
Before my time in this place, I worked for the Dixons stores group in retail. I remember how valuable the share options were to us—they were available to all employees. In fact, Dixons stores group was such a great company to work for that it often gave us free shares. On one occasion, it helped to pay for a very luxurious family holiday. Does the Minister agree that all the Government can do is to facilitate legislation to enable good employers to keep such things going? Skin in the game, as we used to say, is of as much value as money. Feeling part of the company is just as important.
Victoria Atkins
I am extremely grateful to my hon. Friend, who had a very successful business career before he was rightly elected to this place. He makes a really interesting point about spreading the benefits and how they do not just need to be financial, as he says. They can also be about career development. I recently visited John Lewis on Oxford Street. Although it has a different model of—
Victoria Atkins
Yes, Ms McVey; the trip to John Lewis will have to come later. I am helpfully informed that, as set out in the TIIN, the additional resource will be dedicated to compliance work to support effective delivery and implementation of the measure. That is expected, as the hon. Member for Ealing North said, to cost a total of £570,000, but we will write to him with further details in due course.
James Murray
I appreciate the Minister reading out the information from the policy note, which I also read and quoted during my speech. The question I was specifically asking, just to make sure there is no confusion at all, was whether the additional resource that she referred to—the £570,000 resource that is dedicated to compliance work—will be additional net resource at His Majesty’s Revenue and Customs, or will it involve any existing resource at HMRC being redeployed? If the latter, will the Minister set out—in writing, I presume—what impact the redeployment will have on other work carried out by HMRC?
Victoria Atkins
I am mindful that when the hon. Member asked me quite a technical question in a Statutory Instrument Committee recently, he misunderstood my response and raised a point of order that turned out to be wrong. I had to correct him on the record and with a letter to the Library, so I am pleased to be able to write to him on this matter to ensure that I have answered his question and that he understands the answer.
Victoria Atkins
I got it right. That was the point. He raised a point of order that was wrong.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17 ordered to stand part of the Bill.
Clause 26
Payments under Jobs Growth Wales Plus
Question proposed, That the clause stand part of the Bill.
Victoria Atkins
The clause clarifies that payments made under the Welsh Government’s Jobs Growth Wales Plus scheme are exempt from income tax, with retrospective effect from 1 April 2022. The scheme was introduced by the Welsh Government on 1 April last year to replace traineeships and Jobs Growth Wales. The changes made by the clause will exempt from income tax payments made by way of training allowances under the scheme. Without the clause, the payments would be taxable, which would not be in line with the treatment of payments made for other training allowances.
James Murray
As we have heard, the clause introduces an income tax exemption for payments made by way of training allowances under the Jobs Growth Wales Plus scheme, which the Welsh Government introduced on 1 April 2022 to replace the traineeships and Jobs Growth Wales programmes in Wales. This is a training and employment programme aimed at 16 to 18-year-olds who are not in education, employment or training, and is designed to help them overcome any barriers that they may face in further training or employment.
As I understand it, the scheme has three strands: engagement, advancement and employment. Under the engagement strand, participants receive a training allowance of up to £30 a week; under the advancement strand, they receive £55 a week, and under the employment strand, individuals will be paid at national minimum wage for the age group. We understand that the training allowances paid under the scheme will be exempt from income tax. That was announced by the Financial Secretary to the Treasury in a written ministerial statement on 11 October last year. The objective of the measure is to clarify the tax treatment payments made by way of training allowances under the Jobs Growth Wales Plus scheme, and it will have retrospective effect from 1 April last year. We will not oppose the measure.
Kirsty Blackman
Will the Minister clarify how the payment has been treated in the interim period? I understand that back in October the Government announced their intention to treat it as exempt from income tax, but what has happened to the payments made since 1 April last year? Have the individuals been liable for income tax during that period? Will repayments or tax adjustments be required for those individuals because of the retrospective nature of the measure? Will the Government provide some clarity on how they intend to tackle those things to ensure that everybody has certainty about their tax treatment—that the individual who pays income tax has certainty about their tax treatment and that devolved Governments, when they are putting in place any of the allowances, are certain about the relevant income tax treatment in advance? We do not want uncertainty around something that is supposed to be positive for individuals.
Victoria Atkins
I am happy to be able to tell the hon. Lady that they were exempted. In terms of costs, I see the word “negligible” in the Exchequer impact assessment, so that is the administrative side effect of what we are trying to achieve to support efforts to train young people in Wales, which are commendable and for which I welcome the support. Clause 27, which I do not think we will debate, allows us to clarify the treatment of devolution payments via statutory instrument, which we are keen to do. Indeed, the hon. Lady will know that significant work with the Scottish Government, led by the Chief Secretary to the Treasury, is going on across the Treasury to underpin the arrangements for the fiscal framework.
Kirsty Blackman
Let me make sure that I understand what the Minister is saying. The Welsh payments were considered exempted, and this measure is just the legislation catching up with the treatment that they were being given anyway. Is that correct?
Victoria Atkins
I can confirm that.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clause 28
Qualifying care relief: increase in individual’s limit
Question proposed, That the clause stand part of the Bill.
Victoria Atkins
The clause makes changes to support foster carers by increasing the amount of income tax relief available to them and ensuring that that relief stays at an appropriate level over time in line with inflation. We are nearly doubling the qualifying care relief threshold, which will give a tax cut to a qualifying carer worth an average of £450 a year. I know that hon. Members are particularly interested in supporting foster carers, who are real public servants, in looking after looked-after children.
Qualifying care relief has been unchanged since 2003. Many carers are now paying income tax on payments intended to represent the additional costs of fostering that qualifying care relief was intended to exempt. Minimum fostering allowances are set to rise by 12.4% in this financial year, and with current tax threshold freezes, current qualifying care relief levels are expected to push approximately 1,500 carers into tax, which could disincentivise care. We are seeking to reflect the higher allowances that are paid to carers and the higher costs of caring compared with when the relief was set originally. By linking the value of the relief to inflation, the measure will also help to ensure that the level of qualifying care relief remains appropriate over time, supporting carers now and in the future. This will help to provide a greater financial incentive for carers to join or stay in the care industry, improving the recruitment and retention of carers in the future.
The measure increases the amount of income tax relief available for foster carers across the UK and shared lives carers using qualifying care relief from £10,000 to £18,140 per year, plus £375 to £450 per week for each person cared for. Those thresholds will be index linked to the consumer prices index. That will benefit more than 33,000 individuals who receive care income in respect of foster caring and other types of care and who currently submit self-assessment returns; such people look after an estimated 58,000 foster children.
We expect to take most care income out of tax by providing a higher level of relief. It will have simplification benefits, because it will allow more carers to use the simpler method of completing their self-employment pages on their self-assessment return. I hope that that will be a welcome improvement to the tax position of foster carers and shared lives carers. I therefore commend the clause to the Committee.
James Murray
As the Minister says, the clause increases the annual amount of care income that a recipient of qualifying care relief will receive that is not subject to income tax. Furthermore, the clause provides for the annual amount to increase in subsequent tax years in line with CPI. We know that qualifying care relief allows carers who look after children or adults, including foster carers, shared lives carers and kinship carers, to receive certain payments tax free, up to an annual limit. We know that the annual limit comprises a fixed amount for each household, plus a weekly amount for each child or adult being cared for.
Qualifying care relief is a tax simplification providing specific tax relief for care income as a replacement for apportioning and calculating full deductions for expenses. The relief allows carers to keep simpler records for their care activities and to use a simpler method of filling in the self-employed pages of their tax returns, as the Minister mentioned. We recognise that the clause increases the fixed and weekly amounts making up the annual limit to bring more carers out of income tax and simplify their tax reporting responsibilities. It also introduces CPI indexation.
We welcome the fact that the clause could provide a greater financial incentive for carers to join or stay in the care industry, potentially improving the recruitment and retention of carers in the future, so we will not oppose it.
Kirsty Blackman
First, given the inflation that we are facing, it is incredibly important that people who are caring, and taking on caring responsibilities, can afford to do so and are not forced to stop because of an impact on their income. This is a positive step. A not insignificant number of those who are cared for face a specific issue, such access to special diets, for which inflation has increased much more than even for food inflation. Individuals caring for anybody who is on a special diet will have seen a differentially large impact on their household spend specifically as a result of having to cater for those special diets. The changes being made therefore could not have come at a better time.
It is also positive to hear recognition for kinship carers, who are so often missed out in conversations about caring, even if people are taking on a formal role as kinship carers. We could not do without the significant amount of work that kinship carers do, so I am pleased, having previously had to argue in my council role for similar benefits for kinship carers as those that foster carers were receiving, that the Government have as a matter of course included kinship carers in the qualifying care relief, and ensured that the changes being made extend to them.
Dame Angela Eagle
I think that this measure will be welcomed across the Committee. As the Minister said, no one will vote against it. All of us know locally, from our constituency advice surgeries and our general work, the pressure that the entire care system is under. We know many of the things that are wrong with it and difficult in it, and how crucial it is to try to get it right, not least for the life opportunities of those people who are caught up in the system.
In the context of a welcome change, could the Minister explain the decision to index to CPI rather than RPI? The retail price index takes into account the costs of rent or housing in a way that I would have thought was directly relevant in this context. Why was it decided to use CPI rather than RPI for future indexation?
Victoria Atkins
We use CPI across the board. What we have tried to do is bring the value of the QCR back to its intended level. As I said, it had not changed since 2003. Index linking protects its value to foster carers in the future, so that a future Finance Bill Committee does not have to consider a similar uprating in the future.
Dame Angela Eagle
I thank the Minister. It is obviously a good thing that there will be indexation. In fact, I was talking about the lack of indexing when we were talking about the freezing of tax thresholds earlier, so I understand that point.
However, I am asking a very technical, specific question about why the Government are using CPI rather than RPI. RPI includes the cost of housing, and the cost of rent, or whatever, for the place where the caring is being done seems to me to be a relevant cost in this context. Indexing to RPI would actually be a better way of representing and indexing those costs going forward. I am asking: why CPI, rather than RPI?
Victoria Atkins
It is because that tends to be our measure across the board. I take the hon. Lady’s point about housing, but if someone needs help with the cost of housing, depending on their income levels, there are other ways in which they can get help from the state for that. This relief was specifically to reflect the extraordinary public service that families across our constituencies provide in helping those most vulnerable of children.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill
Clause 29
Estates in administration and trusts
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 4, in schedule 2, page 291, line 38, at end insert—
“(za) the property comprised in the settlement is not held for a pensions purpose within the meaning of paragraph 7(3) of Schedule 1C to TCGA 1992 (property comprised in settlements held for a pensions purpose);”
This amendment would mean that a pensions settlement could not be a “qualifying settlement” for the purposes of section 24B of the Income Tax Act 2007 (being inserted by the Bill) or a “relevant settlement” in respect of which the conditions in subsection (9) of that section could be met.
That schedule 2 be the Second schedule to the Bill.
Victoria Atkins
Clause 29 and schedule 2 make changes to provide greater certainty and simpler tax administration for trusts and estates by legislating and extending an existing concession. The changes prevent trusts and estates having to report small amounts of income tax to HMRC, make tax calculations more straightforward for some trustees, and provide technical clarifications for estate beneficiaries.
Trustees of trusts and personal representatives of deceased persons’ estates do not have tax allowances in the same way that individuals do. As a result, they must send HMRC a self-assessment return for all income, even small amounts. HMRC operates a narrow concession so that trustees and personal representatives do not have to report small amounts of untaxed savings income.
Last year, HMRC consulted on proposals to formalise and extend the concession, and on related reforms that would apply to smaller trusts and estates. Respondents broadly welcomed the proposals. We published a summary of the responses to the consultation at the spring Budget and are proposing legislation in line with that publication.
The changes made by clause 29 and schedule 2 will provide greater certainty and simpler tax administration for trusts and estates. Part 1 of the schedule makes technical amendments relating to income distributed from a deceased person’s estate to a beneficiary. Those ensure that the beneficiary’s tax credits operate correctly, and that a person can use their savings allowance against distributed savings income.
Part 2 of the schedule introduces a tax-free amount for trusts and estates with an income of £500 or less in a tax year. That frees smaller trusts, and around one in every seven estates with income, from paying and reporting income tax. The tax-free treatment for estate income is also passed on to the estate’s beneficiaries. For groups of trusts, the £500 limit will be reduced to a minimum of £100 per trust. That will prevent individuals from splitting up their investments into multiple small trusts to build up an inappropriate amount of tax-free income. We have tabled amendment 4 to simplify that rule. It excludes certain pension schemes from consideration when determining the amount of any reduction to a trust’s £500 tax-free amount.
James Murray
As we have heard from the Minister, clause 29 introduces schedule 2, which makes provisions relating to the taxation of estates in administration and trusts. We understand that the clause implements the Government’s response to the “Income tax: Low income trusts and estates” consultation conducted by HMRC between April and July 2022. The response was published at the time of the spring Budget. The clause seeks to legislate for an existing concession on the administration of tax for trusts and estates.
We will not oppose this measure, but I ask the Minister to address concerns raised by the Chartered Institute of Taxation about the impact of this clause on trusts. It believes that the legislation takes a practical approach on estates, which will benefit both the personal representatives of the deceased and their beneficiaries. However, it believes there is less simplification in respect of trusts with low incomes, and that for some people, the administrative burden will actually increase. The institute has concerns about the way that trust income is taxed in two stages. First, the trustees report the trust’s income and pay tax on it. Secondly, when income is distributed to beneficiaries, they must report the income and pay any tax that remains due after credit has been given for the tax that was taken at the first stage.
The Chartered Institute of Taxation draws attention to the fact that although a £500 threshold, like that for estates income, is applied to the income accruing to the trustees of a settlement, that does not exempt the income in the hands of the beneficiaries. Where trustees have no liability to report or pay, basic rate taxpayers will have to pay the basic rate tax due on their income from the trust. Currently, they may not be filing a tax return at all, as their basic rate liability will have been met by the tax deducted by the trustees; this measure may mean that they now have to file a tax return. I would welcome the Minister’s thoughts on that point, and would be grateful for a response to CIOT’s concern that this measure, while described as a simplification, could impact on often vulnerable beneficiaries receiving modest amounts of income, who will now have greater compliance burdens.
Kirsty Blackman
I have a quick question on Government amendment 4. Will it change the application of schedule 2 and proposed new schedule 1C to the Taxation of Chargeable Gains Act 1992, or does it simply clarify what is intended anyway under those schedules? The amendment specifically mentions the property not being held for pensions purposes. I am trying to understand whether that was the original intention, or whether the amendment changes the intent of schedule 2 and of schedule 1 to the TCGA.
Victoria Atkins
On the simplification point, the replacement of the lower-rate band with the new tax-free amount supports our long-standing goal of a modern and simpler tax system. This is a simplification for low-income discretionary trusts, as income within the tax-free amount will no longer be taxed as it arises. The change also simplifies calculations when income distributions are made. The consultation last year outlined that where discretionary trusts make income distributions, the existing 45% credit given to beneficiaries with that income would remain, as would the continued need for trustees to top up their payments to HMRC to match that credit when the distribution is made. I am told that the Chartered Institute of Taxation agreed with that proposition, and the Association of Taxation Technicians saw that as largely a question of timing and did not see a particular issue with the principle.
The hon. Member for Ealing North asked about vulnerable beneficiary trusts. The measures are a simplification for those trusts, as for any other low-income trust, as there will no longer be the need to elect to have income taxed as if for vulnerable beneficiaries. Instead, the income will simply not be taxed as it arises. Most vulnerable beneficiary trusts are, indeed, discretionary trusts, and as I said earlier, both the Chartered Institute of Taxation and the Association of Taxation Technicians have opined on this. The measure does not affect the need for trust beneficiaries to consider their tax reliability on their trust income. On the hon. Member for Aberdeen North’s question, the amendment clarifies our intentions.
James Murray
I thank the Minister for her response to my point. For clarity, my understanding of the Chartered Institute of Taxation’s point was that where trustees have no liability to report or pay, the beneficiaries, if they are basic-rate taxpayers, may still have basic rate income tax due on their income from the trust. I may have misunderstood, but did she say that beneficiaries will not be liable to income tax? Can she clarify that point?
Victoria Atkins
I will repeat exactly what I said for the hon. Gentleman, slowly: the measure does not affect the need for trust beneficiaries to consider their tax reliability on trust income that they receive.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Schedule 2
Estates in administration and trusts
Amendment made: 4, in schedule 2, page 291, line 38, at end insert—
“(za) the property comprised in the settlement is not held for a pensions purpose within the meaning of paragraph 7(3) of Schedule 1C to TCGA 1992 (property comprised in settlements held for a pensions purpose);”—(Victoria Atkins.)
This amendment would mean that a pensions settlement could not be a “qualifying settlement” for the purposes of section 24B of the Income Tax Act 2007 (being inserted by the Bill) or a “relevant settlement” in respect of which the conditions in subsection (9) of that section could be met.
Clause 30
Transfer of basic life assurance and general annuity business
Question proposed, That the clause stand part of the Bill.
Victoria Atkins
Clauses 30 and 31 address two issues concerning the tax rules that deal with reinsurance of a specific type of long-term insurance business known as basic life assurance and general annuity business, or more commonly, BLAGAB. Clauses 32 and 33 address the corporation tax and pension tax consequences that will arise from proposed new schedule 12 of the Financial Services and Markets Act 2000, which amends the procedure for a court-ordered write-down of an insurer’s liabilities when an insurer is in financial distress.
Clauses 30 and 31 were originally announced by the Economic Secretary to the Treasury in a written ministerial statement on 15 December 2022 and applied with effect from that date. They address the risk of both tax loss and unfair outcomes for insurers that could otherwise arise from commercial transfers of BLAGAB from one insurer to another.
Insurers writing BLAGAB are charged corporation tax under the “income minus expenses” basis of taxation, which seeks to tax the shareholder profits and the policyholder investment return together as a single taxable amount. When a BLAGAB book is reinsured prior to the transfer of a business, the shareholder profit and policyholder investment return become separated and are taxed differently, which could result in a tax mismatch. Clauses 32 and 33 prevent unintended tax consequences arising for both the insurer and individuals in the event of a court-directed write-down, which will help to ensure that such write-downs are a viable option to insurers in financial difficulty.
Clause 30 addresses a possible tax mismatch arising from the rules applying to the reinsurance of BLAGAB, which can result in a loss of corporation tax when a court-approved transfer of BLAGAB is preceded by reinsurance. In that situation, the clause classifies and taxes the reinsured business as BLAGAB in the hands of the reinsurer, ensuring that profits are taxed on a consistent basis. By protecting the Exchequer in such a way, this measure will increase receipts by £50 million to £60 million per annum.
Clause 31 addresses an industry concern that the current scope of the legislation, which treats certain sums received under a reinsurance contract as taxable income, may be unnecessarily wide and is blocking commercial transactions. It amends section 92 of the Finance Act 2012 so that it does not apply where substantially all the insurance risks of a book of BLAGAB are reassumed by a reinsurer.
Clause 32 addresses the corporation tax consequences that could otherwise arise when an insurer’s liabilities are written down under proposed new section 377A of the Finance Services and Markets Act 2000, and when there is any subsequent write-up under proposed new section 377I of FSMA. Without the clause, any release of liabilities could lead to an undesirable additional tax charge, which would reduce the balance sheet benefits of the write-down. The changes therefore help to ensure that the ailing insurer avoids insolvency. The clause also prevents the insurer from claiming a tax deduction where a write-down order is subsequently varied or terminated, which ensures that when an insurer recovers, the overall impact of the clause is tax neutral.
Clause 33 will extend the circumstances in which a pre-6 April 2015 lifetime annuity or a dependants annuity under a registered pension scheme can be reduced under a section 377A write-down without incurring unauthorised payments charges. This will ensure that those who receive financial services compensation scheme top-up payments, following a write-down under proposed new section 217ZA of the Financial Services and Markets Act 2000, will not face a tax disadvantage.
These clauses address a possible mismatch within the life insurance tax rules and clarify the scope of existing legislation, facilitating commercial transactions and protecting vital Exchequer revenue. They also ensure that write-down orders are a viable option for insurers in financial distress, and do not cause any additional tax liability for either the insurer or the individuals who hold policies with those insurers. I therefore recommend that the clauses stand part of the Bill.
James Murray
As we have heard, clause 30 applies to reinsurers of specific types of long-term insurance businesses known as basic life assurance and general annuity businesses, or BLAGAB. This is a technical change that addresses a tax mismatch in the life insurance rules where reinsurance precedes a transfer of BLAGAB. In that situation, the clause classifies the reinsured business as BLAGAB in the hands of the reinsurer.
We recognise that when books of life insurance policies are transferred between insurers, the economic transfer is typically effected by a reinsurance contract, pending court approval of the transfer. That gives the purchaser the economic benefits of the acquisition immediately. As we know, a tax mismatch can arise, as the profits from the business are initially taxed in the hands of the cedant as BLAGAB, then in the hands of the reinsurer as non-BLAGAB and, finally, after the business transfer scheme occurs, in the hands of the reinsurer as BLAGAB once again. A loss of tax can occur if a non-BLAGAB trade loss arises for the reinsurer and is offset against total profits or surrendered as group relief. The clause resolves that anomaly by ensuring that any profits or losses from the reinsured business that arise to the reinsurer are within BLAGAB. The ensuing result is that any trade profit or loss in the reinsurer will be subject to the BLAGAB rules, which accordingly brings the tax treatment of the reinsurer in line with the seller of the business.
We will not oppose this measure. For completeness, however, I would be grateful if the Minister could confirm the Exchequer impact of the measure, as it was not included in the original policy paper published on 15 December last year. We recognise that, as the policy paper points out, a consultation was not conducted due to the risk of forestalling. We also recognise that the amendments to eliminate the possibility of a mismatch will apply from 15 December last year, regardless of when the reinsurance contract was entered into.
Dame Angela Eagle
We often plead for financial services legislation to be made simpler, but from listening to the debate, it seems that we have not quite succeeded yet. I have a few questions, but the changes seem to be sensible; they ensure that there is no game-playing when it comes to reinsuring those bits of business that might need to be transferred from an ailing or failing insurance company to something stronger, so that those who rely on payments for their pensions or other costs can be assured that they will not lose out.
Have these technical changes been proposed as a result of an issue in the insurance world? Do insurers who wish to join larger companies or pass on some of their insurance policies want to do so because they thought that they had a tax advantage, and have buyers not been wanting to buy because they think that they might be left holding the baby, and face a big tax issue? Is this a structural problem, or does the Treasury see this as a potential problem that it wants to iron out before it manifests in the market? I suppose that is the question I am asking. If we are talking about a problem that has been holding up the efficient working of the market, what will the effect of the change be? Will it be beneficial? Has the Treasury modelled it, so that it knows the implications of the change? I am trying to get a handle on whether this is a theoretical issue, or whether there is an actual problem that has led to these changes, which seem sensible, if complex.
Victoria Atkins
First, in answer to the hon. Member for Ealing North, the Exchequer impact is plus-£15 million for 2022-23—all the figures are positive—plus-£50 million in 2023-24, plus-£55 million in 2024-25, and the same for 2025-26 and 2026-27. That is how long the measure has been scorecarded for. The hon. Member for Wallasey asked whether the risk was possible or actual. We legislated before significant further risk could arise on the adoption of the new accounting standard, IFRS 17.
Clause 30 addresses a possible tax mismatch in the BLAGAB reinsurance rules. Clause 31 addresses a matter brought to HMRC’s attention by the insurance sector, which has a long-standing concern that the current scope of the legislation, which treats certain sums received under a reinsurance contract as taxable income, may be unnecessarily wide and is blocking commercial transactions. In relation to the hon. Lady’s laments about the simplification of financial services legislation, I speak with the scars of having tried to prosecute insider dealing cases in my time, so I can understand why she asks about that.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clauses 31 to 33 ordered to stand part of the Bill.
Clause 34
Corporate interest restriction
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 5.
That schedule 3 be the Third schedule to the Bill.
Clause 35 stand part.
That schedule 4 be the Fourth schedule to the Bill.
Victoria Atkins
Clause 34 and schedule 3 make changes to the corporate interest restriction and connected rules in order to protect Exchequer revenue, remove unfair outcomes and reduce administrative burdens for businesses. Clause 35 and schedule 4 amend tax rules for real estate investment trusts, qualifying asset-holding companies, and overseas collective investment vehicles that invest in UK property.
On clause 34, the UK’s corporate interest restriction rules prevent groups from using financing expenses to erode their UK tax base, where those expenses are not aligned with a group’s UK taxable activities. The Government estimate that the rules have increased corporation tax receipts by over £1 billion per annum since they were introduced in April 2017. The rules can be complex because they operate at both worldwide group and individual entity level. Therefore, on their introduction, the Government committed to keeping the rules under review, and in July last year HMRC set up an external working group to consult on proposed amendments to address issues raised by businesses and their advisers.
Following that consultation, we are introducing clause 34 and schedule 3 to make a total of 21 amendments to the corporate interest restriction and related rules limiting deductions for finance costs. There are five changes that protect the Exchequer’s position. I will not go through all five, but they include ensuring that groups cannot reallocate amounts of disallowed financing costs to reduce or eliminate a corporation tax inaccuracy penalty for careless or deliberate errors, and confirming that groups containing charities cannot benefit from tax relief for financing costs incurred in respect of tax-exempt activities. In most cases, the changes implemented by the Bill will take effect for periods of account starting on or after 1 April 2023.
The Government have also tabled amendment 5, which concerns the definition of an insurance company for the purpose of the corporate interest restriction rules. The amendment ensures that the legislation has the desired effect, and I am told that it is supported by the Association of British Insurers.
At Budget 2020, we launched a review of UK investment funds’ taxation and regulatory rules. That led to the introduction of a new tax regime for qualifying asset-holding companies in April last year. Clause 35 and schedule 4 make targeted changes to that regime, to address issues raised by industry. They also make reforms to other tax regimes for investment vehicles that invest in UK property.
There are many changes, including, first, to amend the “genuine diversity of ownership” condition in the tax regimes for qualifying asset-holding companies and real estate investment trusts, as well as the non-resident capital gains tax rules that apply to overseas collective investment vehicles. The second group of changes make targeted amendments to the REIT rules, to address issues raised by industry following a call for input in April 2021. They remove unnecessary constraints and administrative burdens. The third group of changes make amendments to the qualifying asset-holding companies regime, making it more widely available to investment fund structures that fall within its intended scope.
It is right that, after six years, the Government review the corporate interest restriction rules and address issues brought to our attention. That is what these clauses and schedules serve to deliver.
James Murray
As we have heard, clause 34 and schedule 3 make amendments in connection with the corporate interest restriction and predecessor legislation, to ensure that the rules work as intended. As we know, the corporate interest restriction rules superseded part 7 of the Taxation (International and Other Provisions) Act 2010, commonly referred to as the debt cap. The aim of the rules has been to restrict the ability of large businesses to reduce their taxable profits through excessive UK finance costs. Amendments were made to the corporate interest restriction rules in the Finance Acts of 2018, 2019 and 2021, to address various technical issues in order to ensure that the rules operated as intended. In July 2022, a working group was formed to consider proposed amendments to the rules, following further representations from customers, tax advisers and representative bodies regarding unfair outcomes. It was announced at the Budget that the Government would make a number of modifications to the rules, and clause 34 implements those modifications.
We will not oppose clause 34, but I would be grateful if the Minister could give some sense of the scale of the benefit that the changes are likely to bring to businesses or the Exchequer. The policy paper for the measure begins:
“This measure addresses a number of issues to protect the Exchequer and reduce unfair outcomes or high administrative burdens.”
However, in the detail, it states:
“This measure is expected to have a negligible impact on the Exchequer…This measure will have a negligible impact on an estimated 6,800 groups,”
and
“This measure is expected overall to have no impact on business’ experience of dealing with HMRC as the proposals do not significantly change any processes or administrative obligations.”
The policy paper therefore sets out at several points the view that the measure has no impact or, at most, a negligible impact. I would be grateful if the Minister could help us to square those statements with the aim of the measure. For instance, can she explain how the policy paper can claim at one point that the measure will “reduce...high administrative burdens,” yet also conclude that
“the proposals do not significantly change any processes or administrative obligations”?
Clause 35 and schedule 4 update the rules governing the tax treatment of certain investment vehicles. The qualifying asset-holding companies regime was included in the Finance Act 2022 and came into effect from April last year. Amendments to the regime were initially announced in July 2022, with further amendments announced in March 2023. The amendments seek to make the regime more widely available to investment fund structures that fall within its intended scope.
As we have heard, clause 35 and schedule 4 also affect the rules for real estate investment trusts—companies through which investors can invest in real estate indirectly. In a written statement on 9 December 2022, the Chancellor announced changes to the property rental business condition and three-year development rule within the real estate investment trust rules. Schedule 4 gives effect to those changes, and we will not oppose clause 35.
Victoria Atkins
We are making these changes because, as I have said, we are mindful that this is an incredibly complex area of law and of corporate accountability and we are genuinely happy to listen to businesses when they tell us that there are problems and they think that they have solutions for those problems. That is why we have gone through this process and set up an external working group. HMRC, businesses and their advisers have identified issues with the current rules. We are making these changes to protect the Exchequer and reduce unfair outcomes and administrative burdens on affected businesses.
The hon. Member for Ealing North referred to the worldwide debt cap. The corporate interest restriction rules superseded the tax treatment of financing cost and income rules, commonly referred to as the worldwide debt cap, but there are still open inquiries and cases in litigation where the debt cap legislation is in point. The changes clarify that a revised statement of disallowances is ineffective unless a revised statement of allocated exemptions is also submitted, so exemptions must always be reduced in line with disallowances.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Schedule 3
Corporate interest restriction etc.
Amendment made: 5, in schedule 3, page 309, line 4, leave out paragraph 28 and insert—
‘28 (1) In section 494 of TIOPA 2010 (other interpretation), at the end insert—
“(3) The definition of “insurance company” in section 65 of FA 2012 (which is applicable to this Part as a result of section 141(2) of that Act) has effect for the purposes of this Part as if, in subsection (2)(a), the reference to Part 4A of the Financial Services and Markets Act 2000 included a reference to the law of a territory outside the United Kingdom which is similar to or corresponds to that Part.”
(2) In Part 7 of Schedule 11 to that Act (index of defined expressions), in the entry relating to an insurance company, in the second column, for “section 141 of FA 2012” substitute “section 494(3)”.’—(Victoria Atkins.)
This amendment secures that companies count as insurance companies for the purposes of the corporate interest restriction rules if they effect or carry out contracts of insurance and have regulatory permission to do so under a foreign law which is similar to or corresponds to the relevant United Kingdom law.
Schedule 3, as amended, agreed to.
Clause 35 ordered to stand part of the Bill.
Schedule 4 agreed to.
Ordered, That further consideration be now adjourned. —(Andrew Stephenson.)
Finance (No. 2) Bill (Second sitting)
Tuesday 16th May 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Finance (No. 2) Act 2023 View all Finance (No. 2) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 May 2023 - (16 May 2023)
The Chair
With this it will be convenient to discuss the following:
Clause 37 stand part.
That schedule 5 be the Fifth schedule to the Bill.
Clause 38 stand part.
The Financial Secretary to the Treasury (Victoria Atkins)
Clause 36 makes changes to ensure that tax is paid on value built up in UK shares or securities even if the shares or securities are exchanged for an equivalent holding in a non-UK company. The measure is already legally in application since the point of its announcement in the autumn statement on 17 November last year. It will ensure that tax cannot be avoided where a UK resident non-domiciled individual with a degree of control in a UK company exchanges shares or securities in a UK close company for shares or securities in a non-UK holding company.
Before the measure was introduced, individuals could claim the remittance basis on disposal of the non-UK company shares and any income received in respect of the non-UK company shares. That means that tax will be paid only on the chargeable gain or the income if it is brought into the UK. The measure prevents the remittance basis from applying to the chargeable gain on disposal where the individual holds more than 5% of shares or securities in a UK close company and exchanges the shares for an equivalent holding in a non-UK company. Instead, the individual will pay tax as if the share exchange had not taken place. The clause will prevent tax avoidance by a small number of individuals, and protects £830 million of revenue across the scorecard period, ensuring that tax is paid on value built up in the UK on UK company securities even when securities are exchanged for securities in a non-UK company.
Clause 37 and schedule 5 make changes to require large multinational businesses operating in the UK to prepare transfer pricing documentation in accordance with the OECD’s transfer pricing guidelines. Transfer pricing is a means of ensuring that the pricing of transactions between connected parties is at arm’s length for tax purposes. From the financial year 2016-17 to 2021-22, HMRC brought in £10 billion in additional tax from transfer pricing compliance activities. HMRC does not currently prescribe specific transfer pricing records that UK businesses must prepare to demonstrate that their tax returns are complete and accurate, or the format of those records.
The proposed changes would require UK businesses to prepare OECD standardised documentation, which is described as a master file providing high-level information of the global business operations and a local file providing more detailed information about material cross-border transactions of UK group members with other members of the multinational group. The changes made by clause 37 and schedule 5 provide greater certainty for UK businesses, provide HMRC with better quality data to enable more efficient and targeted compliance interventions, and align the UK’s practice more closely with the transfer pricing documentation requirements of comparable tax administrations.
Clause 38 makes changes to ensure that access to double taxation relief is limited in respect of dividends received by UK companies in periods prior to the introduction of a broad distribution exemption regime in 2009. Specifically, it will prevent new claims for double tax relief credit calculated at the foreign nominal rate of tax on such dividends being made on or after 20 July 2022, the date on which the Government announced in a written ministerial statement that legislation would be introduced for that purpose. Unlike normal double tax relief, which is given on tax actually paid, foreign nominal rate credit is a notional amount calculated by reference to the rate of tax applicable to the profits out of which the overseas dividends were paid.
A first-tier tribunal decision in 2021 concerning the nature of this credit raised the prospect that certain claims could still be made by companies in receipt of foreign dividends prior to the introduction of distribution exemption in 2009, possibly as far back as 1973, so we needed to act. The measure will protect Exchequer revenue by preventing new claims from being made for long-settled years where no actual additional tax has been paid by the claimant. It does not seek to prevent such claims in relation to periods that are open or remain subject to ongoing litigation. The measure is intended to preserve the balance between taxpayers’ rights to make double-taxation relief claims and the need to impose reasonable time limits in respect of such claims. I recommend that all of these clauses stand part of the Bill.
James Murray (Ealing North) (Lab/Co-op)
I begin by addressing clause 36, which inserts new sections into the Taxation of Chargeable Gains Act 1992. As we heard from the Minister, the new sections will help to make sure that UK tax cannot be avoided on chargeable gains made on the disposal of a UK business, or on income received in respect of shares or securities held in a UK business, by exchanging securities in a UK company for securities in a non-UK holding company. Under the current legislation, where such an exchange takes place and the individual is a UK-resident non-domicile, they will be able to claim the remittance basis on any chargeable gain made on the disposal of the non-UK company’s securities or on any income received in respect of the offshore company’s securities.
I would be grateful if the Minister could set out the Government’s response to some of the queries about the detail of the Bill that have been raised by the Chartered Institute of Taxation, which has expressed concern that by applying only to individuals in their other guises—for example, when they are acting as trustees—the measure leaves gaps that could be exploited. The Chartered Institute of Taxation believes that there is potentially a straightforward avoidance opportunity here, whereby having shares held by trustees just before the share-for-share exchange could be resolved by extending the measure to cover trustees, rather than just individuals on their own. To tackle this issue, the Chartered Institute of Taxation suggests that individuals acting as trustees, or as partners or members of partnerships or LLPs, be included within the definition of those affected by the change, to ensure that artificial intermediaries are not put in place prior to any exchange.
The second point raised by the Chartered Institute of Taxation, which I would like the Minister to address, relates to the wording of the Bill with respect to the ownership of shares, which it believes may also create an avoidance opportunity. New section 138ZA(1)(d) of the Taxation of Chargeable Gains Act 1992, which clause 36 introduces, refers to the person to whom the shares are issued—the legal owner, as opposed to the beneficial owner. It is well recognised in tax law that the beneficial owner is the real owner for tax purposes, so the Bill should logically refer to beneficial ownership. The Chartered Institute of Taxation is therefore concerned that failure to clarify the beneficial, rather than legal, ownership could leave a possible avoidance opportunity open, and I would be grateful if the Minister could address that point.
More widely, looking beyond the specific detail of the Bill, we believe it is important to consider the context in which the clause operates. It seems clear that the situation that the measure in the clause seeks to address arises only because of the existence of the non-dom tax status and the associated remittance basis. Indeed, the Government’s own policy paper on this matter makes it clear that the measure is expected to affect a very small number of wealthy, UK-resident non-domiciled individuals a year. In practice, the measures we are considering need to be addressed only because the Government refuse to get rid of the £3.2 billion-a-year tax loophole that the Prime Minister has referred to as “that non-dom thing”.
The Minister may recall how she told the House in January that the measures we are debating today would mean that the Chancellor would close the loophole in non-dom legislation, but when we inspect the detail that is before us today, it is clear that this is just a smaller loophole within the much larger and more profound loophole: the continued existence of the non-dom tax status. The policy paper underscores this point and confirms that the measure will raise, on average over the next five years, just one 20th of the £3.2 billion lost through the non-dom tax status every year. I urge the Minister to go beyond the small step today and commit to abolishing the non-dom tax loophole altogether.
Moving on to clause 37 and schedule 5, we understand that this measure is intended to make sure that businesses maintain and provide upon request transfer pricing documentation prepared in accordance with the OECD transfer pricing guidelines. We recognise that accessing high-quality data in a standardised format would enable HMRC to carry out more informed risk assessments, target resources more efficiently and reduce the time taken to establish the facts in compliance interventions. Moreover, having to clearly report transfer pricing information in specific documentation will result in businesses having clearer and more robust transfer pricing positions to inform the filing of their return. This may encourage and incentivise businesses that adopt higher risk transfer pricing positions to change their behaviour.
In recent years there have been significant developments in the field of international taxation. More than six years ago, the OECD presented a package of measures in response to the G20-OECD base erosion and profit shifting action plan, including a requirement to develop rules regarding transfer pricing documentation. The action 13 final report recognised the importance of having the right information at the right time to identify and resolve transfer pricing risks. This led to the introduction of guidance on a standardised approach to transfer pricing documentation.
The standardised approach consists of three things: a master file containing standardised information relevant for all multinational enterprise group members; a local file referring specifically to material transactions of the local taxpayer; and a country-by-country report for the largest multinational enterprise groups containing aggregate data on the global allocation of income, profit, taxes paid, economic activity and so on among the tax jurisdictions in which it operates.
We understand from the policy paper on this measure that the UK did not originally introduce specific requirements regarding the master file and local file because the Government felt that the UK already had broad record-keeping requirements. They seem to have changed their mind on this, which has led to this Bill. It seems that the status quo had created uncertainty for UK businesses regarding the appropriate transfer pricing documentation that they needed to keep. That led to an inconsistency of approach. Although this measure relates to the standardised approach for transfer pricing documentation, I would like to ask the Minister to update the Committee on the status of country-by-country reporting.
The policy paper refers to the fact that the UK implemented the country-by-country minimum standard. However, as we know, the Government have long been hesitant to go beyond that minimum and provide public country-by-country reporting. Indeed, nearly three years ago my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) made it clear to one of the Minister’s predecessors that for years the Opposition has been urging the Government to commit to country-by-country reporting on a public basis. Will the Minister give us her view on public country-by-country reporting and explain what is preventing the Government from implementing it?
Finally, clause 38 introduces a measure to limit access to double taxation relief in certain circumstances. Specifically, we understand that it will prevent new claims for double taxation relief credit, calculated by the foreign nominal rate of tax, which could arise in relation to overseas dividends received by UK companies in periods prior to the introduction of the distribution exemption in 2009. We recognise that this measure is intended to preserve the balance between double taxation relief claims and the need to impose reasonable time limits in respect of such claims, so we will not be opposing this clause.
Sam Tarry (Ilford South) (Lab)
It is an honour to speak under your chairmanship, Ms McVey. On the points made by my hon. Friend in relation to clause 36, it is important for the record that we understand the Government’s thinking around non-doms. Although work has been done to close the particular loophole that was mentioned, as my hon. Friend has just said it is quite apparent that that work is tiny compared to the scale of the problem. It is worth exploring the breadth of the problem.
Let us be clear. Non-doms receive around £10.9 billion in offshore income. That is capital gains that they are not required to report on to HMRC or pay tax on in the UK each year. For a non-dom using that remittance basis scheme, that amounts to a tax break of on average £420,000. Those unreported capital gains represent a huge untapped pool of tax. There are so many issues facing the country, and that money could be used appropriately to lift many people out of poverty.
Members on Government Benches have expressed on many occasions concerns about abolishing non-dom status and a potential flight or mass exodus from the UK. However, recent interesting research by the University of Warwick found that only 0.3% of those affected would leave the country. That is fewer than 100 people in total, most of whom are paying hardly any tax under the current regime. My question to the Minister is: why is there so little breadth in what has been brought forward? This was an opportunity to completely abolish non-dom status, or, if the Government are not prepared to do that, certainly to apply minds in the Treasury to a far wider range of areas, which would have brought much-needed money into our coffers. It is a problem that the Government are really a bit lax when it comes to tax.
Victoria Atkins
I am delighted to answer the Opposition’s queries on non-domiciled taxpayers. Their stance is an interesting contrast to the Conservative party’s inclusive nature when it comes to wealth creation, and opening ourselves up to the rest of the world to encourage the best and brightest to come here and do business. I am interested to hear that the hon. Gentleman has something against film stars, singers and—dare I say it—movie stars who perhaps cross into the world of football. I will not name any taxpayers. But my goodness, I am sure he is proud of the fact that we have a leading film and creative industry in the United Kingdom, particularly on the outskirts of London. I have the great pleasure of meeting representatives of some of those industries from time to time; the excitement and the welcome they feel from the United Kingdom, partly because of the reliefs and support given by the Government, is really interesting to see.
Turning to the scheme itself, we want to have a fair but internationally competitive tax system, designed to bring in talented individuals and investment that will contribute to the growth of the economy. Non-domiciled individuals pay tax on their UK income and gains in the same way as everybody else, and they pay tax on foreign income and gains when those amounts are brought into the UK. They play an important role in funding our public services through their tax contributions. According to the latest information, non-UK domiciled taxpayers are estimated to have been liable to pay almost £7.9 billion in UK income tax, capital gains tax and national insurance contributions in 2021, and they have invested more than £6 billion in the UK using the business investment relief scheme introduced in 2012.
To put those numbers into context, £7.9 billion is just under half of what we spend on policing in England and Wales. They are extremely big numbers. When the Opposition put their plans forward, they do not address a significant risk, which we have looked into carefully. What happens if, by changing the rules and making ourselves less competitive, we start to turn away those very successful people?
The hon. Member for Ilford South talked about capital flight. I think he was referring to the research published by the London School of Economics and the University of Warwick, which suggested that abolishing the non-domiciled regime would lead to very little immigration—around 0.2%. That study looked at the particular response to the 2017 reforms. As colleagues will know, several policy mitigations that were put in place in 2017 reduced the migration impact of reform: protections for non-resident trusts, the option to revalue non-UK assets at their 5 April 2017 valuation for CGT purposes and the ability to rearrange offshore investments to make it easier to bring money to the UK. Abolishing the remittance basis outright would be expected to have a much more significant behavioural impact in the absence of any policy mitigations, so the headline result of the external research may underestimate the migration response.
Samantha Dixon (City of Chester) (Lab)
This morning we discussed the Office for Budget Responsibility’s statement that the Bill will drag an extra 1.2 million people into the higher rate of tax, so will the Minister explain, in plain English, her reluctance to include non-domiciled taxpayers?
Victoria Atkins
They are taxed, as UK taxpayers are taxed, on their UK income—that is the point. The hon. Lady will know that the threshold for the additional rate was lowered from £150,000 to just over £125,000 at the autumn statement. That will apply to the UK income tax of those who are earning here in the UK. That is precisely the point; the difference relates to their foreign income. We want to help these very mobile and very successful people who work for banks or in the movie and sporting worlds, and we want to help those who work for the various businesses to which the hon. Member for Ilford South referred to help us to build the best tech industry that we can possibly have. We want them to help us to build incredible life sciences solutions.
If the hon. Member for City of Chester took a bit of time to talk to some of the individuals involved in the life sciences industry—that golden triangle between Cambridge, Oxford and London—she would know that what they do is genuinely inspiring. Why on earth would we not welcome people from overseas to help us in that? That little golden triangle has more tech companies in it than any place on the planet other than New York and Silicon Valley. If those places are our competitors in the tech industry, we are doing very well indeed. We want to encourage more of them to come to our country to help us to build that.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. The Opposition already seem to have spent the money from this claimed non-dom bonus a dozen times over, by my count. The Minister referred to the University of Warwick research, which I have referred to during various debates in the main Chamber. If the Treasury analysis is that that research—that 0.3% figure—is misguided, is it not the case that the magic pot of money that the Opposition keep spending does not actually exist?
Victoria Atkins
My hon. Friend brings a particular fervour to his intervention, if I may say so. I absolutely want very high-earning people to pay their proper taxes here in the United Kingdom, but we need to stay competitive, which is why we look at other countries around the world. Our competitors have regimes that give tax advantages, or they are more careful with the tax that they apply, to people who are so highly mobile. I want to bring those people to the UK and get them to pay UK taxes on their UK earnings.
Rob Butler (Aylesbury) (Con)
It is a pleasure to serve under your chairship, Ms McVey. Is it not also the case that attracting those very mobile people to this country means that they then spend money in this country? Some of that is on VAT—a further tax—and much of it is on employing other people, who then pay tax themselves, so the very presence of such very mobile people has a multiplier effect on tax.
Victoria Atkins
I completely agree: there is a ripple effect from those individuals. Conservative Members understand the concern that such people should pay their taxes fairly and contribute to our economy, which is precisely why it is a Conservative Government who act on loopholes when they emerge and are drawn to our attention, as we have done in the Bill but also in 2017. There is a delicate balancing act to ensure that we remain internationally competitive.
Sam Tarry
It is important that we are clear that non-dom status is mostly used by British citizens who were born in this country but have decided to not pay their taxes in this country, even though they live here for the majority of the year—[Interruption.] It is true. It is a hangover from the colonial era, when people used to have sugar plantations. Look at the history of non-dom status; it is hundreds of years old. It has not just been cooked up by the Treasury in the last five minutes, has it? It was a way of allowing people to own different things around the world—sugar plantations in the Caribbean are one example—and have that money come back to the UK without paying the taxes. It was a perk, essentially, for those people.
If Conservative Members do not believe me, they should go and look at the history. They are in government. They should know these sorts of things. The fact is that non-dom status is used as a tax dodge. The point is about fairness. Of course we want to encourage the brightest, most talented people to come to this country, make a life here and contribute, be that in life sciences, tech companies, the NHS or whatever, but I strongly suggest to the Minister that she should have a firm conversation with the Home Secretary about putting in place a progressive migration policy, because that is the problem here.
This is about taxation and people paying their fair share. Some 77,000 people—British residents, living most of the time in this country—use the non-dom scheme to not pay taxes—
Victoria Atkins
The hon. Gentleman is trying to tempt me away from the scope of the Bill, and I will resist that temptation. I gently ask him to help me—perhaps afterwards—to understand the evidence he has to support his claim that the overwhelming number of non-dom claimants are British residents. We just need to be a little bit careful about definitions.
Let me move on to the questions from the hon. Member for Ealing North. The share exchange legislation provides a relatively simple way for shareholders to avoid tax. It applies only to individuals. If individuals use artificial arrangements to prevent the legislation from applying, they will need to consider whether other anti-avoidance provisions apply.
The hon. Member asked about the difference between the legal owner and the beneficial owner. Again, the legislation applies to shares held on behalf of the individual in a nominee, or bare trust arrangement. Section 60 of the TCGA treats shares as being issued to the beneficial owner where there is a bare trust or nominee arrangement in place.
On public country-by-country reporting, we remain firmly committed to a multilateral approach, but it is important that such a requirement applies consistently across domestic and foreign headquartered multinationals to avoid distorting decisions on where companies decide to locate.
James Murray
The Minister quoted some figures that we have heard before, and I think it is worth the Committee having the context for them. The Minister tried to defend non-dom tax status by claiming that non-doms paid £7.9 billion in UK taxes last year. As always, that argument entirely misses the point, because we are talking about the £3.2 billion of tax that non-doms avoid paying in this country every year.
The Minister also repeated her line about non-doms having invested £6 billion in investment schemes since 2012, but I am sure the Committee would want to know that that ignores the fact that only 1% of non-doms invest their overseas income in the UK in any given year. In fact, non-dom status discourages people from bringing money into the UK to invest. We have set out the Labour party’s position very clearly, explaining how we would have a modern, short-term scheme for temporary residents.
Finally, the Minister referred to the potential behavioural impact if non-dom status were abolished. She was quick to dismiss some of the independent findings of the LSE and Warwick, made on the basis of HMRC data. If she is so confident that the behavioural difference will be that different, will she publish the Treasury research, so we have it in the public domain?
Victoria Atkins
We have to make judgments on how we ensure that the UK economy is not only internationally competitive but attractive to other countries. We are happy to make the point that non-domiciled taxpayers can make a valuable contribution to the United Kingdom, but of course we want them to pay—we require them to pay—UK income tax, and so on, on their UK income and remittances. We want to ensure that that system is in place.
On the behavioural aspects, we looked very carefully at the University of Warwick report, but what worries us is that there does not seem to be a recognition of the mobility of such people. They are able to live and work anywhere in the world. We do not want to put their living here at risk. Let us not forget that the hon. Gentleman is prepared to put at risk £7.9 billion. That is a risk we are not prepared to take.
James Murray
I will focus on the question in my previous intervention. The Minister was keen to rubbish the LSE and Warwick analysis based on HMRC data. Will she—
James Murray
Thank you, Ms McVey. The Minister was quick to rubbish the conclusions of the LSE and Warwick on the behavioural impact of abolishing non-dom status, even though the research was thorough and based on HMRC data. The question I asked the Minister was whether she will publish the Treasury analysis that she is relying on to rubbish that LSE-Warwick conclusion.
Shaun Bailey (West Bromwich West) (Con)
On a point of order, Ms McVey. My hon. Friend the Minister did not say that. Is it in order for Members of this House to misrepresent the words of other Members? I am pretty sure that “Erskine May” is clear, but I would be grateful for your guidance. I apologise for jumping in.
The Chair
We cannot say “misrepresentation”, but I would like the Minister to give a full response to what was said.
Victoria Atkins
We have been through this on many occasions. We are perfectly entitled to receive advice. We have come to the conclusion that non-domiciled status is right for ensuring that we remain internationally competitive. I am not rubbishing anyone, or anything of that nature, and it is improper to say that I am, but we do have reasonable concerns. We have to look at the evidence base. The one thing that we are not prepared to do is to put at risk that £7.9 billion going into the UK economy.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clause 37 ordered to stand part of the Bill.
Schedule 5 agreed to.
Clause 38 ordered to stand part of the Bill.
Clause 39
Payments to farmers under the lump sum exit scheme etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 40 stand part.
Government amendments 6 and 7.
Clause 41 stand part.
Government amendment 8.
Clauses 42 and 43 stand part.
Victoria Atkins
Clause 39 makes changes to clarify that payments from the lump sum exit scheme are treated as capital receipts. It aims to set clear and fair rules regarding the taxation of the scheme. Clause 40 creates a fairer system for assessing capital gains when an asset is disposed of under an unconditional contract. Clause 41 makes the capital gains tax rules fairer for spouses and civil partners in the process of separating or divorcing. Clause 42 makes changes to ensure that individuals who pay tax on carried interest are able to better align the time a tax liability arises in the UK with that of other relevant jurisdictions, and therefore claim double taxation relief where it is due. Clause 43 makes changes to ensure that roll-over relief and private residence relief work as originally intended for members of limited liability partnerships and partners of Scottish partnerships.
I will go through the changes in detail. Clause 39 clarifies the tax treatment for around 2,700 sole trader farmers, farming partnerships and farming companies who have received, or will receive, payments from the lump sum exit scheme. That will give certainty to those receiving such payments and remove the need to consider individual cases.
Clause 40 modifies HMRC’s four-year assessment powers so that, in certain circumstances, they will operate by reference to the tax year or accounting period in which the asset is conveyed or transferred. For capital gains tax, those circumstances are where the conveyance or transfer takes place six months after the end of the tax year in which the contract is entered into. For corporation tax, the date is one year after the end of the accounting period for the contract.
Capital gains tax rules provide that the transfer of assets between spouses and civil partners is made on a “no gain/no loss” basis. When spouses or civil partners separate, no gain/no loss transfers can be made only in the remainder of the tax year in which the separation occurs. Clause 41 extends no gain/no loss treatment until the end of the third tax year after the year the parties ceased to live together, the date on which the parties’ marriage or civil partnership ended, or the date when the parties entered into a divorce or separation agreement. No time limit applies to transfers of assets that form part of a formal divorce or separation agreement. The clause also makes changes to the rules that apply to the sale of the former family home. The other change applies to individuals who have transferred their share in the former family home to their ex-spouse or civil partner and who are entitled to receive a percentage of the proceeds when it is eventually sold.
Amendment 6 corrects an issue with time limits. Where a divorce agreement has not been entered into, spouses and civil partners should have up to three full tax years in which to transfer assets between themselves on a no gain/no loss basis. As it is worded currently, clause 41 provides a day short of that, so we want to correct that. Amendment 7 clarifies that the new rules also apply to divorce agreements entered into after spouses and civil partners have ceased to be married or have ended their civil partnership.
The changes made by clause 42 will introduce a new elective basis of taxation for carried interest, a type of reward for asset managers. For those who opt to use the elective basis, it will tax carried interest in the UK at an earlier time than under the current rules. That will mean that individuals receiving carried interest may be able to claim double tax relief in other jurisdictions more easily, avoiding disproportionate tax outcomes. That will help to remove barriers to international trade and support the health of the asset management sector while accelerating, but not reducing, UK tax.
Amendment 8 seeks to refine the calculation of carried interest for the purposes of clause 42. It modifies the calculation methodology so that it works in circumstances where managers are entitled to more carried interest if investors receive fund profits earlier. That means that the measure will better deliver in practice the opportunity to claim relief from double taxation on carried interest, as intended.
Clause 43 will ensure that roll-over relief and private residence relief work as originally intended for members of limited liability partnerships and partners of Scottish partnerships, by clarifying that the reliefs are available to them when an exchange of interest in land or private residences takes place, in the same way as they are when the land is held by the individual members or partners.
This group of clauses will provide greater certainty, consistency and fairness in the taxation of chargeable gains. I therefore commend them to the Committee.
James Murray
Clause 39 clarifies the tax treatment of payments received under the lump sum exit scheme, saying they will be treated as capital receipts rather than income, provided that the eligibility criteria are met. As we know, the lump sum exit scheme was designed to make it easier for farmers who wish to retire or to leave the industry. The basis for the scheme was considered in 2021 by a consultation that we understand received 654 responses.
We will not oppose the clause, which is specifically designed to provide clarity on the tax treatment of payments made under the scheme, but I wish to use this opportunity to ask the Minister for more context around the clause and, in particular, for details on the operation of the scheme and what comes next.
I understand that a total of 2,706 farmers made an initial application to the lump sum exit scheme by the deadline of 30 September 2022. Of those claims, 511 were withdrawn or rejected. Will the Minister tell us what analysis there has been of why those 511 claims were withdrawn or rejected?
I am conscious that when the draft Agriculture (Lump Sum Payment) (England) Regulations 2022, which relate to this matter, were debated in March last year, concerns were raised, on behalf of organisations including Sustain, that the scheme could be open to instances of fraud. Will the Minister confirm whether any of the 511 claims that were withdrawn or rejected were in fact rejected on the basis of fraud? If she does not have that information, perhaps she can at least provide us with the detail about what anti-fraud efforts have been made in relation to the scheme and how successful they have been.
I understand that the Department for Environment, Food and Rural Affairs is conducting five pilots aimed at supporting new entrants into farming, and I would be grateful if the Minister updated us on how those pilots are going and any early lessons that she may be able to share with us.
Clause 40 modifies the operation of the period in which a person must notify HMRC that they are chargeable to capital gains tax or corporation tax, and the time limits for assessing chargeable gains and claiming allowable losses, when an asset is disposed of under an unconditional contract.
When an asset is disposed of in that way, its date of disposal for capital gains purposes is treated as being the date on which the contract is made and not the date on which the asset is conveyed or transferred, if this is different. HMRC subsequently has four years from the end of the tax year or accounting period in which the disposal is treated as taking place in which to assess any tax that is due. Similarly, there is a four-year time limit for making loss claims. If there is a long gap between the disposal contract being entered into and it being performed, that can result in HMRC and taxpayers having little or no time in which to make a tax assessment or a claim.
We recognise that the measure removes potential avoidance opportunities by ensuring that HMRC can assess tax due in circumstances in which more than four years pass between an unconditional contract being entered into and an asset being conveyed or transferred. It also provides the taxpayer with a safeguard by allowing a corresponding period to claim allowable losses. We will therefore not oppose the clause.
As we heard, clause 41 makes changes to the rules that apply to transfers of assets between spouses and civil partners who are in the process of separating. It provides that they be given up to three years in which to make a no gain, no loss transfer of assets between themselves when they cease to live together, and unlimited time if the assets are the subject of a formal divorce agreement. It also introduces special rules that apply to individuals who have maintained a financial interest in their former family home following separation and that apply when that home is eventually sold.
Essentially, the clause seeks to make fairer the capital gains tax rules that apply to spouses and civil partners who are in the process of separating. It gives them more time to transfer assets between themselves without incurring a potential charge to capital gains tax. No gain, no loss treatment is currently available only in relation to disposals made in the remainder of the tax year in which the spouses or civil partners cease to live together. After that, transfers are treated as normal disposals for capital gains tax purposes. The measure extends the time available to give separating couples at least three years to make no gain, no loss transfers between themselves for capital gains tax purposes.
It is worth noting that the “Background to the measure” section of the Government’s policy paper on this matter refers to the Office of Tax Simplification and its consideration of how the capital gains tax rules apply to individuals who separate and divorce. The Government responded to the Office of Tax Simplification recommendations by agreeing that the no gain, no loss window on separation and divorce should be extended, and that is what the clause implements.
There is at the very least something ironic about a Government who use one clause of a Finance Bill to implement a recommendation of the Office of Tax Simplification and another clause of the same Bill to abolish that institution. As the Chartered Institute of Taxation has pointed out, the changes to be made by the clause are a result of an Office of Tax Simplification report. In fact, they are the third recommendation from that report to be implemented: it also recommended an increase in the notification period for the disposal of residential properties from 30 days to 60, and the incorporation of capital gains tax into a single customer account.
Will the Minister offer her views on that when she responds, and set out how the Government reconcile the apparent worth they seem to attribute to the Office of Tax Simplification, as evidenced by their decision to implement its recommendation in clause 41, with their decision to scrap it later in the Bill?
Victoria Atkins
On amendment 8, I had read out that it seeks to refine the calculations of carried interest for the purposes of clause 42. It modifies the calculation methodology so that it also works in circumstances where managers are entitled to more carried interest if investors receive fund profits earlier. That will mean that the measure will better deliver in practice the opportunity to claim relief from double taxation on carried interest, as intended.
James Murray
I apologise to the Minister for missing her comments about Government amendment 8 and remind her that I would like to know whether the amendment, if it is passed, will have any effect on the overall Exchequer impact of the measure.
Victoria Atkins
I will come to that later.
The hon. Gentleman should send his questions about the farmer scheme to DEFRA, which is responsible for the Rural Payments Agency, which operates the scheme. He will know that we are confining ourselves to the tax implications of the scheme, so he ought to direct his questions there.
The hon. Gentleman asked about the Office of Tax Simplification, and that debate awaits us in our next day of consideration in Committee. I will not trespass on those deliberations, but we are in fact going further than the OTS’s recommendation, as we consider that that will give a fairer outcome to the parties involved in complex separation and divorce proceedings. We received representations that the OTS’s recommendations did not go far enough and we wanted to address the issues about the former family home that, for many divorcing and separating couples, is their main asset. We want to try to relieve the pressure during what can be a very upsetting and emotional time for the people involved and to try to ensure that they have time to resolve important family disputes.
In relation to carried interest being taxed as income, depending on the circumstances carried interest can be subject either to income tax rates or to the higher capital gains tax rate of 28% for higher and additional rate taxpayers. This is a balanced approach and one that is followed by comparable jurisdictions. We are supportive of the wider role and importance of the asset management sector. Amendment 8 has no impact on clause 42; it is designed to make the measure work as intended.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40 ordered to stand part of the Bill.
Clause 41
Separated spouses and civil partners
Amendments made: 6, in clause 41, page 32, line 36, at beginning insert “on or ”.
This amendment ensures that the inserted subsection (1C) applies to disposals made on the days mentioned in paragraphs (a) and (b) of that subsection as well as before those days.
Amendment 7, in clause 41, page 33, line 8, after “etc)” insert—
“, but as if, in subsection (2)(a), after ‘partner’ there were inserted ‘, or former spouse or civil partner,’”. —(Victoria Atkins.)
This amendment clarifies that the inserted subsection (1D) applies in relation to disposals made after A and B have ceased to be married or civil partners.
Clause 41, as amended, ordered to stand part of the Bill.
Clause 42
Carried interest: election to pay tax as scheme profits arise
Amendment made: 8, in clause 42, page 34, line 40, at end insert—
“(5A) Where—
(a) distributions were made by the scheme to external investors before the relevant tax year, and
(b) the timing of those distributions affects the amount of carried interest that actually arises to A,
the amount of carried interest to be presumed to arise in the circumstances mentioned in subsection (5) is to reflect the fact those distributions were made before the relevant tax year.
(5B) But if reflecting that fact would lead to a presumption that an amount of carried interest had arisen before the relevant tax year, any such amount is to be presumed to arise in the relevant tax year.” —(Victoria Atkins.)
This amendment secures that the amount of carried interest that is presumed to arise in the hypothetical situation that determines the amount of the charge properly reflects prior distributions to investors.
Clause 42, as amended, ordered to stand part of the Bill.
Clause 43 ordered to stand part of the Bill.
Clause 44
Meaning of “alcoholic product”
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 6 be the Sixth schedule to the Bill.
Clauses 45 and 46 stand part.
Clause 49 stand part.
The Exchequer Secretary to the Treasury (Gareth Davies)
It is a great pleasure to serve under your chairmanship, Ms McVey. Clauses 44 to 46 and 49 introduce part 2 of the Bill, which delivers on the Government’s commitment to reform alcohol duty. Clauses 47 and 48 were debated in the Committee of the Whole House, which accepted that they should stand part of the Bill. The clauses change the structure of alcohol duty by creating a standardised series of tax bands based on alcohol strength.
At Budget 2020, the Government announced that they would take forward a review of alcohol. This legislation is the result of that review and makes changes to the duty structure for alcohol, moving from individual product-specific duties and bands to a single duty on all alcohol products and a standardised series of tax bands based on alcohol strength. In making these changes, the Government aim to support public health, encourage innovation and ensure that the duty system reflects modern drinking practices.
Clause 44 sets out what is meant by “alcoholic product” and points to definitions in schedule 6. Clause 45 explains the meaning of alcohol strength and gives HMRC the power to make regulations about how strength is to be determined for duty purposes. Clause 46 gives His Majesty’s Treasury the power to amend the categories of alcohol product and treat products as falling within a certain category, even though they may otherwise have fallen in another. Clause 49 explains when excise duty on alcohol is payable, how the amount is determined and how it is paid.
The changes made by the alcohol duty clauses are expected to impact up to 10,000 businesses that produce alcohol, import alcohol or supply it wholesale. This impact will be down to changes in how they calculate the amount of duty that is due on their products. The entire alcohol reform package will cost £155 million in 2022-23 and £880 million across the scorecard period.
To conclude, the clauses and accompanying schedule form an essential part of the Government’s ambitious reform of alcohol duty and will modernise the tax treatment of alcohol. I commend the clauses and schedule to the Committee.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to serve with you in the Chair, Ms McVey. I wish you and Committee members a good afternoon. I take this opportunity to formally welcome the Minister to his new post. I am looking forward to this afternoon’s discussion, which I hope continues to be as productive as this morning’s was.
The clauses are in part 2 of the Bill, on alcohol duty. As the Minister said, clause 44 and schedule 6 introduce the term “alcoholic product” and set out what it means. The term is defined as spirits, beers, ciders, wines and any other fermented products if they have an alcoholic strength of more than 1.2%. Schedule 6 provides a definition for each of the categories I just listed.
The clauses introduce the new alcohol duty regime, which was touched on in the Committee of the whole House. In that debate, I made it clear that the Labour party agrees with the principles behind the alcohol duty review. Indeed, we want to see an alcohol duty system that is simpler and more consistent, while recognising that there is a balance to be struck between supporting businesses and consumers and protecting public health—as the Minister mentioned—and retaining a source of revenue for the Exchequer.
The clauses are administrative in detail so we will not oppose them, but let me lay out some of our underlying concerns about messaging and decision making, which will drive Labour’s scrutiny of the clauses. The Committee may remember that the Government announced a call of evidence on potential alcohol duty reform way back in October 2020. The aim of the review was to make the system
“simpler, more economically rational and less administratively burdensome on businesses and HMRC”.
But since then businesses have seen indecision, U-turns and delays.
The Government’s response to the alcohol duty consultation was published in September 2022, just before the chaotic Tory mini-Budget that crashed the British economy. In that mini-Budget, the then Chancellor announced a freeze on alcohol duty that was due to come into place in February 2023. The new Chancellor then scrapped the planned freeze in October’s autumn statement.
Businesses were scrambling to get their heads around the changes, and some scrapped product lines and slimmed back orders, losing out on the revenue they would expect to see in the run-up to Christmas. The situation has been reflected in many conversations that I have had with businesses up and down the country. I am sure it has caused real distress and difficulties for businesses involved in the supply chain—whether in manufacturing or hospitalities—in the constituencies of all Committee members.
Then, in December, the Government announced a screeching halt and another U-turn. They decided that the freeze was back in place and would last until August 2023. This caused a sigh of relief among businesses facing uncertainty, but it was too late to undo the damage inflicted on their balance sheets. We all know a pub that is facing closure as soaring inflation becomes unmanageable, or perhaps a small brewery that employs local people and has now had to reconsider its expansion plans. Such businesses desperately need certainty, so I hope that the Minister can confirm today that there will be no further U-turns or changes.
The new duty regime will see duty rates adjusted in line with inflation and moved to a system that links them to the ABV—alcohol by volume—of drinks. Clause 45 sets out how alcoholic strength is to be measured and understood, and provides for HMRC commissioners to make regulations on determining the strength of alcoholic products. Alcoholic strength, otherwise known as ABV, is what it says on the tin: the proportion of alcohol contained in a product’s total volume, expressed as a percentage. It is calculated while the product is at a temperature of 20°C.
Dame Angela Eagle (Wallasey) (Lab)
I take this opportunity to welcome the hon. Member for Grantham and Stamford to his new position as Exchequer Secretary to the Treasury. I am told that this is his first Committee as a Minister. I trust that he has been having sleepless nights about it in the run-up, and that he has had his advisers put every size of bottle and every alcohol stamp on his desk, so that he could get to understand how the system works.
Dame Angela Eagle
Of course not; otherwise, I am sure the Minister would be in a much worse situation than we find him in today. However, we will make that judgment after he has finished answering our questions. I genuinely welcome him to his position. It is a fantastic job, and he will be fascinated by it. He will wake up suddenly to realise that his job is to tax all vices, and how interesting that can be.
The Minister is inheriting a completely different regime of alcohol taxation from the one that is about to make an exit. As he heard from my hon. Friend the Member for Erith and Thamesmead, in principle, the Opposition are not opposed at all to the changes, but although there is that agreement, there is an awful lot of detail, potential issues and problems. He will find that definitional issues are not always easy, not least because if tax and duty are to be based on alcohol by volume, the manufacturers will switch the volumes around to get from one band into another. I am interested, philosophically, in what he thinks the right banding is to prevent too much of that.
The public policy reason for having that kind of duty system is, I presume, to persuade people gently that if they are to drink alcohol products with a higher percentage of alcohol in them, they will have to pay more tax, because in general higher-alcohol products are thought to have a greater effect on health than products with less alcohol. That was always the reason, philosophically, for moving to such a system. The Minister will find that, at the margins, manufacturers will try to ensure that their products are in a lower rather than a higher band, although some of the most glorious alcoholic beverages cannot begin to do that. I am thinking of spirits, such as whisky, which are much higher in alcohol.
If we look at the reaction of business and manufacturers to this change, there seems to be an equal division between those with higher alcohol by volume percentages, who find themselves in the higher-taxed bands, and those in the lower-tax bands, such as beer manufacturers. There is an inverse relationship between manufacturer satisfaction and where they are in the ABV bands. The beer and cider manufacturers are basically happy, whereas the wine and spirit manufacturers are less happy. Presumably the Minister will, if he has not already, have them in his office, making it quite clear to his face precisely what they think about that.
Issues other than definitional ones will come to bear on the new system, which will come into being on 1 August. I assume the entire system and HMRC are ready for that; it is a big change. The Minister is presumably confident that when 1 August comes along, the system will come into place seamlessly, and as the old system exits, the new system will appear. I assume he will confirm today that he is more than confident that this large change will come off without any problems. Obviously, we eagerly await his reassurance that there will not be some disaster as the new system comes in.
What, if any, work has been done on the implications for our export trade of changing the way we tax alcohol products? Obviously, countries have different ways of categorising products for tax purposes. I seek reassurance our deviating from a system that used to be EU-wide will not have any deleterious effect on our capacity to export what are often well-known products. I am thinking of not just Scottish whisky—we know how important that industry is to the Scottish economy, but other well-known products associated with this country, which we see when we are on holiday abroad. I assume that he is happy with that.
The OBR has said that it expects alcohol revenue to be £13.1 billion this year. Again, I assume the Minister is confident that the changes will not have an unpredictable effect on alcohol revenue. The OBR expects that to rise to only £15.8 billion by 2027-28. Given that we will have a 10.1% increase—I assume that will happen on 1 August, when the uprating happens—that seems like quite a small amount of increased revenue. I note the uprating is by retail price index when that suits the Government, because it means that they get more revenue, but we learned from our earlier conversations that they link by the consumer prices index when indexing something that gives money out. RPI makes some sense, but I just note that in passing.
Will the Minister talk about the transitional arrangement? There is quite a lot of worry in the trade about certain products that do not qualify for wine industry support. The more general rate is meant to be a transitional arrangement, lasting for the 18 months before the different ABV levels are brought it, in full force. Will he talk about draught relief? When I was Exchequer Secretary, there were big issues between the on-trade and the off-trade. It looks like the trade relief is trying to deal with some of the issues between the on-trade and the off-trade through tax. If I have understood correctly, it looks like there will be tax relief for the on-trade in order to balance out the price differential with the off-trade, and presumably to prevent people from loading up down the shop before they go into a pub. I assume it is an attempt to support the licence trade and the on-trade at the expense of the off-trade, given the “buy one, get one free” discounting that goes on in our supermarkets.
This may make the Minister very unpopular in the southern part of the country, but I note that there is still what is known as cider exceptionalism in the levels. Cider is taxed less than other alcoholic beverages, even though it is the same ABV as them. He might have an explanation for the cider exceptionalism. Now that we are not in the EU, he does not have the excuse that I had that: we could not do anything about cider exceptionalism because of EU rules. I note that he has decided to continue with cider exceptionalism. Perhaps he will tell us why. Does the Treasury prefer cider as a drink, or is there some terrible prejudice against beer that is being found out through this?
The changes introduce a huge range of different forms of taxation. Nobody objects to the principle, but there are quite a lot of anomalies. There are issues between the on and the off-trade, definitional issues, and issues surrounding revenue—why does it continue to be so flat, unlike the beer being taxed? I look forward to the Minister’s response, and I hope that he will not mind me leaping up if he says something that piques my interest, so that we can have a debate about it.
Kirsty Blackman (Aberdeen North) (SNP)
Who knew that a debate on alcohol would be so popular in this place? I will try to limit myself to the clauses that we are talking about, but I will mention a couple of general issues. In Committee of the whole House, we discussed our specific issues with rates. In particular, we discussed the concerns raised by the Scottish whisky industry. We gave our wholehearted backing to the amendment on the subject tabled by the right hon. Member for Orkney and Shetland (Mr Carmichael), because we had concerns about the changes and increases. However, as I said, that has already been discussed, so I will not major on that.
This is a direction of travel for which we have been calling for a very long time. We are pleased that the Government are moving towards applying differential tax rates based on the alcohol in beverages. I share the concerns raised just now about cider, and about exceptionalism for a certain type of product, rather than going simply by the alcohol by volume ratio. It would have been more sensible and fairer across the board to be more consistent.
It is pretty unusual for me to criticise explanatory notes, but those on this part of the Bill are not particularly good. They mention that 77 clauses relate to the changes to alcohol duty, but they give a very general explanation of what the clauses do, rather than a specific explanation of what each clause does. Therefore, we cannot see easily by looking at the explanatory notes what each clause is intended to do. For example, I will ask questions later about clause 87. The explanatory notes could have answered my questions, had an actual explanation been written in there, but the notes just say, “This is what we intend to do with the entirety of the alcohol regime,” rather than providing a commentary on each clause. I understand that a commentary on each clause would have been significantly more work, but presumably the Treasury has an idea of why it is putting forward each clause; it would not have cost it too much to expound on that in the explanatory notes.
Gareth Davies
That was an extensive display of preparation and reading, and quite right too, because that is exactly what we are here to do—scrutinise the Bill. Let me try to answer some of the many points that were raised in the three speeches. First, let me thank Opposition Members for their very generous and kind words. It is a great pleasure to serve in this position in the Treasury.
First out of the gate, let me say that the reforms were extensively consulted on; a lot of the comments related to that. As was pointed out, the reforms were first mentioned in 2020. The hon. Member for Wallasey is quite right: one of my first meetings was on this subject. Engagement with industry is paramount, and that is an ongoing process. Many in the various industries affected by the reforms very much welcome the public health focus that is driving this significant change. Many also welcome the simplification that we are bringing in across the board, and the fact that we are correcting several inconsistencies. I was asked by Opposition Members to give several examples. I can do that. One that springs to mind is the fact that sparkling wine pays 28% more duty than still wine, yet has significantly less or the same alcohol content. The driving principle behind the reforms is that the more alcohol in a product, the more tax that the producer pays. That is very clear for businesses to understand.
We were asked at the beginning about our support for businesses, and were told that businesses require certainty. I completely accept that, and we are providing it with the reforms. This is a massive simplification of our tax system for alcohol, and it builds on all the support that the Government have provided through covid and the energy crisis, as hon. Members will be well aware.
Let me try to rattle off a couple of quick responses to the hon. Member for Wallasey. I was asked about the differences in banding and how certain categories of alcohol can fall into different bands. That is true of spirits; Scotch whisky is required to be over a certain level of alcohol, but cocktails in a can and other items that I am aware of are lower in alcohol content, and so will have a lower tax requirement. That is very pertinent to businesses that have a portfolio of different products in their range.
The question about HMRC readiness is absolutely fair, and we are very confident that the processes have been put in place and businesses are ready to adapt to the new system. As I say, it is based on an extensive programme of consultation and engagement. The hon. Lady asked about exports. They are not subject to alcohol duties, although we are aware of the importance of exports to our alcohol industry. That is a live discussion that we have with the Scotch whisky industry all the time.
Let me address the point about the wine easement, which also relates to the question that the hon. Member for Aberdeen North asked about engagement with industry and others. There is a unique circumstance involving wine that comes from fresh grapes: the alcohol content changes by season, according to seasonal factors. That is different from fortified wine, which involves a more artificial process in which spirits are put into the wine to achieve a specific alcohol content. As part of the consultation that I mentioned, we listened to the wine industry, and for 18 months we have put in place a transitional arrangement for still wine of between 11.5% and 14.5% derived from fresh grapes to enable the industry to transition accordingly.
The hon. Member for Wallasey asked about draft relief. If she will forgive me, that was fully covered in Committee of the whole House, but she is right that it will benefit drinkers of pints in a pub over supermarkets. Draft relief applies to all alcohol below 8.5%. It is something that we are doing in support of beer drinkers and to support our community pubs, which are a vital part of all our communities.
Finally, I will just say that cider is also subject to the general principle that we seek to adhere to—namely, that the higher content of alcohol, the more cider producers will pay. Producers of super-strength ciders above 8.5% will pay more duty, but those of fruit ciders will pay significantly less. At the moment, on certain fruit ciders that are not apple or pear cider, producers pay two to three times the amount of duty. The outcome of these reforms will be a range of differential impacts for the cider industry. I will always support the cider industry, because it is incredibly important to the south of our country, but also to those across the country who enjoy drinking cider in the pub or at home.
Dame Angela Eagle
The Minister talked about simplification, and changing the system to make it easier for people to understand often brings important benefits. However, the reliefs that are coming in complicate it again. Is he satisfied that he has the right balance in extending the reliefs to the new simplified system, particularly the draft relief and the transitional relief?
As the person who brought in the small brewers relief, I have a certain attachment to it, although we will not be talking about that. What revenue does the Treasury believe these reliefs will rob it of, and does he think he has the right balance in imposing a more complicated relief-based system on his simpler system?
Gareth Davies
It is a fair question. We are seeking to simplify the entire system of alcohol taxation, and in the round that is broadly what we are doing. However, we are conscious that certain sectors are under acute pressure—smaller cider makers may have particular vulnerabilities to some of these reforms, for example, and we are mindful of that.
However, we are still applying the principle that I have discussed: the higher the alcohol content, the more tax will be paid. As I mentioned, the wine easement is a reflection of the particular and unique circumstances that I heard about from the wine industry. That is a transitional arrangement, not a permanent reform; overall, we are seeking to simplify the system.
Abena Oppong-Asare
I thank the Minister for his explanations so far. I want to get clarification on a few points. As I mentioned, clause 46 and schedule 6 have been drafted to allow the reclassification of categories. Is any guidance being drafted at the moment? Can the Minister give us more information about how the operation will be carried out to make sure that no issues are identified later? The legislation is not very clear.
To follow on from the points made by my hon. Friend the Member for Wallasey, extra work will be given to HMRC as a result of this. I know that the Government have done work on the issue for some time, but I would like reassurance that adequate processes are in place. How much resource has been allocated to ensure that this is carried out? There will be extra work for HMRC to make sure that the alcoholic strength regulations are determined. It is important that we know whether there have been issues for HMRC in delivering because it has been under a lot of pressure. More information about that would be very helpful.
Gareth Davies
Let me answer the point about guidance. I assure the hon. Lady as well as the hon. Member for Aberdeen North that guidance will be issued very shortly. The hon. Member for Erith and Thamesmead will be able to review that and it should answer a lot of the questions that she has just asked.
Let me repeat what I said about HMRC. The organisation has some incredibly hard-working staff who I have had the pleasure of meeting just in my first two weeks. As a Treasury, we have been preparing for this for quite some time. I have every confidence that our colleagues at HMRC are ready and waiting to implement the system. I have nothing further to add on this, so I urge that the clauses stand part of the Bill.
Kirsty Blackman
I have a brief comment about the guidance. I appreciate that a proportion of the stuff coming out is guidance so will not need to go through any parliamentary processes. However, some of the issues are to do with statutory instruments. Is the Minister satisfied that enough parliamentary time would be given for those, whether under the negative or affirmative procedure? Will they happen as quickly as possible? Clause 119 is about procedure and regulations. Will there be enough time for all that as well as for the less formal guidance coming through from HMRC?
Gareth Davies
We all take parliamentary scrutiny incredibly seriously and of course we will allow appropriate time for scrutiny of the Bill and all the guidance in the appropriate way.
Dame Angela Eagle
Given the newness and thoroughness of the changes that the Minister has outlined, and obviously extensively consulted on, I am presuming that the Treasury will also have a review process once the introduction has happened, so that it can look at how the changes have gone and whether further tweaks are necessary. Certainly, but not surprisingly, some aspects of the industry at the higher ABV end wish the transitional arrangements for wine to be extended beyond 18 months, as the Minister would expect. Is there going to be a review process? Could the Minister briefly outline the kind of time scales that are on his mind?
Kirsty Blackman
Does the hon. Lady share my concern that the post-legislative review scrutiny that is supposed to take place in Government Departments does not always take place—and does not always take place timeously? Does she also share my sense of thanks to the Treasury Committee, which does get hold of and scrutinise the post-legislative review guidance? I am hoping that, as part of the Treasury Committee, she will be keen for the review to take place and for the information to go to the Committee so that it can do the appropriate scrutiny of whether the legislation has achieved what was intended.
Dame Angela Eagle
I agree with the hon. Lady’s comments about the potential role of the Treasury Committee, although I am not the Chair—I am only one modest member. She might want to have a word with the current Chair to ask whether that is appropriate. We are clearly all interested and want the system to work effectively. We do not, however, want to see a sudden reduction in revenue, unless that is because people have started drinking less high-ABV products, and are out running and being very healthy all of a sudden. In that case, they are going to live longer and put much less pressure on our NHS.
Will the Exchequer Secretary give an outline of the Treasury’s thoughts on when it will do a review? Will he also bear in mind the balance between having changes to definitions and those detailed things that make up the essence of a system such as this, which are required by negative and affirmative procedures in this House, and guidance, which does not get to be looked at in the House? That would ensure that his welcome comments about respecting the rights of this House to effectively scrutinise how the system beds in and evolves in the future are realised.
Will the Exchequer Secretary give us an undertaking that he will bear in mind the right of the House to have appropriate scrutiny rights over some of those things—not just shove everything into guidance, which does not have to come before the House at all?
Gareth Davies
All taxes are always under review, as the hon. Lady knows. The Treasury Committee, of which we were both members, plays a vital part in the scrutiny process—of course it does. That process started when the Chancellor appeared before it, and carries on through the parliamentary procedures we are going through right now. The Treasury is unusual in that it has two fiscal events per year—
Gareth Davies
I was waiting for that.
The Treasury has two fiscal events in which the full House has the opportunity to scrutinise our decisions. That also gives the Treasury the opportunity to review existing rates and systems, which is what we are doing as part of the spring Budget.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Schedule 6 agreed to.
Clauses 45 and 46 ordered to stand part of the Bill.
Clause 49 ordered to stand part of the Bill.
Clause 61
Mergers: general provisions
Question proposed, That the clause stand part of the Bill.
Gareth Davies
Clauses 61 to 71 provide for transitional arrangements for small businesses that merge under the new small producer relief and provide definitions for terms used in the chapter.
The Government are committed to modernising and reforming alcohol duty. Part of the reform package is a new small producer relief for businesses that make alcoholic drinks of a strength less than 8.5% alcohol by volume. That will extend the benefit of progressive duty rates enjoyed by small brewers to the producers of other alcohol products. The provisions on mergers and acquisitions mean that small businesses that merge will not face a cliff-edge duty increase in the first year of the merger; instead, their duty rates will increase gradually over a three-year period. The clauses also include some general provisions around definitions for the purposes of the relief.
Clause 61 introduces the concept of a post-merger group, which is a company formed from the merging of two or more companies, and explains how each of the three years in the transitional period will be referred to. Clause 62 sets out the conditions which must be met for a newly merged business to qualify for the relief. Clause 63 explains what is meant by the “relevant production amount” during the transition period. Clause 64 explains what is meant by “post-merger amount”, which determines the level of relief available to newly merged businesses.
Clause 65 provides for termination of a transition period where the amount of alcohol produced by a post-merger group decreases. Clause 66 explains the treatment when another merger takes place during an ongoing transition period. Clause 67 explains the treatment of mergers involving more than two small producers at the same time. Clause 68 provides that that the transition period ends when businesses demerge. Clause 69 gives definitions of “production premises”, “production groups” and “connected premises” for the purposes of small producer relief. Clause 70 explains that the definition of “connected persons” for the purposes of the relief mirrors that in the Corporation Tax Act 2010. Clause 71 provides a table of expressions used throughout the small producer relief chapter.
Around 10,000 businesses in the UK produce alcohol, import alcohol or supply it wholesale. The clauses will help small businesses compete with larger businesses, such as multinationals, and support them as they grow. The entire alcohol reform package will cost £155 million in 2022-23 and £880 million across the scorecard period. These clauses and accompanying schedule form a key part of the Government’s ambitious alcohol duty reform and will support small alcohol producers to grow and thrive.
Abena Oppong-Asare
The clauses under discussion in this group form part of chapter 3 on small producer relief, as the Minister mentioned. I thought it would be helpful to remind the Committee that Labour introduced the small brewers relief in 2002, and we are proud of the effect it has had in supporting small brewers, creating the vibrant UK beer scene, and supporting British business. We therefore support its extension to other producers.
In the context of small producer relief, clauses 61 to 68 specifically deal with the regulations and provisions for when mergers take place. Clause 61 sets out general provisions, determining that a merger of two small producers is to be called a post-merger production group, and is deemed to be in a transition phase for the three years following the merger. Clause 62 introduces modified conditions to determine whether the premises of two small producers that newly merge are small production premises for the purposes of small producer relief. A merged small producer will be eligible for small producer relief if the adjusted post-merger account does not exceed the small producer threshold of 4,500 hectolitres and if, for each set of premises in the group, fewer than half of the alcoholic products produced on those premises in the previous year were produced under licence.
Clause 63 sets out that, in calculating small producer relief for a post-merger group, the adjusted post-merger amount is used for the “relevant production amount” as set out in section 59. Subsection (3) sets out that the exclusion in clause 58(c) does not apply to the premises in a merger transition year. The Minister will not be surprised that I want to ask why that is the case. I cannot find anything about the purpose of the subsection in the explanatory notes, and it would be helpful to get the background as to why it exists.
Clause 64 provides a definition of the adjusted post-merger amount, which is used to determine eligibility and calculate the rate of small producer relief for companies transitioning post merger. Clause 65 sets out that a merger transition period will end early if the total amount of alcohol produced on all premises by a post-merger group in the preceding production year is less than the adjusted post-merger amount for the current year.
Clause 66 lays out provisions for subsequent mergers of alcohol producers. If a second merger takes place, the producer is no longer considered to be in its merger transition period for the first merger. The second merger could be considered a new merger transition period if the eligibility conditions are met. On the other hand, clause 67 lays out provisions for simultaneous mergers, setting out which producers will be considered the “larger producer” and the “smaller producer” for the purposes of determining the small producer relief. Clause 68 sets out what happens when a production group demerges and the regime to be applied for demerged businesses looking to receive small producer relief.
As we know, clauses 69 to 71 provide some guidance on the interpretation of chapter 3. Clause 69 lays out definitions of the terms producer, production premises, group premises and connected premises. Production premises are premises where alcoholic products are produced, including premises outside the UK. Group premises are all the premises on which the same person produces alcoholic products. A production group includes the group premises and all connected premises. A producer is a person who produces alcoholic products.
Clause 70 states that two people will be considered to be connected persons if they meet the test contained in section 1122 of the Corporation Tax Act 2010, although HMRC’s commissioners can overrule that if they think it necessary. Finally, clause 71 provides a table of expressions used in the small producer relief chapter. These clauses are all administrative in purpose, and we will not oppose them.
Gareth Davies
I am very grateful to the hon. Lady for her comments. Let me start by acknowledging the success of small brewers relief. We have seen the number of breweries increase six times since its introduction, and I think we should applaud a good policy, wherever it originates. In fact, we are seeking to build on it by expanding its principles to the new small producer relief and extending it to all alcohol products under the parameters that she has outlined. There was a very specific point of clarification, which I am afraid I do not have to hand at the moment, but I am happy to set out in writing the detailed answers that she seeks.
Question put and agreed to.
Clause 61 accordingly ordered to stand part of the Bill.
Clauses 62 to 71 ordered to stand part of the Bill.
Clause 72
Exemption: production for personal consumption
Question proposed, That the clause stand part of the Bill.
Gareth Davies
Clauses 72 to 81 reproduce existing exemptions and reliefs from excise duty on alcohol products. These reliefs and exemptions will continue to operate in the same way as they do now. To reform the alcohol duty system, we are legislating for a restructured duty system and two new reliefs. To ensure that all primary legislation relating to the production and use of alcoholic products is contained in one place, existing exemptions and reliefs from alcohol duty unaffected by the reforms but still needed in the new duty system have been re-enacted in the Bill. The relevant legislation in the Alcoholic Liquor Duties Act 1979 and Finance Act 1995 will be repealed.
Abena Oppong-Asare
The group of clauses sets out circumstances in which producers will be exempt from alcohol duty. Clause 72 sets out that alcoholic products, except for spirits, produced by an individual for their own personal consumption are not subject to alcohol duty. Clauses 73, 74 and 75 provide for alcohol duty to be remitted or repaid when the alcohol is used for research or experiments, where the product is spoilt or unfit for use, and where alcohol was used in the production of qualifying food products or beverages, such as chocolate and vinegar.
The next part of the group of clauses concerns exemptions from alcohol duty for spirits. Clauses 76 and 77 set out that alcohol duty will not be charged on any spirits contained in imported medical products or in flavourings. Clause 78 sets out some circumstances in which a person may receive spirits without the payment of alcohol duty, including where spirits may be used for art or manufacture. Clause 79 provides for alcohol duty to be remitted on spirits contained in imported goods that are not for human consumption. Finally, clauses 80 and 81 set out a penalty regime for people who make unauthorised use of exemptions, such as by claiming the medical exemption for goods that are then not used for medical or scientific purposes.
We do not take issue with the exemptions, so will not oppose the clauses, but will the Minister lay out in more detail how clauses 80 and 81 will work in practice, and whether there will be a monitoring system to ensure that unauthorised exemptions are prevented?
Kirsty Blackman
Alcohol hand sanitiser is obviously not for human consumption, but is it considered to be a medical item and so exempt under clause 76(2), or to be not fit for human consumption and so exempt under clause 79? However it is considered, will the Minister clarify that it is exempt from alcohol duty? Many of us had not often used it prior to 2020, but these days it is a significant part of our lives. It would be a concern if it received an alcohol duty charge, because it is part and parcel of keeping us safe and ensuring that we stop any further spread of covid or anything else.
Gareth Davies
As I set out at the beginning, the changes are largely administrative. To answer the question directly, there is no change whatsoever in terms of how the provisions are operationalised; they are carried over. The whole point is to consolidate the legislation in one place. I think our alcohol taxation system dates back to 1643, and the last change was in the 1990s. A lot of the changes are administrative, and the hon. Member for Erith and Thamesmead should take assurance from that.
Abena Oppong-Asare
I appreciate that a lot of these clauses are administrative. In that case, is the Minister able to tell me whether there has been any work done on unauthorised exemptions? Has that issue come up, does he have data on it and is he confident that unauthorised exemptions are being prevented? Could he give more information about what schemes or measures may be put in place? I appreciate that the clauses are administrative, but there is nothing in them about how to ensure that the system is not being abused.
Gareth Davies
There are penalties already in place if a person uses products or carries out activities that are not approved. The hon. Lady should take my assurance that these are carry-over provisions that come with the protections that we already have in place. I really do not have anything more to add, other than the fact that what was in existence prior to this legislation is being carried over. To answer the specific question on hand sanitizer, it is exempt.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.
Clauses 73 to 81 ordered to stand part of the Bill.
Clause 82
Approval requirement: producers
Question proposed, That the clause stand part of the Bill.
Gareth Davies
Clauses 82 to 89 make changes to the approval and registration requirements for alcohol producers, ensuring that they are harmonised across all products. The new alcohol duty rates and reliefs will take effect from 2023, but the commencement of changes to approvals will come into force at a later date. The Government are committed to simplifying the current alcohol duty system, which is complicated and outdated. The clauses repeal and replace the Alcohol Liquor Duties Act 1979, as well as sections 4 and 5 of the Finance Act 1995.
The changes made by the clauses will standardise the approval processes for all alcohol producers, regardless of which alcoholic product they produce. Clause 82 sets out the requirement for a person to be approved by HMRC in order to produce alcoholic products. Clause 83 stipulates that an approval may cover multiple premises and product types, and that HMRC may vary or revoke an approval at any time. Clause 84 provides an exemption from the requirement to be approved for those who make alcoholic products for their own consumption, although that does not apply to spirits.
Clause 85 provides an exemption from the requirement to be approved for those who produce alcohol only for research and experiments. Clause 86 restricts the mixing of multiple alcoholic products except in certain circumstances. Clause 87 reproduces a section of the Alcoholic Liquor Duties Act 1979 with minor changes to update terminology. Clause 88 gives HMRC the power to make regulations regarding the administration and collection of alcohol duty. Clause 89 details the penalties and forfeiture that may apply if a person does not comply with the approval requirements. Overall, the clauses simplify and standardise approval requirements for alcohol producers.
Abena Oppong-Asare
We come to chapter 5 of the Bill and a group of clauses concerning regulated activities and approvals. Clauses 82 and 83 would require any person producing alcohol products to be approved by HMRC as a fit and proper person to do so, as determined by the HMRC commissioners. Clauses 84 and 85 provide exemptions from the approval process, so that a person may produce alcoholic products for their own consumption or for research into, and experiments in, the production of alcoholic products without needing approval from HMRC.
Clause 86 restricts the mixing of multiple alcoholic products, except in certain circumstances, such as if it is done in an excise warehouse and the mixing occurs before the duty point; the alcoholic products being mixed are all of the same type and strength; or the alcohol duty on each product has been paid and the resulting mixed product is to be consumed at the place where the mixing took place, such as a pub or bar. Clause 87 sets out that a person cannot mix water or any other substance with alcoholic products if the mixing is after the duty point, the mixed product is to be sold, and the resultant product would have attracted a higher amount of alcohol duty if the mixing were done prior to the duty point.
Clause 88 provides for HMRC to make regulations concerning the production, packaging, keeping and storing of alcoholic products; charging alcohol duty in reference to a strength that might reasonably be reached; relieving alcohol products from alcohol duty in certain circumstances; and regulating prohibition of the addition of substances and mixing. Before the Minister says that these are all largely administrative clauses, which I do not dispute, these seem like quite wide powers. I am interested to see that they will be subject to the negative procedure. Perhaps he can explain why that is the case?
Clause 89 sets out the penalties or forfeiture that can occur if a person fails to comply with clauses 82, 86 and 87, and any regulations made under clause 88, as we have just discussed. As we know, this is an administrative set of clauses laying out a reasonable approval and exemptions process, so we will not oppose it.
Kirsty Blackman
As I said both in the Committee of the whole House and earlier today, I have a number of questions about clause 87, which relates to the post-duty point dilution of alcoholic products. The Minister mentioned that all the exemptions, some of the technical language, and some of the definitions mentioned in this part and in the previous part are carried over from the Alcoholic Liquor Duties Act 1979 and the Finance Act 1995. I understand that, but the post-duty point dilution changes are relatively recent; they have not been in place particularly long. The clause replicates section 55ZA of the 1979 Act, which I think was added to it in the last few years in relation to concerns that were raised about the post-duty point dilution.
The clause relates to products such as Bacardi Breezers and WKD blue. Hooch was a drink that existed when I was first able to drink alcohol. Basically, it is things that are mixers, in bottles. It was a significant issue because they were effectively being taxed at the wrong rate because they were being charged duty in advance of the dilution. They would have been liable for more tax had they been taxed after the dilution rather than before it. They were being taxed on the basis not of the sold product but of the created product, which was very different. I understand the Government’s intention in introducing the measure, but because it is a relatively new one that is simply being replicated in the new regime, I wonder how much information the Minister has about how well the change has worked. Has it actually done what was intended?
I am slightly unclear about the Government’s intention in relation to the clause. From reading the Bill, it looks like the intention is that no mixing can take place: no other liquids can be added to spirits. If a company adds orange juice to vodka and sells it, the tax rate will not be lower. Have we seen in practice that companies are not mixing? Are they paying the duty at a different point in the journey rather than not creating these products anymore? What effects have the Government’s previous changes had?
Dame Angela Eagle
It is obviously important, when we get on to enforcement, that we are confident that HMRC is on top of this. The Minister was a bit coy about when these clauses will come into being, so perhaps he can explain that, given that they are quite important. They are about the fitness, rightness and properness of the characters out there producing alcohol, who must be properly registered by HMRC.
The Minister gave the impression that this is just a technical thing—that it is a hold-over from older laws dealt with in a more simplified and perhaps modernised way—but he was not very explicit about how it will be simpler or modernised. Can he give us some idea? Will it all be done online? Is there some modernisation such as that? If he can give us a handle on how the administration of the scheme will change, that might give us an idea of HMRC’s intention.
The Minister is about to introduce a new scheme, whereby the taxation of alcohol is based on the alcohol by volume level. That creates a completely different incentive for adulteration along the production process. HMRC’s decisions about which category of duty a product is in become important in terms of what tax is due. That creates new forms of incentives for fiddling. I am not saying that everyone in the alcohol industry, by definition, wants to fiddle and avoid tax, but there will be temptations along that line, given the new focus on alcohol by volume as a way of calculating what tax is due. That makes adulteration and fiddling potentially much more valuable for avoiding tax. It also means that HMRC has to be vigilant in protecting revenue from those taxes.
Will the Minister therefore say a little about enforcement? Given the new dangers around alcohol by volume and the approach to what duties are due, will HMRC beef up its enforcement regarding not only approved producers but checking along the production line when decisions are made on what tax will be due on the particular product being manufactured?
Gareth Davies
Let me respond to those questions in turn, but I will come to the post-duty point dilution last, if that is okay. I was asked about scrutiny in the first instance by the Labour spokesperson, the hon. Member for Erith and Thamesmead. The powers mirror those that we have already, and we are putting exactly the same procedures in place in the Bill, but I will outline, and give an example of, how the Government could use the powers.
The powers allow HMRC to make adjustments to the new reforms by regulation, if needed. It will have that flexibility, given the scale and novelty of the reforms. That is a sensible precaution to allow HMRC to make changes quickly if the reforms are not working as intended. Today, reviewing and tweaking as necessary have come up consistently. We are carrying over a lot of the legislation, and this is one power, in particular, that we are able to use.
The overarching policy is one of simplification and putting in place a simpler, streamlined process, where we have one single approval process for all alcohol products, to answer the hon. Member for Wallasey. She also asked about HMRC’s readiness and, as I have already said, I have full confidence in our colleagues at HMRC to be able to process the changes and—she also asked about this—to enforce the rules, regulations and laws we are putting in place. Furthermore, we are looking to deliver a digitised application process, which will happen at a later date, once robust systems are put in place. As she would rightly expect, we want to get that absolutely right for producers first.
Let me directly answer the question of post-duty point dilution. The hon. Member for Aberdeen North raised that with my predecessor in 2018, and she is a great champion of her constituent, who raised the issue with her. Following the question to my predecessor, we introduced post-duty point dilution specifically to address wine, I think. We now go further by extending the provisions to all alcohol products and not just wine. That goes back to the overarching principle that we are trying to impose a consistent, simplified approach to all alcohol categories. That is why we are doing it, and we believe that it is impactful. I have no anecdotes, but if I obtain any, I will certainly write to her.
Kirsty Blackman
I appreciate the logic behind the original measure and behind the change. Had I been the Minister, I would have been talking positively about the change and about the fact that we are moving from made-wine and wine to everything. He is right that this is a simplification and a good thing, and it will ensure that everyone ends up paying the right tax. He is playing it down a bit by saying that it was just about terminology changes. That is another of the issues I had with the explanatory notes, which could also have sung the praises of the changes that are being made, rather than simply describing them as minor terminology changes to tidy things up. This is a change in the application, and I am glad the Minister has confirmed and clarified that from the virtual Dispatch Box. That will make this change easier for people to understand when they read about it in concert with the Minister’s statements in Committee.
Gareth Davies
I always take constructive feedback on presentation and talking up the policies we are implementing, so I completely accept that. For the record, we believe this is a really important anti-avoidance measure, which will protect the integrity of the duty system we are implementing, and I want to be really clear about that.
Question put and agreed to.
Clause 82 accordingly ordered to stand part of the Bill.
Clauses 83 to 89 ordered to stand part of the Bill.
Clause 90
Denatured alcohol
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss clauses 91 to 97 stand part of the Bill.
Gareth Davies
Clauses 90 to 97 reproduce the existing exemption from excise duty on denatured alcohol. The exemption will continue to operate in the same way as it does now. As mentioned during the debate on clauses 72 to 81, we are legislating to ensure that all primary legislation relating to the production and use of alcoholic products is contained in one place.
No policy changes are made by these clauses. They reproduce an existing exemption from the charge of alcohol duty for denatured alcohol. In some clauses, changes to the structure and language have been made to modernise and simplify the legislation, but the operation of the exemption remains the same. The clauses reproduce the exemption for denatured alcohol, which is used for the manufacture of products that are not for human consumption, such as paint fillers, cosmetics and toiletries.
The clauses are an administrative measure to ensure that the current exemption for denatured alcohol will continue as now in the newly reformed alcohol duty system. I therefore urge that the clauses stand part of the Bill.
Abena Oppong-Asare
We now come to chapter 6 of the Bill, which concerns denatured alcohol. Clause 90 states that the definition of “denatured alcohol” will be provided by the HMRC commissioners. Perhaps the Minister could give us an idea of what that definition might look like. The clause also sets out that alcohol duty will not be charged on denatured alcohol.
Clause 91 specifies that a person must be licensed as a denaturer to legally denature alcoholic products or be a wholesaler of denatured alcohol. Clause 92 provides the HMRC commissioners with a sweeping set of powers, such as allowing them to regulate the denaturing of alcoholic products and the supply, storage and sale of denatured products. Perhaps the Minister could outline the purpose of this wide set of delegated powers or give an example of where he would expect them to be used.
Clause 93 sets out that failure to comply with the regulatory regime for denatured alcohol, as set out in chapter 6, will attract a penalty under section 9 of the Finance Act 1994. Clauses 94 and 95 lay out the circumstances in which denatured alcohol is liable for forfeiture or penalty—for example, when a person produces or possesses more denatured alcohol than they are licensed to.
Clause 96 gives HMRC officers a power to inspect, at any reasonable time, premises being used to produce denatured alcohol, and to take samples. Finally, clause 97 lays out the circumstances in which it is an offence for a person to use denatured alcohol—for example, preparing denatured alcohol as a beverage or purifying denatured alcohol. Most of these clauses simply update and integrate into the Bill provisions already laid out in the Alcoholic Liquor Duties Act 1979, so we will not oppose them.
Gareth Davies
Let me again provide reassurance that we are not changing the definition of denatured alcohol, and we have no need to do so—this is a legislative update. However, the hon. Lady should know, for interest and further exploration, that the definition is found in the Denatured Alcohol Regulations 2005. In this measure, we are simply re-enacting existing powers. She should take reassurance from that.
Question put and agreed to.
Clause 90 accordingly ordered to stand part of the Bill.
Clauses 91 to 97 ordered to stand part of the Bill.
Clause 98
Definitions
The Chair
With this it will be convenient to discuss the following:
Clauses 99 to 105 stand part.
That schedule 10 be the Tenth schedule to the Bill.
Clauses 106 and 107 stand part.
Gareth Davies
Clauses 98 to 107 and schedule 10 simply reproduce existing provisions for excise controls on anyone making wholesale transactions in duty-paid alcoholic products.
As mentioned during the debate on clauses 72 to 81, and clauses 90 to 97, we are legislating to ensure that all primary legislation relating to the production and use of alcoholic products is located in one place. Clauses 98 to 107 and schedule 10 reproduce the requirements for the wholesaling of controlled alcoholic products. Those controls and requirements will continue to operate in the same way as they do now.
To conclude, these clauses and schedule 10 are an administrative measure to ensure that all primary legislation relating to the production and use of alcoholic products for duty purposes are contained in one place.
Abena Oppong-Asare
We now come to chapter 7 of the Bill, which concerns the wholesaling of controlled alcoholic products. Clause 98 provides several definitions relevant to the chapter, and clause 99 allows HMRC commissioners to make specific definitions concerning whether goods are to be considered wholesale or retail sale. Clause 100 lays out an approval process to allow a person to carry out wholesale activity. Again, that simply reproduces, with updated terminology, sections of the Alcoholic Liquor Duties Act 1979.
Clause 101 requires HMRC to keep a publicly available register of all approved wholesalers, and clause 102 provides HMRC with powers to regulate the wholesale system. I would be grateful if the Minister could humour me and give me more information on how the register will be made publicly available, what timescales have been given to HMRC and what publication dates will be required for that information.
Clause 103 turns the focus to purchasers of alcoholic products, specifying that a person may not buy controlled alcoholic products unless they are buying from an approved wholesaler. Clauses 104 and 105 and schedule 10 make it clear that a penalty could be incurred if a person knows, or reasonably suspects, that they have bought alcoholic products from someone who is not suitably approved.
Clause 106 defines a group for the purposes of the alcoholic product wholesaler provisions, and clause 107 provides definitions for some of the terms used in the chapter. We do not take issue with this set of clauses concerning wholesale transactions, and we will not oppose them.
Gareth Davies
I appreciate the points that the hon. Lady has raised. I reassure her that these are technical updates to consolidate the legislation, so that, for simplification purposes, we have in one place all the legislation for alcohol duty and measures—isn’t that a wonderful thing that we are doing?
The hon. Lady made a good point on communication. We will ensure that all communication is as good as it can be, and we will come up with further details on that in due course.
Question put and agreed to.
Clause 98 accordingly ordered to stand part of the Bill.
Clauses 99 to 105 ordered to stand part of the Bill.
Schedule 10 agreed to.
Clauses 106 and 107 ordered to stand part of the Bill.
Clause 108
Reviews and appeals
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 11 be the Eleventh schedule to the Bill.
Clauses 109 to 112 stand part.
That schedule 12 be the Twelfth schedule to the Bill.
Clauses 113 and 114 stand part.
That schedule 13 be the Thirteenth schedule to the Bill.
Clauses 115 to 120 stand part.
Gareth Davies
Clauses 108 to 111 and schedule 11 make supplementary changes for the reformed alcohol duty system. The provisions are necessary consequential amendments as a result of changes made elsewhere in the Bill. Clause 112 and schedule 12 reproduce the requirements for duty stamps on alcoholic products. Those controls and requirements continue to operate in exactly the same way as they do now. Clauses 113 to 116 make changes to repeal outdated legislation and provide transitional arrangements for wine businesses and small cider makers as they move to the new duty system. Clauses 117 to 120 allow for regulations to be made to supplement the provisions in primary law.
The Government are committed to simplifying the current system for alcohol duty, which is complicated and outdated. As mentioned in debate on previous alcohol duty clauses, we are legislating to ensure that all primary legislation relating to the production and use of alcoholic products is contained in one place. Clauses 113 to 116 and schedule 13 repeal some parts of the Alcoholic Liquor Duties Act 1979 that are no longer needed, and they ensure that all primary legislation relating to alcohol duty is now contained in one place. They also include specific transitional provisions for cider and wine products, which face the biggest challenges as we move to the new strength-based system. Clauses 117 to 120 allow the Government to commence different parts of the primary legislation at different times by appointed day order.
Clause 108 and schedule 11 provide a right to reviews and appeals for decisions that HMRC makes. Clause 109 ensures that the forfeiture provisions across the reformed alcohol duty system are consistent. Clause 110 updates legislation relating to certain movements of alcohol products from a warehouse so that it applies equally to alcohol products removed from premises that have the new alcohol approval. Clause 111 extends brewers’ existing ability to offset a claim for refunds of excise duty against liability on their monthly return. Clause 112 and schedule 12 reproduce the requirements for duty stamps on alcoholic products. Those controls and requirements will continue to operate in the same way as they do now.
Clause 113 provides a list of repealed legislation. Clause 114 makes consequential amendments to other legislation, which is required as a result of the policy changes. Clause 115 is a temporary provision for producers and importers of certain wine products, to help them to manage the transition to a strength-based system. That will be in place for 18 months, and it will ease the administrative burdens of moving to calculating the duty on wine based on strength. Clause 116 is a temporary provision for small cider producers to maintain the effect of the exemption from registration and paying alcohol duty that they currently hold until the approvals provisions are given effect next year.
Clause 117 provides an index of terms used in this part of the Bill and references to where further detail can be found regarding each. Clause 118 provides a power to make regulations in relation to this part of the Bill and how the power may be used. Clause 119 explains the parliamentary procedure that must be used to make regulations using the various powers included in this part. Clause 120 concerns commencement and states that, other than these clauses and other regulation-making powers, none of the provisions in the Bill concerning alcohol duty takes effect until an appointed day order is laid.
These clauses and accompanying schedules are administrative measures that ensure that the Government’s ambitious alcohol reform is underpinned by modern legislation, and that the transition to the new system is smooth. The clauses conclude the part covering alcohol duty reform, and I commend them to the Committee.
Abena Oppong-Asare
With this group of clauses, we turn to chapters 8, 9 and 10 of the Bill concerning supplementary items, repeals, further amendments, transitional provisions and final provisions. Clause 108 and schedule 11 make relevant amendments to the Finance Act 1994. They appear to be purely administrative, but perhaps the Minister could clarify that? Clause 109 specifies that HMRC may destroy, break up, or spill anything seized as liable to forfeiture. Clause 110 inserts new subsections into the Customs and Excise Management Act 1979. As this is quite technical, perhaps the Minister could explain precisely what the clause achieves, because I found that the explanatory notes did not cover it in depth. [Interruption.]
Abena Oppong-Asare
Clause 111 provides that producers of alcoholic products can offset amounts of alcohol duty that are owed to them against other amounts of alcohol duty that they have been charged. Clause 112 and schedule 12 make provisions about duty stamps.
The next measures in the group cover repeals, further amendments and transitional provisions. Clause 113 provides a list of legislation repealed as a consequence of this Bill, including the Alcoholic Liquor Duties Act 1979 and sections 4 and 5 of the Finance Act 1995. I can see that that is because the Bill will replace those pieces of legislation. Clause 114 and schedule 13 make minor and consequential amendments to other legislation.
The next clauses within the group concern transitional provisions included in the Bill. Clause 115 provides for a temporary period for treating wine of between 11.5% and 14.5% ABV as if the strength were 12.5% ABV, lasting for eighteen months after the new system comes into force. Clause 116 provides a temporary exemption from the new alcohol duty regime for cider that is produced before the new approvals system comes into force, as long as the cider is produced by a cider maker producing less than 70 hectolitres a year. I know that many affected businesses will be grateful that transitional arrangements are being put in place, but they will want to know precisely how those arrangements will be implemented and any tapering, and they will want confirmation of the time periods involved.
We are now at the final set of clauses within this group, concerning final provisions. Clause 117 provides an index of terms defined in this part of the Bill, with a reference to where further detail can be found for each term. That includes terms that we have already discussed, such as “alcoholic strength”, “excise duty point” and “qualifying draught product”.
Clauses 118 and 119 provide broad delegated powers to the HMRC commissioners to provide supplementary provisions to the alcohol duty regime. Will the Minister outline examples of what those supplementary provisions might be, why the negative procedure has been thought appropriate and how affected groups will be consulted prior to any further changes?
Finally, clause 120 concerns the commencement of the new alcohol duty regime. At this stage, perhaps the Minister could confirm—he did not when I asked him previously—when the new alcohol duty regime is expected to come into force, and that there will be no further U-turns or delays.
As has been the trend, we will not be opposing these measures. I look forward to continuing our discussion of the new alcohol duty regime on Report, where I hope to be able to extract the detail and certainty that businesses so desperately need from this Government.
Kirsty Blackman
I will follow up with several similar questions about dates, so that people have a level of certainty about when they will be expected to comply and when transitional provision will run out. On the temporary provision for wine in clause 115, I understand what the Minister said about how the strength of wine fluctuates depending on the time of the season when the grapes were grown or picked. After the 18 months, what does he expect to happen with this fluctuation? Does he think that wine producers will somehow regularise the alcohol percentage of the wine that they produce? I am not sure how they could do that; they cannot do it by dilution. How exactly might they do that, or does he expect that they will pay different rates depending on the percentage of each bottle? I am not hugely fussed about which he thinks will happen, but it would be interesting to know what the Government expect those wine producers to do.
The case that the Minister has laid out around transitional provision for wine makes sense. I understand that the measure will be brought in fairly shortly and does not give wine producers the time to make seasonal adjustments at this point, but this will give them time to make such adjustments before the end of the 18-month period.
In relation to the temporary provision on cider, my understanding from clause 116 is that the current relief is being extended until the new approvals process comes into place, so those who currently qualify to benefit from relief will continue to do so. The date that has been chosen is the date on which the approvals process comes into force, rather than the date on which the new rates come in. I understand from what was said earlier that the approvals process will come into place later than the rest of the Bill, and I wonder whether there is clarity on how much later. Do we have a date on which the process will kick in? If not, do we have a date for when we will know? That would at least mean that people knew that from September, for example, they would have a level of certainty about when the transitional relief will end and the new approvals process will begin.
Two different sets of dates have been chosen. Clause 120 is about commencement, and there is a level of flexibility built in. Can the Minister confirm when the majority of this part of the Bill will commence, and whether only the approvals process will lag behind? Given the dramatic change from one regime to another and the fact that there might be a significant change in rates—as he has made clear, however, there will not be a significant change in exemptions; only the calculation of rates will be changed—does he expect the new rates to be charged from day one? Let us say he picks 1 August; will the old rates be charged until 31 July and the new rates kick in on 1 August?
To prevent any fiddling of the rate, is there clarity about when people will pay it? Is there a risk that they might, for example, stop putting caps on bottles for a period of time to ensure that they are subject to the new rate rather than the old one? If so, is HMRC aware of that, and will it ensure that people pay the appropriate rate and can prove they are eligible for that rate?
There is quite a cliff-edge change. The rates will go up dramatically for some people; they will go down dramatically for other people; and for some people they will stay the same. For an awful lot of people, there will be a change. When the new regime comes in, we need to ensure that it is fair and is applied fairly, so that those who go out of their way to try to swizz the system are not allowed to benefit at the expense of those who are being sensible and paying the correct rates when and where they should be.
Gareth Davies
Let me first address the request from the hon. Member for Erith and Thamesmead for me to further explain certain clauses. Clause 108 ensures that the legislation works, basically, and detail is provided in the explanatory notes. If she requires more detail, I am happy for her to write to me. Clause 110 ensures that this measure works with amended legislation, because it is about the movement of alcohol from excise warehouses to authorised people. Clause 115 basically sets out the period of 18 months that I am about to address. Clause 116 relates to when the period ends and approvals come into force.
The hon. Member for Aberdeen North makes some good points, and she asked a good question about the 18-month period for the wine easement. It has been determined, through consultation and engagement with the wine industry, that 18 months is sufficient time for it to put in place the operational requirements, such as labelling, for it to be able to meet the alcohol reforms that we are making. As I set out at the beginning, some types of wine will see a reduction in duty. Simplification is driving these reforms, and we are moving to the principle that the more alcohol a product contains, the more tax it attracts, so there will be increases and decreases as part of all this.
Question put and agreed to.
Clause 108 accordingly ordered to stand part of the Bill.
Schedule 11 agreed to.
Clauses 109 to 112 ordered to stand part of the Bill.
Schedule 12 agreed to.
Clauses 113 and 114 ordered to stand part of the Bill.
Schedule 13 agreed to.
Clauses 115 to 120 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Andrew Stephenson.)
Data Protection and Digital Information (No. 2) Bill (Third sitting)
Tuesday 16th May 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Data Protection and Digital Information Bill 2022-23 View all Data Protection and Digital Information Bill 2022-23 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 May 2023 - (16 May 2023)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 6 - Question accordingly agreed to.
The Chair
I have a few preliminary announcements that Mr Speaker would like me to make. Hansard colleagues would be grateful if Members emailed their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent mode. Tea and coffee are not allowed during sittings.
The selection list for today’s sitting, which is available in the room, shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or a similar issue. Please note that decisions on amendments will take place not in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment will be taken when we come to the clause to which the amendment relates.
The Member who has put their name to the lead amendment in a group will be called first. Other Members will then be free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate. At the end of a debate on a group of amendments, I shall again call the Member who moved the lead amendment. Before they sit down, they will need to indicate to me whether they wish to withdraw the amendment or to seek a decision. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know.
Clause 1
Information relating to an identifiable living individual
Question proposed, That the clause stand part of the Bill.
The Minister for Data and Digital Infrastructure (Sir John Whittingdale)
It is a pleasure to serve under your chairmanship, Mr Hollobone. May I thank all hon. Members for volunteering to serve on the Committee? When I spoke on Second Reading, I expressed my enthusiastic support for the Bill—just as well, really. I did not necessarily expect to be leading on it in Committee, but I believe it is a very important Bill. It is complex and will require quite a lot of scrutiny, but it will create a framework of real benefit to the UK, by facilitating the exchange of data and allowing us to take the maximum advantage of emerging technologies. I look forward to our debates over the next few days.
Clause 1 will create a test in legislation to help organisations to understand whether the data that they are processing is personal or anonymous. This is important, because personal data is subject to data protection rules but anonymous data is not. If organisations can be confident that the data they are processing is anonymous, they will be able to use it for important activities such as research and product development without concern about the potential impact on individuals’ personal data.
The new test will require data controllers considering whether data is personal or anonymous to consider two scenarios. The first is where a living individual can be identified by somebody within the data controller or processor’s own organisation using reasonable means at any point at which the data is being processed, from the initial point of collection for its use and storage to its eventual deletion or onward transmission. The second scenario is where the data controller or processor knows or should reasonably know that somebody outside the organisation is likely to obtain the information and to be able to re-identify individuals from it using reasonable means. That could be a research partner or a business client with whom the data controller intends to share the data, or an outside organisation that obtains the data as a result of the data controller not putting adequate security measures in place.
What would be considered “reasonable means” in any given case takes into account, among other things, the time, effort and cost of identifying the individual, as well as the technology available during the time the processing occurs. We hope that the clarity the test provides will give organisations greater confidence about using anonymous data for a range of purposes, from marketing to medical research. I commend the clause to the Committee.
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairship, Mr Hollobone. I echo the Minister’s thanks to everyone serving on the Bill Committee; it is indeed a privilege to be here representing His Majesty’s loyal Opposition. I look forward to doing our constitutional duty as we scrutinise the Bill today and in the coming sittings.
The definition of personal data is critical, not only to this entire piece of legislation, but to the data protection regime more widely. That is because the definition of what counts as personal data sets the parameters on who will benefit from protections and safeguards set out by the legislation, and, looking at it from the other side, the various protections will not apply when data is not classed as personal. It is therefore important that the definition should be clear for both controllers and data subjects, so that everyone understands where regulations and, by extension, rights do and do not apply.
The Bill defines personal data as that where a data subject can be identified by a controller or processor, or anyone likely to obtain the information,
“by reasonable means at the time of processing”.
According to the Bill, “reasonable means” take into account the time, effort, costs, technology and resources available to the person. The addition of “reasonable” to the definition has caused major concern among civil society groups, which are worried that it will introduce an element of subjectivity from the perspective of the controller when determining whether data is personal or not. Indeed, although recital 26 of the General Data Protection Regulation also refers to reasonable means—making this, in some ways, more of a formal change than a practical one—there must still be clear parameters on how controllers or processors are to make that judgment. Without those, there may be a danger of controllers and processors avoiding the requirement to comply with rules around personal data by simply claiming they do not have the means to identify living individuals within their resources.
Has the Department undertaken an impact assessment to determine whether the definition could, first, increase subjectivity in what counts as personal data, or secondly, reduce the amount of data classified as personal data? If an assessment identifies such a risk, what steps will the Department take to mitigate that and ensure that citizens are able to exercise their rights as they can under the current definition?
Other stakeholders have raised concerns that the phrase
“at the time of the processing”
in the definition might imply that there is no continuous obligation to consider whether data is personal. Indeed, under the current definition, where personal data is
“any information that relates to an identified or identifiable living individual”,
there is an implied obligation to consider whether an individual is identifiable on an ongoing basis. Rather than assessing the identifiability of a dataset at a fixed point, the controller or processor must keep the categorisation of data that it holds under careful review, taking into account technological developments, such as sophisticated new artificial intelligence or cross-referencing tools. Inserting the phrase
“at the time of the processing”
into this definition has prompted the likes of Which? to express concern that some processors may feel that they are no longer bound by this continuous obligation. That would be particularly worrying given the potential subjectivity of the new definition. If whether an individual is identifiable is based on “reasonable means”, including one’s resources and technology, it is perfectly feasible that, with a change of resources or technology, it could become reasonable to identify a person when once it was not.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend is making an excellent speech. Does she agree that the absence of regard for the rate of technological change, particularly the rise of artificial intelligence—datasets are now being processed at phenomenal speeds—is potentially negligent on the part of the Government?
Stephanie Peacock
My hon. Friend makes an important point, which I will come to later.
In these circumstances, it is crucial that if a person is identifiable through data at any time in the future, the data is legally treated as personal so that the relevant safeguards and rights that GDPR was designed to ensure still apply.
When arguing for increased Secretary of State powers across the Bill, Ministers have frequently cited the need to future-proof the legislation. Given that, we must also consider the need to future-proof the definition of data so that technological advances do not render it useless. Does the new definition involve a continuous obligation to assess whether data is personal? Will guidance be offered to inform both controllers and data subjects on the application of this definition, so that both sides can be clear on how it will work in practice? As 5Rights has pointed out, that could avoid clogging up the regulator’s time with claims about what counts as personal data in many individual cases.
Finally, when determining whether data is personal, it is also vital that controllers take into account how a determined stalker or malicious actor might find and use their data. It is therefore good to see the change made since the first iteration of the Data Protection and Digital Information Bill, to clarify that
“obtaining the information as a result of the processing”
also includes information obtained as a result of inaction by a controller or processor—for example, as the result of a failure to put in place appropriate measures to prevent or reduce the risk of hacking.
Overall, it is important that we give both controllers and data subjects clarity about which data is covered by which protections, and when. I look forward to hearing from the Minister about the concerns that have been raised, which could affect the definition’s ability to allow for that clarity.
Sir John Whittingdale
I agree absolutely with the hon. Lady that the definition of personal data is central to the regime that we are putting in place. She is absolutely right that we need to be very clear and to provide organisations with clarity about what is within the definition of personal data and what is rightly considered to be anonymous. She asks whether the provision will lead to a reduction in the current level of protection. We do not believe that it will.
Clause 1 builds on the strong foundations used in GDPR recital 26 to clarify when data can be categorised as truly anonymous without creating undue risks. The aim of the provision in the Bill is to clarify when information should be considered to be personal data by including a test for identifiability in the legislation. That improved clarity will help organisations to determine when data can be considered truly anonymous and therefore pose almost no risk to the data subject.
The hon. Lady asked whether
“at the time of the processing”
extends into the future, and the answer is yes. The definition of data processing in the legislation is very broad and includes a lot of processing activities other than just the collection of data, such as alteration, retrieval, storage and disclosure by transmission, to name just a few. The phrase
“at the time of the processing”
could therefore cover a long period, depending on the nature and purpose of the processing. The test would need to be applied afresh for each new act of processing. That means that if at any point in the life cycle of processing, the data could be reasonably re-identified by someone by reasonable means, they would then not be able to legally consider to be anonymous. That includes transferring abroad to other regimes.
The clause makes it clear that a controller will have to consider the likelihood of re-identification at all stages of the processing activity. If a data controller held a dataset for several years, they would need to be mindful of the technologies available during that time that might be used to re-identify it. As the hon. Lady said, technology is advancing very fast and could well change over time from the point at which the data is first collected.
Chi Onwurah
I appreciate the Minister’s clarification. He has just said that the test of identification would apply when sharing the data with another authority. However, once that has been done, the test no longer applies. Does he accept that it is possible for data to be shared that could not by this test reasonably be identified but that, over time, in a different authority, could reasonably be identified, without the data subject having any redress?
Sir John Whittingdale
If data is shared and then held by a new controller, it will be still subject to the same protections even though it has been transferred from the original. It is important that there should be the ability to continue to apply protection no matter what technology evolves over the course of time, but it will still be subject to the same protection and, of course, still be enforceable through the Information Commissioner.
Chi Onwurah
Would it be subject to the same protection if it was transferred abroad?
Sir John Whittingdale
Again, yes, it will. It will be transferred abroad only if we are satisfied that the recipient will impose the same level of protection that we regard as necessary in this country.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Meaning of research and statistical purposes
Stephanie Peacock
I beg to move amendment 66, clause 2, page 4, line 8, at end insert—
“(c) do not include processing of personal data relating to children for research carried out as a commercial activity.”
This amendment would exempt children’s data from being used for commercial purposes under the definition of scientific purposes in this clause.
The Chair
With this it will be convenient to discuss:
Amendment 65, clause 2, page 4, line 21, at end insert—
“7. The Commissioner must prepare a code of practice under section 124A of the Data Protection Act 2018 on the interpretation of references in this Regulation to “scientific research”.
8. The code of practice prepared under paragraph 7 must include examples of the kinds of research purposes, fields, controllers, and ethical standards that are to be considered as being scientific, and those that are excluded from being so considered.”
This amendment would require a statutory code of practice from the ICO on how the definition of scientific research in this clause is to be interpreted.
Clause stand part.
Stephanie Peacock
Fuelling safe scientific research through data will be vital to support the UK’s ambition to become a science superpower. We understand that, as is the case in many areas of data protection law, lack of clarity about what counts as processing for scientific purposes causes organisations to take a risk-averse approach to conducting research. An understanding of exactly what is included would therefore give organisations confidence they need to conduct vital processing that will allow for the scientific discoveries and benefits of the future.
Unfortunately, the clause makes the same mistake as the Bill does in general by focusing on easing regulations on those who hold data, rather than looking at how data can be harnessed for the general greater good. It misses the opportunity to unlock the benefits of safely redistributing and sharing data. Indeed, none of the clauses on processing for research purposes make any attempt to explore options to incentivise controllers to share their data with independent researchers. Similarly, the Bill does not explore how the likes of data trusts or co-operatives that pool data resources in the interests of a larger group of beneficiaries or organisations could create a stronger environment for research. Instead, it leaves those who already collect and hold data to benefit from the regime by processing for their own research purposes, while those who might hope to collaborate will use alternative data sets and are no better off.
By failing to think about the safe sharing of data to fuel scientific research, the Government limit the progress the UK could make as a powerhouse of science innovation. The Bill leaves only those organisations with large amounts of data able to contribute to such progress, entrenching existing power structures and neglecting the talent held in the smaller independent organisations that would otherwise be able to conduct research for the public good.
Turning to amendment 65, it has always been written into the GDPR, in recital 159, that processing for scientific purposes should be interpreted broadly. It is therefore understandable why Ministers provided a broad definition in the Bill that allows for those conducting genuine scientific research to have absolute confidence that their processing falls under this umbrella, preventing a risk-averse environment. However, stakeholders, including Reset.tech and the Ada Lovelace Institute, have expressed worries that clause 2 goes a little too far, essentially providing a blank cheque for private companies to self-identify as conducting scientific research as a guise for processing personal information for any purpose they choose.
All that must be understood in combination with clause 9, which gives organisations an exemption from purpose limitation, allowing them to reuse data as long as it is for scientific purposes, as defined in clause 2. Indeed, though the Bill contains a few clarifications of what the definition in clause 2 includes, such as publicly and privately funded processing, commercial or non-commercial processing and processing for the likes of technological development, fundamental research, or applied research, I am keen to hear from the Minister about what specific purposes would actually be ruled out under the letter of the current definition. For example, as the Ada Lovelace Institute asked, would pseudoscientific applications, such as polygraphy or experimental AI claiming to predict an individual’s religion, politics or sexuality, be categorically ruled out under the current definition?
Though it may not be the intention in the clause to enable malicious or pseudoscientific processing under the definition of science, we must ensure that the definition is not open to exploitation, or so broad that any controller could reasonably identify their processing as falling under it. Regulator guidance would be in a prime position to do that. By providing context as to what must be considered for something to be reasonably classified as scientific—for example, the purpose of the research, the field of research, the type of controller carrying it out, or the methodological and ethical standards used—controllers using the definition legitimately will feel even more assured, and malicious processing will be explicitly excluded from the application of the definition. Amendment 65 would do nothing to stop genuinely scientific research from benefiting from the changes in this Bill and would provide further clarity around how the definition can be legitimately relied upon.
Damian Collins (Folkestone and Hythe) (Con)
I wish to pose a couple of questions, after two thoughtful and well-presented amendments from those on the Opposition Front Bench. With regard to children and the use of apps such as TikTok, what assurance will the Government seek to ensure that companies that process and store data abroad are abiding by the principles of our domestic legislation? I mention TikTok directly because it stores data from UK users, including children, in Singapore, and it has made clear in evidence to the Joint Committee on the Online Safety Bill that that data is accessed by engineers in China who are working on it.
We all know that when data is taken from a store and used for product development, it can be returned in its original state but a huge amount of information is gathered and inferred from it that is then in the hands of engineers and product developers working in countries such as China and under very different jurisdictions. I am interested to know what approach we would take to companies that store data in a country where we feel we have a data equivalence regime but then process the data from a third location where we do not have such a data agreement.
Sir John Whittingdale
I welcome the recognition of the importance of allowing genuine research and the benefits that can flow from it. Such research may well be dependent on using data and the clause is intended to provide clarity as to exactly how that can be done and in what circumstances.
I will address the amendments immediately. I am grateful to the hon. Member for Barnsley East for setting out her arguments and we understand her concerns. However, I think that the amendments go beyond what the clause proposes and, in addition, I do not think that there is a foundation for those concerns. As we have set out, clause 2 inserts in legislation a definition for processing for scientific research, historical research and statistical purposes. The definition of scientific research purposes is set out as
“any research that can be reasonably described as scientific”
and I am not sure that some of the examples that the hon. Lady gave would meet that definition.
The definitions inserted by the clause are based on the wording in the recitals to the UK GDPR. We are not changing the scope of these definitions, only their status in the legislation. They will already be very familiar to people using them, but setting them out in the Bill will provide more clarity and legal certainty. We have maintained a broad scope as to what is allowed to be included in scientific research, with the view that the regulator can add more nuance and context through guidance, as is currently the case. The power to require codes of practice provides a route for the Secretary of State to require the Information Commissioner to prepare any code of practice that gives guidance on good practice in processing personal data.
There will be situations where non-statutory guidance, which can be produced without being requested under regulations made by the Secretary of State, may be more appropriate than a statutory code of practice. Examples of the types of activity that are considered scientific research and the indicative criteria that a researcher should demonstrate are best placed in non-statutory guidance produced by the Information Commissioner’s Office. That will give flexibility to amend and change the examples when necessary, so I believe that the process does not change the provision. However, putting it in the legislation, rather than in the recitals, will impose stronger safeguards and make things clearer. Once the Bill has come into effect, the Government will continue to work with the ICO to update its already detailed and helpful guidance on the definition of scientific research as necessary.
Amendment 66 would prohibit the use of children’s data for commercial purposes under the definition of scientific research. The definition inserted by clause 2 includes the clarification that processing for scientific research carried out as a commercial activity can be considered processing for scientific research purposes. Parts of the research community asked for that clarification in response to our consultation. It reflects the existing scope, as is already clear from the ICO’s guidance, and we have seen that research by commercial bodies can have immense societal value. For instance, research into vaccines and life-saving treatments is clearly in the public interest. I entirely understand the hon. Lady’s concern for children’s privacy, but we think that her amendment could obstruct important research by commercial organisations, such as research into children’s diseases. I think that the Information Commissioner would make it clear as to whether or not the kind of example that the hon. Lady gave would fall within the definition of research for scientific purposes.
I also entirely understand the concern expressed by my hon. Friend the Member for Folkestone and Hythe. I suspect that the question about the sharing of data internationally, particularly, perhaps, by TikTok, may recur during the course of our debates. As he knows, we would share data internationally only if we were confident that it would still be protected in the same way that it is here, which would include considering the possibility of whether or not it could then be passed on to a third country, such as China.
I hope that I can reassure the hon. Lady that emphasising the safeguards that researchers must comply with in clause 22 to protect individuals relates to all data used for these purposes, including children’s data and the protections afforded to children under the UK GDPR. For those reasons, I hope that she will be willing to withdraw her amendment.
Stephanie Peacock
I am disappointed that the Minister does not accept amendment 66. Let me make a couple of brief points about amendment 65. The Minister said that he was not sure whether some of the examples I gave fitted under the definition, and that is what the amendment speaks to. I asked what specific purposes would be ruled out under the letter of the current definition, and that is still not clear, so I will press the amendment to a vote.
Question put, That the amendment be made.
Sir John Whittingdale
The clause clarifies how the conditions for consent will be met in certain circumstances when processing for scientific research purposes. It clarifies an existing concept of “broad consent” that is currently found in the recitals. The measure will enable consent to be obtained for an area of scientific research when the researcher cannot fully identify the purposes for which they are collecting the data.
Consent under UK GDPR must be for a specific purpose, but in scientific research the precise purpose may not be fully known when the data is collected. For example, the initial aim may be the study of cancer, and then later becomes the study of a particular cancer type. Currently, the UK GDPR recitals clarify that consent may be given for an area of scientific research, but as the recitals are only an interpretative aid that may not give scientists the certainty that they need. The clause will therefore add the ability to give broad consent for scientific research into the operative text of the UK GDPR, giving scientists greater certainty and confidence. The clause contains a number of safeguards to protect against misuse. That includes the requirement that seeking consent is consistent with ethical standards that are generally recognised and relevant to that area of research.
Stephanie Peacock
With regard to clause 3, I refer Members to my remarks on clause 2. It is sensible to clarify how controllers and processors conducting scientific research can gain consent where it is not possible to fully identify the full set of uses for that data when it is collected. However, what counts as scientific, and therefore what is covered by the clause, must be properly understood by both data subjects and controllers through proper guidance issued by the ICO.
Clause 4 is largely technical and inserts the recognised definition of consent into part 3 of the Data Protection Act 2018, for use when it is inappropriate to use one of the law enforcement purposes. I will talk about law enforcement processing in more detail when we consider clauses 16, 24 and 26, but I have no problem with the definition in clause 4 and am happy to accept it.
Sir John Whittingdale
I am grateful to the hon. Lady for her support. I agree with her on the importance of ensuring that the definition of scientific research is clear. That is something on which I have no doubt the ICO will also issue guidance.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4 ordered to stand part of the Bill.
Clause 5
Lawfulness of processing
Stephanie Peacock
I beg to move amendment 68, in clause 5, page 6, line 37, at end insert—
“7A. The Secretary of State may not make regulations under paragraph 6 unless—
(a) following consultation with such persons as the Secretary of State considers appropriate, the Secretary of State has published an assessment of the impact of the change to be made by the regulations on the rights and freedoms of data and decision subjects (with particular reference to children),
(b) the Commissioner has reviewed the Secretary of State’s statement and published a statement of the Commissioner’s views on whether the change should be made, with reasons, and
(c) the Secretary of State has considered whether to proceed with the change in the light of the Commissioner’s statement.”
This amendment would make the Secretary of State’s ability to amend the conditions in Annex 1 which define “legitimate interests” subject to a requirement for consultation with interested parties and with the Information Commissioner, who would be required to publish their views on any proposed change.
The Chair
With this it will be convenient to discuss the following:
Amendment 67, in clause 5, page 7, line 18, at end insert—
“11. Processing may not be carried out in reliance on paragraph 1(ea) unless the controller has published a statement of—
(a) which of the conditions in Annex 1 has been met which makes the processing necessary,
(b) what processing will be carried out in reliance on that condition, or those conditions, and
(c) why that processing is proportionate to and necessary for the purpose or purposes indicated in the condition or conditions.”
This amendment would require controllers to document and publish (e.g. in a privacy notice) a short statement on their reliance on a “recognised legitimate interest” for processing personal data.
Clause stand part.
Stephanie Peacock
At present, the lawful bases for processing are set out in article 6 of the UK GDPR. At least one of them must apply whenever someone processes personal data. They are consent, contract, legal obligation, vital interests, public task, and legitimate interests. That is where data is being used in ways that we would reasonably expect, there is minimal privacy impact, or there is a compelling justification for processing. Of the existing lawful bases, consent is by far the most relied upon, as it is the most clear. There have therefore been calls for the other lawful bases to be made clearer and easier to use. It is welcome to see some examples of how organisations might rely on the legitimate interests lawful ground brought on to the statute book.
At the moment, in order to qualify for using legitimate interests as grounds for lawful processing, a controller must also complete a balancing test. The balancing test is an important safeguard. As per the ICO, it requires controllers to consider the interests and fundamental rights and freedoms of the individual, and whether they override the legitimate interests that the controller has identified. That means at a minimum considering the nature of the personal data being processed, the reasonable expectations of the individual, the likely impact of processing on the individual, and whether any safeguards can be put in place to mitigate any negative impacts.
As tech.UK mentioned, the introduction of a list of legitimate interests no longer requiring that test is something many have long called for. When conducting processing relating to an emergency, for example, the outcome of a balancing test often very obviously weighs in one direction, making the decision straightforward, and the test itself an administrative task that may slow processing down. It makes sense in such instances that a considered exemption might apply.
However, given the reduction in protection and control for consumers when removing a balancing test, it is vital that a list of exemptions is limited and exhaustive, and that every item on such a list is well consulted on. It is also vital that the new lawful basis cannot be relied upon in bad faith or exploited by those who simply want to process without the burden, for reasons outside of those listed in annex 1. The Bill as it currently stands does not do enough to ensure either of those things, particularly given the Secretary of State’s ability to add to the list on a whim.
I turn to amendment 67. Although it is likely not the intention for the clause to be open to exploitation, Reset.tech, among many others, has shared concerns that controllers may be able to abuse the new lawful basis of “recognised legitimate interests”, stretching the listed items in annex 1 to cover some or all of their processing, and giving themselves flexibility over a wide range of processing without an explicit requirement to consider how that processing affects the rights of data and decision subjects. That is particularly concerning where controllers may be able to conflate different elements of their processing.
Reset.tech and AWO provide a theoretical case study to demonstrate that point. Let us say that there is a gig economy food delivery company that processes a range of data on workers, including minute-by-minute location data. That location data would be used primarily for performance management, but could occasionally be used in more extreme circumstances to detect crime—for example, detecting fraud by workers who are making false claims about how long they waited for an order to be ready for delivery. By exploiting the new recognised legitimate interests basis, the company could conflate its purposes of performance management and detecting crime, and justify the tracking of location data as a whole as being exempt from the balancing test, without having to record or specify exactly which processing is for the detection of crime.
Under the current regime, there remain two tests other than the balancing test that form a complete assessment of legitimate interests and help to prevent conflation of that kind. First, there is the purpose test, which requires the controller to identify which legitimate interest the company is relying upon. Secondly, there is the necessity test, which requires the controller to consider whether the processing that the company intends to conduct is necessary and proportionate to meet its purposes.
In having to conduct those tests, the food delivery company would find it much more difficult to conflate its performance management and crime prevention purposes, as it would have to identify and publicly state exactly which elements of its processing are covered by the legitimate interest purpose of crime prevention. That would make it explicit that any processing the company conducts for the purposes of performance management is not permitted under a recognised legitimate interest, meaning that a lawful basis for that processing would be required separately.
Amendment 67 therefore seeks to ensure that the benefits of the purpose and necessity tests are retained, safeguarding the recognised legitimate interests list from being used to cynically conflate purposes and being exploited more generally. In practice, that would mean that controllers relying on a purpose listed in annex 1 for processing would be required to document and publish a notice that explains exactly which processing the company is conducting under which purpose, and why it is necessary.
It is foundational to the GDPR regime that each act of processing has a purpose, so this requirement should just be formalising and publishing what controllers are already required to consider. The measure that the amendment seeks to introduce should therefore be no extra burden on those already complying in good faith, but should still act as a barrier to those attempting to abuse the new basis.
I turn to amendment 68. As the likes of Which? have argued, any instance of removing the balancing test will inevitably enable controllers to prioritise their interests in processing over the impact on data subjects, resulting in weaker protections for data subjects and weaker consumer control. Which? research, such as that outlined in its report “Control, Alt or Delete? The future of consumer data”, also shows that consumers value control over how their data is collected and used, and that they desire more transparency, rather than less, on how their data is used.
With those two things in mind—the value people place on control of their data and the degradation of that control as a result of removing the balancing test—it is vital that the power to remove the balancing test is used extremely sparingly on carefully considered, limited purposes only. Even for those purposes already included in annex 1, it is unclear exactly what impact assessment took place to ensure that the dangers of removing the test on the rights of citizens did not outweigh the positives of that removal.
It would therefore be helpful if the Minister could outline the assessment and analysis that took place before deciding the items on the list. Although it is sensible to future-proof the list and amend it as needs require, this does not necessarily mean vesting the power to do so in the Secretary of State’s hands, especially when such a power is open to potential abuse. Indeed, to say that the Secretary of State must have regard to the interests and fundamental rights and freedoms of data subjects and children when making amendments to the list is simply not a robust enough protection for citizens. Our laws should not rely on the good nature of the Secretary of State; they must be comprehensive enough to protect us if Ministers begin to act in bad faith.
Further, secondary legislation simply does not offer the scrutiny that the Government claim it does, because it is rarely voted on. Even when it is, if the Government of the day have a majority, defeating such a vote is incredibly rare. For the method of changing the list to be protected from the whims of a bad faith Secretary of State who simply claims to have had regard to people’s rights, proper consultation should be undertaken by the regulator on any amendments before they are considered for parliamentary approval.
This amendment would move the responsibility for judging the impact of changes away from the Secretary of State and place it with the regulator on a yearly basis, ensuring that amendments proceed only if they are deemed, after consultation, to be in the collective societal interest. That means there will be independent assurance that any amendments are not politically or maliciously motivated. This safeguard should not be of concern to anyone prepared to act in good faith, particularly the current Secretary of State, as it would not prevent the progression in Parliament of any amendments that serve the common good. The amendment represents what genuine future-proofing in a way that retains appropriate safeguards looks like, as opposed to what ends up looking like little more than an excuse for a sweeping power grab.
Sir John Whittingdale
I welcome the hon. Lady’s recognition of the value of setting out a list of legitimate interests to provide clarity, but I think she twice referred to the possibility of the Secretary of State adding to it on a whim. I do not think we would recognise that as a possibility. There is an established procedure, which I would like to go through in responding to the hon. Lady’s concerns. As she knows, one of the key principles of our data protection legislation is that any processing of personal data must be lawful. Processing will be lawful where an individual has given his or her consent, or where another specified lawful ground in article 6 of the UK GDPR applies. This includes where the processing is necessary for legitimate interests pursued by the data controller, providing that those interests are not outweighed by an individual’s privacy rights.
Clause 5 addresses the concerns that have been raised by some organisations about the difficulties in relying on the “legitimate interests” lawful ground, which is used mainly by commercial organisations and other non-public bodies. In order to rely on it, the data controller must identify what their interest is, show that the processing is necessary for their purposes and balance their interests against the privacy right of the data subject. If the rights of the data subject outweigh the interests of the organisation, the processing would not be lawful and the controller would need to identify a different lawful ground. Regulatory guidance strongly recommends that controllers document the outcome of their legitimate interests assessments.
As we have heard, and as the hon. Lady recognises, some organisations have struggled with the part of the legitimate interests assessment that requires them to balance their interests against the rights of individuals, and concern about getting the balancing test wrong—and about regulatory action that might follow as a result—can cause risk aversion. In the worst-case scenario, that could lead to crucial information in the interests of an individual or the public—for example, about safeguarding concerns—not being shared by third-sector and private-sector organisations. That is why we are taking steps in clause 5 and schedule 1 to remove the need to do the balancing test in relation to a narrow range of recognised legitimate activities that are carried out by non-public bodies. Those activities include processing, which is necessary for the purposes of safeguarding national security or defence; responding to emergencies; preventing crimes such as fraud or money laundering; safeguarding vulnerable individuals; and engaging with the public for the purposes of democratic engagement.
Damian Collins
Will my right hon. Friend confirm whether the Information Commissioner’s advice will be published, either by the commissioner, the Minister or Parliament—perhaps through the relevant Select Committee?
Sir John Whittingdale
I am not sure it would necessarily be published. I want to confirm that, but I am happy to give a clear response to the Committee in due course if my hon. Friend will allow me.
As well as the advice that the Information Commissioner supplies, the proposal is also subject to the affirmative procedure, as the hon. Member for Barnsley East recognised, so Parliament could refuse to approve any additions to the list that do not respect the rights of data subjects. She suggested that it is rare for an affirmative resolution to be rejected by Parliament; nevertheless, it is part of our democratic proceedings, and every member of the Committee considering it will have the opportunity to reach their own view and vote accordingly. I hope that reassures the hon. Lady that there are already adequate safeguards in place in relation to the exercise of powers to add new activities to the list of recognised legitimate interests.
Amendment 67, which the hon. Lady also tabled, would require data controllers to publish a statement if they are relying on the new recognised legitimate interests lawful ground. The statement would have to explain what processing would be carried out in reliance on the new lawful ground and why the processing is proportionate and necessary for the intended purpose. In our view, the amendment would significantly weaken the clause. It would reintroduce something similar to the legitimate interests assessment, which, as we have heard, can unnecessarily delay some very important processing activities. In scenarios involving national security or child protection, for example, the whole point of the clause is to make sure that relevant and necessary personal data can be shared without hesitation to protect vulnerable individuals or society more generally.
I hope the hon. Lady is reassured by my response and agrees to withdraw her amendments. I commend clause 5 to the Committee.
Stephanie Peacock
We do not believe that amendment 67 would place an extra burden on those who are already complying in good faith. The idea behind it is that it will be a barrier to those attempting to abuse the new basis.
On amendment 68, we should not have laws that rely on the Secretary of State’s good faith. As the Minister said, it is pretty rare for secondary legislation to be voted on, and for the Government to lose, so I do not see that as a barrier. The hon. Member for Folkestone and Hythe highlighted that although there are some protections, we do not believe that the Government protections go as far as we would like. For that reason, I will press the amendment to a vote.
Question put, That the amendment be made.
Sir John Whittingdale
I beg to move amendment 30, in schedule 1, page 137, line 28, leave out “fourth day after” and insert
“period of 30 days beginning with the day after”.
Annex 1 to the UK GDPR makes provision about processing for democratic engagement purposes, including certain processing by elected representatives. This amendment increases the period for which former members of the Westminster Parliament and the devolved legislatures continue to be treated as "elected representatives" following an election. See also NC6 and Amendment 31.
The Chair
With this it will be convenient to discuss the following:
Government amendment 31.
Government new clause 6—Special categories of personal data: elected representatives responding to requests.
That schedule 1 be the First schedule to the Bill.
Sir John Whittingdale
As the Committee will be aware, data protection legislation prohibits the use of “special category” data—namely, information about a person that is sensitive in nature—unless certain conditions or exemptions apply. One such exemption is where processing is necessary on grounds of substantial public interest.
Schedule 1 to the Data Protection Act 2018 sets out a number of situations where processing would be permitted on grounds of substantial public interest, subject to certain conditions and safeguards. That includes processing by elected representatives who are acting with the authority of their constituents for the purposes of progressing their casework. The current exemption applies to former Members of the Westminster and devolved Parliaments for four days after a general election—for example, if the MP has been defeated or decides to stand down. That permits them to continue to rely on the exemption for a short time after the election to conclude their parliamentary casework or hand it over to the incoming MP. In practice, however, it can take much longer than that to conclude these matters.
New clause 6 will therefore extend what is sometimes known as the four-day rule to 30 days, which will give outgoing MPs and their colleagues in the devolved Parliaments more time to conclude casework. That could include handing over live cases to the new representative, or considering what records should be retained, stored and deleted. When MPs leave office, there is an onus on them to conclude their casework in a timely manner. However, the sheer volume of their caseload, on top of the other work that needs to be done when leaving office, means that four days is just not enough to conclude all relevant business. The new clause will therefore avoid the unwelcome situation where an outgoing MP who is doing his or her best to conclude constituency casework could be acting unlawfully if they continue to process their constituents’ sensitive data after the four-day time limit has elapsed. Extending the time limit to 30 days will provide a pragmatic solution to help outgoing MPs while ensuring the exemptions cannot be relied on for an indefinite period.
Government amendments 30 and 31 will make identical changes to other parts of the Bill that rely on the same definition of “elected representative”. Government amendment 30 will change the definition of “elected representative” when the term appears in schedule 1. As I mentioned when we debated the previous group of amendments, clause 5 and schedule 1 to the Bill create a new lawful ground for processing non-sensitive personal data, where the processing is necessary for a “recognised legitimate interest”. The processing of personal data by elected representatives for the purposes of democratic engagement is listed as such an interest, along with other processing activities of high public importance, such as crime prevention, safeguarding children, protecting national security and responding to emergencies.
Government amendment 31 will make a similar change to the definition of “elected representative” when the term is used in clause 84. Clauses 83 and 84 give the Secretary of State the power to make regulations to exempt elected representatives from some or all of the direct marketing rules in the Privacy and Electronic Communications (EC Directive) Regulations 2003. I have no doubt that we will debate the merits of those clauses in more detail later in Committee, but for now it makes sense to ensure that there is a single definition of “elected representative” wherever it appears in the Bill. I hope the hon. Member for Barnsley East and other colleagues will agree that those are sensible suggestions and will support the amendments.
Stephanie Peacock
This set of Government provisions will increase the period for which former MPs and elected representatives in the devolved regions can use the democratic engagement purpose for processing. On the face of it, that seems like a sensible provision that allows for a transition period so that data can be deleted, processed, or moved on legally and safely after an election, and the Opposition have a huge amount of sympathy for it.
I will briefly put on record a couple of questions and concerns. The likes of the Ada Lovelace Institute have raised concerns about the inclusion of democratic engagement purposes in schedule 1. They are worried, particularly with the Cambridge Analytica scandal still fresh in people’s minds, that allowing politicians and elected parties to process data for fundraising and marketing without a proper balancing test could result in personal data being abused for political gain. The decision to make processing for the purposes of democratic engagement less transparent and to remove the balancing test that measures the impact of that processing on individual rights may indicate that the Government do not share the concern about political processing. Did the Minister’s Department consider the Cambridge Analytica scandal when drawing up the provisions? Further, what safeguards will be in place to ensure that all data processing done under the new democratic engagement purpose is necessary and is not abused to spread misinformation?
Sir John Whittingdale
I would only say to the hon. Lady that I have no doubt that we will consider those aspects in great detail when we get to the specific proposals in the Bill, and I shall listen with great interest to my hon. Friend the Member for Folkestone and Hythe, who played an extremely important role in uncovering what went on with Cambridge Analytica.
Damian Collins
The principle that underpinned what happened in the Cambridge Analytica scandal was the connection of Facebook profiles to the electoral register. If I understand my right hon. Friend the Minister correctly, what he is talking about would not necessarily change that situation. This could be information that the political campaign has gained anyway from a voter profile or from information that already exists in accounts it has access to on platforms such as Facebook; it would simply be attaching that, for the purposes of targeting, to people who voted in an election. The sort of personal data that Members of Parliament hold for the purposes of completing casework would not have been processed in that way. These proposals would not change in any way the ability to safeguard people’s data, and companies such as Cambridge Analytica will still seek other sources of open public data to complete their work.
Sir John Whittingdale
I think my hon. Friend is right. I have no doubt that we will go into these matters in more detail when we get to those provisions. As the hon. Member for Barnsley East knows, this measure makes a very narrow change to simply extend the existing time limit within which there is protection for elected representatives to conclude casework following a general election. As we will have opportunity in due course to look at the democratic engagement exemption, I hope she will be willing to support these narrow provisions.
Stephanie Peacock
I am grateful for the Minister’s reassurance, and we are happy to support them.
Stephanie Peacock
I beg to move amendment 69, in clause 6, page 9, leave out lines 7 to 20.
This amendment would remove the ability of the Secretary of State to amend Annex 2, so they could not make changes through secondary legislation to the way purpose limitation operates.
Stephanie Peacock
One of the key principles in article 5 of the EU GDPR is purpose limitation. The principle aims to ensure that personal data is collected by controllers only for specified, explicit and legitimate purposes. Generally speaking, it ensures that the data is not further processed in a manner that is incompatible with those purposes. If a controller’s purposes change over time, or they want to use data for a new purpose that they did not originally anticipate, they can go ahead only if the new purpose is compatible with the original purpose, they get the individual’s specific consent for the new purpose or they can point to a clear legal provision requiring or allowing the new processing in the public interest.
Specifying the reasons for obtaining data from the outset helps controllers to be accountable for their processing and helps individuals understand how their data is being used and whether they are happy with that, particularly where they are deciding whether to provide consent. Purpose limitation exists so that it is clear why personal data is being collected and what the intention behind using it is.
In any circumstance where we water down this principle, we reduce transparency, we reduce individuals’ ability to understand how their data will be used and, in doing so, we weaken assurances that people’s data will be used in ways that are fair and lawful. We must therefore think clearly about what is included in clause 6 and the associated annex. Indeed, many stakeholders, from Which? to Defend Digital Me, have expressed concern that what is contained in annex 2 could seriously undermine the principle of purpose limitation.
As Reset.tech illustrates, under the current regime, if data collected for a relatively everyday purpose, such as running a small business, is requested by a second controller for the purpose of investigating crime, the small business would need to assess whether this further processing—thereby making a disclosure of the data—was compatible with its original purpose. In many cases, there will be no link between the original and secondary purposes, and there are potential negative consequences for the data subjects. As such, the further processing would be unlawful, as it would breach the principle of purpose limitation.
However, under the new regime, all it would take for the disclosure to be deemed compatible with the original purpose is the second controller stating that it requires the data for processing in the public interest. In essence, this means that, for every item listed in annex 2, there are an increased number of circumstances in which data subjects’ personal information could be used for purposes outside their reasonable expectations. It seems logical, therefore, that whatever is contained in the list is absolutely necessary for the public good and is subject to the highest level of public scrutiny possible.
Instead, the clause gives the Secretary of State new Henry VIII powers to add to the new list of compatible purposes by secondary legislation whenever they wish, with no provisions made for consulting on, scrutinising or assessing the impact of such changes. It is important to remember here that secondary legislation is absolutely not a substitute for parliamentary scrutiny of primary legislation. Delegated legislation, as we have discussed, is rarely voted on, and even when it is, the Government of the day will win such a vote if they have a majority.
If there are other circumstances in which the Government think it should be lawful to carry out further processing beyond the original purpose, those should be in the Bill, rather than being left to Ministers to determine at a later date, avoiding the same level of scrutiny.
The Government’s impact assessment says that clarity on the reuse of data could help to fix the market failure caused by information gaps on how purpose limitation works. Providing such clarity is something we could all get behind. However, by giving the Secretary of State sweeping powers fundamentally to change how purpose limitation operates, the clause goes far beyond increasing clarity.
Improved and updated guidance on how the new rules surrounding reusing data work would be far more fruitful in providing clarity than further deregulation in this instance. If Ministers believe there are things missing from the clause and annex, they should discuss them here and now, rather than opening the back door to making further additions afterwards, and that is what the amendment seeks to ensure.
Sir John Whittingdale
The clause sets out the conditions under which the reuse of personal data for a new purpose is permitted. As the hon. Lady has said, the clause expands on the purpose limitation principle. That key principle of data protection ensures that an individual’s personal data is reused only in ways they might reasonably expect.
The current provisions in the UK GDPR on personal data reuse are difficult for controllers and individuals to navigate. That has led to uncertainty about when controllers can reuse personal data. The clause addresses the existing uncertainty around reusing personal data by setting out clearly when it is permitted. That includes when personal data is being reused for a very different purpose from that for which it was originally collected—for example, when a company might wish to disclose personal data for crime prevention.
The clause permits reuse of personal data by a controller when the new purpose is “compatible”; they get fresh consent; there is a research purpose; UK GDPR is being complied with, such as for anonymisation or pseudonymisation purposes; there is an objective in the public interest authorised by law; and certain specified objectives in the public interest set out in a limited list in schedule 2 are met. I will speak more about that when we come to the amendment and the debate on schedule 2.
The clause contains a power to add or amend conditions or remove conditions added by regulations from that list to ensure it can be kept up to date with any future developments in how personal data should be reused in the public interest. It also sets out restrictions on reusing personal data that the controller originally collected on the basis of consent.
The Government want to ensure that consent is respected to uphold transparency and maintain high data protection standards. If a person gives consent for their data to be processed for a specific purpose, that purpose should be changed without their consent only in limited situations, such as for certain public interest purposes, if it would be unreasonable to seek fresh consent. That acts as a safeguard to ensure that organisations address the possibility of seeking fresh consent before relying on any exemptions.
The restrictions around consent relate to personal data collected under paragraph 1(a) of article 6 of the UK GDPR, which came into force in May 2018. Therefore, they do not apply to personal data processed on the basis of consent prior to May 2018, when different requirements applied. By simplifying the rules on further processing, the clause will give controllers legal certainty on when they can reuse personal data and give individuals greater transparency. I support the clause standing part of the Bill.
Let me turn to amendment 69, which proposes to remove the power set out in the clause to amend the annex in schedule 2. As I have already said, schedule 2 will insert a new annex in the UK GDPR, which sets out certain specific public interest circumstances where personal data reuse is permitted. The list is strictly limited and exhaustive, so a power is needed to ensure that it is kept up to date with any future developments in how personal data is reused for important public interest purposes. That builds on an existing power in schedule 2 to the Data Protection Act 2018, where there is already the ability to make exceptions to the purpose limitation principle via secondary legislation.
The power in the clause also provides the possibility of narrowing a listed objective if there is evidence of any of the routes not being used appropriately. That includes limiting it, by reference, to the lawful ground of the original processing—for example, to prohibit the reuse of data that was collected on the basis of an individual’s consent.
I would like to reassure the hon. Lady that this power will be used only when necessary and in the public interest. That is why the clause contains a restriction on its use; it may be used only to safeguard an objective listed in article 23 of the UK GDPR. Clause 44 of the Bill also requires that the Secretary of State must consult the commissioner, and any other persons as the Secretary of State considers appropriate, before making any regulations.
On that basis, I hope the hon. Lady will accept that the amendment is unnecessary.
Stephanie Peacock
The purpose behind our amendment —this speaks to a number of our amendments—is that we disagree with the amount of power being given to the Secretary of State. For that reason, I would like to continue with my amendment.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 71, in schedule 2, page 138, line 16, leave out “states” and insert “confirms”.
This amendment would require a person who needs personal data for a purpose described in Article 6(1)(e) (a task carried out in the public interest or in the exercise of official authority vested in the controller) to confirm, and not merely to state, that they need the data for legitimate purposes.
The Chair
With this it will be convenient to discuss the following:
Amendment 70, in schedule 2, page 139, line 30, at end insert
“levied by a public authority”.
This amendment would clarify that personal data could be processed as a “legitimate interest” under this paragraph only when the processing is carried out for the purposes of the assessment or collection of a tax or duty or an imposition of a similar nature levied by a public authority.
That schedule 2 be the Second schedule to the Bill.
Stephanie Peacock
I will begin by addressing amendment 70, which seeks only to make a wording change so that the annex cannot be misinterpreted. Paragraph 10 of annex 2 outlines that further processing is to be treated as compatible with original purposes
“where the processing is carried out for the purposes of the assessment or collection of a tax or duty or an imposition of a similar nature.”
Which? has expressed concerns that that is much too vaguely worded, especially without a definition of “tax” or “duty” for the purposes of that paragraph, leaving the data open to commercial uses beyond the intention. Amendment 70 would close any potential loopholes by linking the condition to meeting a specific statutory obligation to co-operate with a public authority such as His Majesty’s Revenue and Customs.
Moving on, amendment 71 would correct a similar oversight in paragraph 1 of annex 2, which was identified by the AWO and Reset.tech. Paragraph 1 aims to ensure that processing is treated as compatible with the original purpose when it is necessary for making a disclosure of personal data to another controller that needs to process that data for a task in the public interest or in the exercise of official authority and that has requested that data. However, the Bill says that processing is to be treated as compatible with the original purpose where such a request simply “states” that the other person needs the personal data for the purposes of carrying out processing that is a matter of public task. At very least, those matters should surely be actually true, rather than just stated. Amendment 71 would close that loophole, so that the request must confirm a genuine need for data in completing a task in the public interest or exercising official authority, rather than simply being a statement of need.
Beyond those amendments, I wish only to reiterate the thoughts that I expressed during the debate on clause 6. Everything contained in the annex provides for further processing that is hidden from data subjects and may not be within their reasonable expectations. The reliance on the new annex should therefore be closely monitored to ensure that it is not being exploited, or we risk compromising the purpose limitation principle altogether. Does the Department plan to monitor how the new exemptions on the reuse of data are being relied on?
Sir John Whittingdale
As we have already discussed with clause 6, schedule 2 inserts a new annex into the UK GDPR. It sets out certain specific public interest circumstances in which personal data reuse is permitted regardless of the purpose for which the data was originally collected—for example, when the disclosure of personal data is necessary to safeguard vulnerable individuals. Taken together, clause 6 and schedule 2 will give controllers legal certainty on when they can reuse personal data and give individuals greater transparency.
Amendment 70 concerns taxation purposes, which are included in the list in schedule 2. I reassure the hon. Member for Barnsley East that the exemption for taxation is not new: it has been moved from schedule 2 to the Data Protection Act 2018. Indeed, the specific language in question goes back as far as 1998. We are not aware of any problems caused by that language.
The inclusion in the schedule of
“levied by a public authority”
would likely cause problems, since taxes and duties can be imposed only by law. Some must be assessed or charged by public authorities, but many become payable as a result of a person’s transactions or circumstances, without any intervention needed except to enforce collection if unpaid. They are not technically levied by a public authority. That would therefore lead to uncertainty and confusion about whether processing for certain important taxation purposes would be permitted under the provision.
I hope to reassure the hon. Lady by emphasising that taxation is not included in the annex 1 list of legitimate interests. That means that anyone seeking to use the legitimate interest lawful ground for that purpose would need to carry out a balancing-of-interests test, unless they were responding to a request for information from a public authority or other body with public tasks set out in law. For those reasons, I am afraid I am unable to accept the amendment, and I hope the hon. Lady will withdraw it.
Amendment 71 relates to the first paragraph in new annex 2 to the UK GDPR, as inserted by schedule 2. The purpose of that provision is to clarify that non-public bodies can disclose personal data to other bodies in certain situations to help those bodies to deliver public interest tasks in circumstances in which personal data might have been collected for a different purpose. For example, it might be necessary for a commercial organisation to disclose personal data to a regulator on an inquiry so that that body can carry out its public functions. The provision is tightly formulated and will permit disclosure from one body to another only if the requesting organisation states that it has a public interest task, that it has an appropriate legal basis for processing the data set out in law, and that the use of the data is necessary to safeguard important public policy or other objectives listed in article 23.
I recognise that the amendment is aimed at ensuring that the requesting organisation has a genuine basis for asking for the data, but suggest that changing one verb in the clause from “state” to “confirm” will not make a significant difference. The key point is that non-public bodies will not be expected to hand over personal data on entirely spurious grounds, because of the safeguards that I described. On that basis, I hope the hon. Lady will withdraw her amendment.
Stephanie Peacock
I am reassured by what the Minister said about amendment 70 and am happy not to move it, but I am afraid he has not addressed all my concerns in respect of amendment 71, so I will press it to a vote.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 74, in clause 7, page 10, line 34, at end insert—
“6. Where a controller—
(a) charges a fee for dealing with a request, in accordance with paragraph 2(a), or
(b) refuses to act on a request, in accordance with paragraph 2(b)
the controller must issue a notice to the data subject explaining the reasons why they are refusing to act on the request, or charging a fee for dealing with the request, and informing the subject of their right to make a complaint to the Commissioner and of their ability to seek to enforce this right through a judicial remedy.”
This amendment would oblige controllers to issue a notice to the data subject explaining the reasons why they are not complying with a request, or charging for a request, their right to make a complaint to the ICO, and their ability to seek to enforce this right through a judicial remedy.
The Chair
With this it will be convenient to discuss the following:
Amendment 73, in clause 7, page 12, line 20, at end insert—
“(1A) When considering the resources available to the recipient for the purposes of subsection (1)(c), no account may be taken of any lack of resources which is due to a failure by the recipient to appoint staff to relevant roles where the recipient has the resources to do so.”
This amendment would make it clear that, when taking into account “resources available to the controller” for deciding whether a subject access request is vexatious or excessive, this cannot include where the organisation has neglected to appoint staff, but has the finances or resources to do so.
Amendment 72, in clause 7, page 12, line 25, at end insert—
“(3) The Commissioner must prepare a code of practice under section 124A on the circumstances in which a request may be deemed vexatious or excessive.
(4) The code of practice prepared under subsection (3) must include examples of requests which may be deemed vexatious or excessive, and of requests which may be troublesome to deal with but which should not be deemed vexatious or excessive.”
This amendment would require the ICO to produce a code of practice on how the terms vexatious and excessive are to be applied, with examples of the kind of requests that may be troublesome to deal with, but are neither vexatious nor excessive.
Clause stand part.
Stephanie Peacock
I will speak first to clause 7 and amendment 72. Currently, everyone has the right to ask an organisation whether or not it is using or storing their personal data and to ask for copies of that data. That is called the right of access, and exercising that right is known as making a subject access request. Stakeholders from across the spectrum, including tech companies and civil society organisations, all recognise the value of SARs in helping individuals to understand how and why their data is being used and enabling them to hold controllers to account in processing their data lawfully.
The right of access is key to transparency and often underpins people’s ability to exercise their other rights as data subjects. After all, how is someone to know that their data is being used in an unlawful way, or in a way they would object to, if they are not able to ascertain whether their personal data is being held or processed by any particular organisation? For example, as the TUC highlighted in oral evidence to the Committee, the right of data subjects to make an information access request is a particularly important process for workers and their representatives, as it enables workers to gain access to personal data on them that is held by their employer and aids transparency over how algorithmic management systems operate.
It has pleased many across the board to see the Government roll back on their suggestion of introducing a nominal fee for subject access requests. However, the Bill introduces a new threshold for when controllers are able to charge a reasonable fee, or refuse a subject access request, moving from “manifestly unfounded or excessive” to “vexatious or excessive”. When deciding whether a request is vexatious or excessive, the Bill requires the controller to have regard to the circumstances of the subject access request. That includes, but is not limited to, the nature of the request; the relationship between subject and controller; the resources available to the controller; the extent to which the request repeats a previous request made by the subject; how long ago any previous request was made; and whether the request overlaps with other requests made by the data subject to the controller.
Stakeholders such as the TUC, the Public Law Project and Which? have expressed concerns that, as currently drafted, the terms that make up the new threshold are too subjective and could be open to abuse by controllers who may define any request they do not want to answer as vexatious or excessive. Currently, all there is in the Bill to guide controllers on how to apply the threshold is a non-exhaustive list of considerations; as I raised on Second Reading, if that list is non-exhaustive, what explicit protections will be in place to stop the application of terms such as “vexatious” and “excessive” being stretched and manipulated by controllers who simply do not want to fulfil the requests they do not like?
There are concerns that without further guidance even the considerations listed could be interpreted selfishly by controllers who lack a desire to complete a request. For example, given that many subject access requests come from applicants who are suspicious of how their data is being used, or have cause to believe their data is being misused, there is a high likelihood that the relationship any given applicant has with the controller has previously involved some level of friction and, perhaps, anger. The Bill prompts controllers to consider their relationship with a data subject when determining whether their request is vexatious; what is to stop a controller simply marking any data subject who has shared suspicions as “angry and vexatious”, thereby giving them grounds to refuse a genuine request?
Without clarity on how both the new threshold and the considerations apply, the ability of data subjects to raise a legal complaint about why their request was categorised as vexatious and excessive will be severely impeded. As AWO pointed out in oral evidence, that kind of legal dispute over a subject access request may be only the first stage of court proceedings for an individual, with a further legal case on the contents of the subject access request potentially coming afterwards. There simply should not be such a long timescale and set of legal proceedings in order for a person to exercise their fundamental data rights. Even the Information Commissioner himself, despite saying that he was clear on how the phrases “vexatious” and “excessive” should be applied, mentioned to the Committee that it was right to point out that such phrases were open to numerous interpretations.
The ICO is in a great position to provide clear statutory guidance on the application of the terms, with specific examples of when they do and do not apply, so that only truly bad-natured requests that are designed to exploit the system can be rejected or charged for. Such guidance would provide clarity on the ways in which a request might be considered troublesome but neither vexatious nor excessive. That way, controllers can be sure that they have dismissed, or charged for, only requests that genuinely pass the threshold, and data subjects can be assured that they will still be able to freely access information on how their data is being used, should they genuinely need or want it.
On amendment 73, one consideration that the Bill suggests controllers rely on when deciding whether a request is vexatious or excessive is the “resources available” to them. I assume that consideration is designed to operate in relation to the “excessive” threshold and the ability to charge. For example, when a subject access request would require work far beyond the means of the controller in question, the controller would be able to charge for providing the information needed, to ensure that they do not experience a genuine crisis of resources as a result of the request. However, the Bill does not explicitly express that, meaning the consideration in its vague form could be applied in circumstances beyond that design.
Indeed, if a controller neglected to appoint an appropriate number of staff to the responsibility of responding to subject access requests, despite having the finances and resources to do so, they could manipulate the consideration to say that any request they did not like was excessive, as a result of the limited resources available to respond. As is the case across many parts of the Bill, we cannot have legislation that simply assumes that people will act in good faith; we must instead have legislation that explicitly protects against bad-faith interpretations. The amendment would ensure just that by clarifying that a controller cannot claim that a request is excessive simply because they have neglected to arrange their resources in such a way that makes responding to the request possible.
On amendment 74, as is the case with the definition of personal data in clause 1, where the onus is placed on controllers to decide whether a living individual could reasonably be identified in any dataset, clause 7 again places the power—this time to decide whether a request is vexatious or excessive—in the hands of the controller.
As the ICO notes, transparency around the use of data is fundamentally linked to fairness, and is about being
“clear, open and honest with people from the start about who you are, and how and why you use their personal data”.
If a controller decides, then, that due to a request being vexatious or excessive they cannot provide transparency on how they are processing an individual’s data at that time, the very least they could do, in the interests of upholding fairness, is to provide transparency on their justification for classifying a request in that way. The amendment would allow for just that, by requiring controllers to issue a notice to the data subject explaining the grounds on which their request has been deemed vexatious or excessive and informing them of their rights to make a complaint or seek legal redress.
In oral evidence, the Public Law Project described the Bill’s lack of a requirement for controllers to notify subjects as to why their request has been rejected as a decision that creates an “information asymmetry”. That is particularly concerning given that it is often exactly that kind of information that is needed to access the other rights and safeguards outlined in the Bill and across GDPR. A commitment to transparency, as the amendment would ensure, would not only give data subjects clarity on why their request had been rejected or required payment, but provide accountability for controllers who rely on the clause, and thereby a deterrent from misusing it to reject any requests that they dislike. For controllers, the workload of issuing such notices should surely be less than that of processing a request that is genuinely vexatious and excessive, ensuring that the provision does not counterbalance the benefits brought to controllers through the clause.
Sir John Whittingdale
Let me start by recognising the importance of of subject access requests. I am aware that some have interpreted the change in the wording for grounds of refusal as a weakening. We do not believe that is the case.
On amendment 72, in our view the new “vexatious or excessive” language in the Bill gives greater clarity than there has previously been. The Government have set out parameters and examples in the Bill that outline how the term “vexatious” should be interpreted within a personal data protection context, to ensure that controllers understand.
Damian Collins
Does my right hon. Friend agree that the provisions will be helpful and important for organisations that gather data about public persons, and particularly oligarchs, who are very adept at using subject access requests to bombard and overwhelm a journalist or a small investigatory team that is doing important work looking into their business activities?
Sir John Whittingdale
I completely agree with my hon. Friend. That is an issue that both he and I regard as very serious, and is perhaps another example of the kind of legal tactic that SLAPPs—strategic lawsuits against public participation—represent, whereby oligarchs can frustrate genuine journalism or investigation. He is absolutely right to emphasise that.
It is important to highlight that controllers can already consider resource when refusing or charging a reasonable fee for a request. The Government do not wish to change that situation. Current ICO guidance sets out that controllers can consider resources as a factor when determining if a request is excessive.
The new parameters are not intended to be reasons for refusal. The Government expect that the new parameters will be considered individually as well as in relation to one another, and a controller should consider which parameters may be relevant when deciding how to respond to a request. For example, when the resource impact of responding would be minimal even if a large amount of information was requested—such as for a large organisation—that should be taken into account. Additionally, the current rights of appeal allow a data subject to contest a refusal and ultimately raise a complaint with the ICO. Those rights will not change with regard to individual rights requests.
Amendment 74 proposes adding more detail on the obligations of a controller who refuses or charges for a request from a data subject. The current legislation sets out that any request from a data subject, including subject access requests, is to be responded to. The Government are retaining that approach and controllers will be expected to demonstrate why the provision applies each time it is relied on. The current ICO guidance sets out those obligations on controllers and the Government do not plan to suggest a move away from that approach.
The clause also states that it is for the controller to show that a request is vexatious or excessive in circumstances where that might be in doubt. Thus, the Government believe that the existing legislation provides the necessary protections. Following the passage of the Bill, the Government will work with the ICO to update guidance on subject access requests, which we believe plays an important role and is the best way to achieve the intended effect of the amendments. For those reasons, I will not accept this group of amendments; I hope that the hon. Member for Barnsley East will be willing to withdraw them.
I turn to clause 7 itself. As I said, the UK’s data protection framework sets out key data subject rights, including the right of access—the right for a person to obtain a copy of their personal data. A subject access request is used when an individual requests their personal data from an organisation. The Government absolutely recognise the importance of the right of access and do not want to restrict that right for reasonable requests.
The existing legislation enables organisations to refuse or charge a reasonable fee for a request when they deem it to be “manifestly unfounded or excessive”. Some organisations, however, struggle to rely on that in cases where it may be appropriate to do so, which as a consequence impacts their ability to respond to reasonable requests.
The clause changes the legislation to allow controllers to refuse or charge a reasonable fee for a request that is “vexatious or excessive”. The clause adds parameters for controllers to consider when relying on the “vexatious or excessive” exemption, such as the nature of the request and the relationship between the data subject and the controller. The clause also includes examples of the types of request that may be vexatious, such as those intended to cause distress, those not made in good faith or those that are an abuse of process.
We believe that the changes will give organisations much-needed clarity over when they can refuse or charge a reasonable fee for a request. That will ensure that controllers can focus on responding to reasonable requests, as well as other important data and organisational needs. I commend the clause to the Committee.
Stephanie Peacock
I appreciate that, as the Minister said, the Government do not intend the new terms to be grounds for refusal, but his remarks do not reassure me that that will not be the case. Furthermore, as I said on moving the amendment, stakeholders such as the TUC, Public Law and Which? have all expressed concern that, as drafted, those terms are too subjective. I will press the amendment to a vote.
Question put, That the amendment be made.
Sir John Whittingdale
Clause 8 makes changes to the time requirements to which an organisation must adhere when responding to a subject access request. Currently, organisations must respond to a subject access request within a set period; in the majority of cases, that is one month from receipt of the request. This clause enables organisations to “stop the clock” on the response time when an organisation is unable to respond without further information or clarification from an individual. For example, when the controller has information on multiple data subjects with the same name, they may require further information to help to differentiate the data subject’s information from others’. Organisations must have a legitimate reason to pause the response time; once confirmation is received from the data subject, the original time obligations resume.
The clause will also enable organisations to extend the period permitted for law enforcement and the intelligence services to respond to complex requests by two further months in certain circumstances. This replicates the existing provisions applicable to processing requests under the UK GDPR. Currently, all subject access requests received under the law enforcement and intelligence services regimes must be actioned within one month, irrespective of the complexity or number of requests received from an individual. Consequently, complex or confusing requests can disproportionately burden public bodies operating under those regimes, creating resource pressures.
Clause 8 will rectify the disparity currently existing between processing regimes and put law enforcement and intelligence services organisations on an equal footing to UK GDPR organisations. That will also provide a consistent framework for organisations operating under more than one regime at the same time. The clause also brings clarity on how best to respond to a confusing or complex request, ensuring that organisations do not lose time while seeking this clarification and can instead focus on responding to a request. On that basis, I urge that clause 8 stand part of the Bill.
Stephanie Peacock
I expressed my thoughts on the value and importance of subject access requests when we debated clause 7, and most of the same views remain pertinent here. Clause 8 allows for subject access requests to be extended where the nature of the request is complex, or due to volume. Some civil society groups, including Reset.tech, have expressed concern that that could mean that requests are unduly delayed for months, reflecting concern that they could be disregarded altogether, which was discussed when we debated clause 7. With that in mind, can the Minister tell us what protections will be in place to ensure that data controllers do not abuse the new ability to extend subject access requests, particularly by using the excuse that it is a large amount of data, in order to delay requests that they simply do not wish to respond to?
The clause provides some clarity on clause 7 by demonstrating that just because a request is lengthy or comes in combination with many others, it is not necessarily excessive as the clause gives controllers the option to extend the timeframe for dealing with requests that are high in volume. Of course, we do not want to unnecessarily delay requests, but allowing controllers to manage their load within a reasonable extended timeframe can act as a safeguard against their automatically relying on the “excessive” threshold. With that in mind, I am happy for the clause to stand part. However, I reiterate that my comments on clause 7 should be referred to.
Sir John Whittingdale
May I briefly respond to the hon. Lady’s comments? I assure her that controllers will not be able to stop the clock for all subject access requests—only for those where they reasonably require further information to be able to proceed with responding. Once that information has been received from a data subject, the clock resumes and the controller must proceed with responding to the request within the applicable time period, which is usually one month from when the controller receives the request information. A data subject who has provided the requested information would also be able to complain to a controller, and ultimately to the Information Commissioner’s Office, if they feel that their request has not been processed within the appropriate time. I hope the hon. Lady will be assured that there are safeguards to ensure that this power is not abused.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Clause 9
Information to be provided to data subjects
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
Clause 9 provides researchers, archivists and those processing personal data for statistical purposes with a new exemption from providing certain information to individuals when they are reusing datasets for a different purpose, which will help to ensure that important research can continue unimpeded. The new exemption will apply when the data was collected directly from the individual, and can be used only when providing the additional information would involve a disproportionate effort. There is already an exemption from this requirement where the personal data was collected from a different source.
The clause also adds a non-exhaustive list of examples of factors that may constitute a disproportionate effort. This list is added to both the new exemption in article 13 and the existing exemption found in article 14. Articles 13 and 14 of the UK GDPR set out the information that must be provided to data subjects at the point of data collection: article 13 covers circumstances where data is directly collected from data subjects, and article 14 covers circumstances where personal data is collected indirectly—for example, via another organisation. The information that controllers must provide to individuals includes details such as the identity and contact details of the controller, the purposes of the processing and the lawful basis for processing the data.
Given the long-term nature of research, it is not always possible to meaningfully recontact individuals. Therefore, applying a disproportionate effort exemption addresses the specific problem of researchers wishing to reuse data collected directly from an individual. The exemption will help ensure that important research can continue unimpeded. The clause also makes some minor changes to article 14. Those do not amend the scope of the exemption or affect its operation, but make it easier to understand.
I now turn to clause 10, which introduces an exemption relating to legally professionally privileged data into the law enforcement regime, mirroring the existing exemptions under the UK GDPR and the intelligence services regime. As a fundamental principle of our legal system, legal professional privilege protects confidential communications between professional legal advisers and their clients. The existing exemption in the UK GDPR restricts an individual’s right to access personal data that is being processed or held by an organisation, and to receive certain information about that processing.
However, in the absence of an explicit exemption, organisations processing data under the law enforcement regime, for a law enforcement purpose rather than under the UK GDPR, must rely on ad hoc restrictions in the Data Protection Act. Those require them to evaluate and justify its use on a case-by-case basis, even where legal professional privilege is clearly applicable. The new exemption will make it simpler for organisations that process data for a law enforcement purpose to exempt legally privileged information, avoiding the need to justify the use of alternative exemptions. It will also clarify when such information can be withheld from the individual.
Hon. Members might wonder why an exemption for legal professional privilege was not included under the law enforcement regime of the Data Protection Act in the first place. The reason is that we faithfully transposed the EU law enforcement directive, which did not contain such an exemption. Following our exit from the EU, we are taking this opportunity to align better the UK GDPR and the law enforcement regime, thereby simplifying the obligations for organisations and clarifying the rules for individuals.
Stephanie Peacock
The impact of clause 9 and the concerns around it should primarily be understood in relation to the definition contained in clause 2, so I refer hon. Members to my remarks in the debate on clause 2. I also refer them to my remarks on purpose limitation in clause 6. To reiterate both in combination, I should say that purpose limitation exists so that it is clear why personal data is being collected, and what the intention is behind its use. That means that people’s data should not largely be reused in ways not initially collected for, unless a new legal basis is obtained.
It is understandable that, where genuine scientific, historical and statistical research is occurring, and there is disproportionate effort to provide the information required to data subjects, there may be a need for exemption and to reuse data without informing the subject. However, that must be done only where strictly necessary. We must be clear that, unless there are proper boundaries to the definition of scientific data, this could be interpreted far too loosely.
I am concerned that, without amendment to clause 2, clause 9 could extend the problem of scientific research being used as a guise for using people’s personal data in malicious or pseudoscientific ways. Will the Minister tell us what protections will be in place to ensure that people’s data is not reused on scientific grounds for something that they would otherwise have objected to?
On clause 10, I will speak more broadly on law enforcement processing later in the Bill, but it is good to have clarity on the legal professional privilege exemptions. I have no further comments at this stage.
Carol Monaghan (Glasgow North West) (SNP)
What we are basically doing is changing the rights of individuals, who would previously have known when their data was used for a purpose other than that for which it was collected. The terms
“scientific or historical research, the purposes of archiving in the public interest or statistical purposes”
are very vague, and, according to the Public Law Project, open to wide interpretation. Scientific research is defined as
“any research that can reasonably described as scientific, whether publicly or privately funded”.
I ask the Minister: what protections are in place to ensure that private companies are not given, through this clause, a carte blanche to use personal data for the purpose of developing new products, without the need to inform the data subject?
Sir John Whittingdale
These clauses relate to one of the fundamental purposes of the Bill, which is to facilitate genuine scientific research—obviously, that carries with it huge potential benefits in the areas of tackling disease or other scientific advances. We debated the definition of scientific research earlier in relation to clause 2. We believe that the definition is clear. In this particular case, the use of historical data can be very valuable. It is simply impractical for some organisations to reobtain consent when they may not even know where original data subjects are now located.
The Chair
Order. I apologise to the Minister. He can resume his remarks at 2 o’clock, when we meet again in this room but, it being 11.25 am, the Committee is now adjourned.
Data Protection and Digital Information (No. 2) Bill (Fourth sitting)
Tuesday 16th May 2023
(11 months, 4 weeks ago)
Public Bill CommitteesRead Full debate Data Protection and Digital Information Bill 2022-23 View all Data Protection and Digital Information Bill 2022-23 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 May 2023 - (16 May 2023)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 6 - Question accordingly agreed to.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 6 - Question accordingly agreed to.
The Minister for Data and Digital Infrastructure (Sir John Whittingdale)
When the Committee adjourned this morning, I was nearly at my conclusion; I was responding to points made by the hon. Member for Barnsley East and by the hon. Member for Glasgow North West, who has not yet rejoined us. I was saying that the exemption applies where the data originally collected is historic, where to re-contact to obtain consent would require a disproportionate effort, and where that data could be of real value in scientific research. We think that there is a benefit to research and we are satisfied that the protection is there. There was some debate about the definition of scientific research, which we covered earlier; that is a point that is appealable to the Information Commissioner’s Office. On the basis of what I said earlier, and that assurance, I hope that the Committee will agree to the clause.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10 ordered to stand part of the Bill.
Clause 11
Automated decision-making
Stephanie Peacock (Barnsley East) (Lab)
I beg to move amendment 78, in clause 11, page 18, line 13, after “subject” insert “or decision subject”.
This amendment, together with Amendments 79 to 101, would apply the rights given to data subjects by this clause to decision subjects (see NC12).
The Chair
With this it will be convenient to discuss the following:
Amendment 79, in clause 11, page 18, line 15, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 80, in clause 11, page 18, line 16, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 81, in clause 11, page 18, line 27, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 82, in clause 11, page 18, line 31, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 83, in clause 11, page 19, line 4, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 84, in clause 11, page 19, line 7, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 85, in clause 11, page 19, line 11, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 86, in clause 11, page 19, line 12, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 87, in clause 11, page 19, line 13, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 88, in clause 11, page 19, line 15, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 89, in clause 11, page 19, line 17, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 90, in clause 11, page 19, line 26, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 91, in clause 11, page 20, line 8, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 92, in clause 11, page 20, line 10, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 93, in clause 11, page 20, line 12, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 94, in clause 11, page 20, line 23, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 95, in clause 11, page 20, line 28, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 96, in clause 11, page 20, line 31, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 97, in clause 11, page 20, line 35, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 98, in clause 11, page 20, line 37, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 99, in clause 11, page 20, line 39, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 100, in clause 11, page 21, line 1, leave out “data”.
See explanatory statement to Amendment 78.
Amendment 101, in clause 11, page 21, line 31, after “subject” insert “or decision subject”.
See explanatory statement to Amendment 78.
Amendment 106, in clause 27, page 47, line 27, after “subjects”, insert “decision subjects,”.
This amendment would require the ICO to have regard to decision subjects (see NC12) as well as data subjects as part of its obligations.
Amendment 108, in clause 29, page 53, line 11, at end insert—
“(ba) decision subjects;”.
This amendment, together with Amendments 109 and 110, would require codes of conduct produced by the ICO to have regard to decision subjects (see NC12) as well as data subjects.
Amendment 109, in clause 29, page 53, line 13, at end insert—
“(d) persons who appear to the Commissioner to represent the interests of decision subjects.”.
See explanatory statement to Amendment 108.
Amendment 110, in clause 29, page 53, line 21, after “subjects”, insert “, decision subjects”.
See explanatory statement to Amendment 108.
New clause 12—Decision subjects—
“(1) The UK GDPR is amended as follows.
(2) In Article 4, after paragraph (A1), insert—
‘(A1A) “decision subject” means an identifiable individual who is subject to data-based and automated decision making;’”.
This new clause would provide a definition of “decision subjects”, enabling them to be given rights similar to those given to data subjects (see, for example, Amendment 78).
Stephanie Peacock
I am pleased to speak to new clause 12, which would insert a definition of decision subjects, and to amendments 79 to 101, 106 and 108 to 110, which seek to insert rights and considerations for decision subjects that mirror those of data subjects at various points throughout the Bill.
Most of our data protection legislation operates under the assumption that the only people affected by data-based and automated decision making are data subjects. The vast majority of protections available for citizens are therefore tied to being a data subject: an identifiable living person whose data has been used or processed. However, as Dr Jeni Tennison described repeatedly in evidence to the Committee, that assumption is unfortunately flawed. Although data subjects form the majority of those affected by data-based decision making, they are not the only group of people impacted. It is becoming increasingly common across healthcare, employment, education and digital platforms for algorithms created and trained on one set of people to be used to reach conclusions about another, wider set of people. That means that an algorithm can make an automated decision that affects an individual to a legal or similarly significant degree without having used their personal data specifically.
For example, as Connected by Data points out, an automated decision could be made about a neighbourhood area, such as a decision on gritting or a police patrol route, based on personal data about some of the people who live in that neighbourhood, with the outcome impacting even those residents and visitors whose data was not directly used. For those who are affected by the automated decision but are not data subjects, there is currently no protection, recognition or method of redress.
The new clause would therefore define the decision subjects who are impacted by the likes of AI without their data having been used, in the hope that we can give them protections throughout the Bill that are equal to those for data subjects, where appropriate. That is especially important because special category data is subject to stricter safeguards for data subjects but not for decision subjects.
Connected by Data illustrates that point using the following example. Imagine a profiling company that uses special category data about the mental health of some volunteers to construct a model that predicts mental health conditions based on social media feeds, which would not be special category data. From that information, the company could give an estimate of how much time people are likely to take off work. A recruitment agency could then use that model to assess candidates and reject those who are likely to have extended absences. The model would never use any special category data about the candidates directly, but those candidates would have been subject to an automated decision that made assumptions about their own special category data, based on their social media feeds. In that scenario, by virtue of being a decision subject, the individual would not have the right to the same safeguards as those who were data subjects.
Furthermore, there might be scenarios in which someone was subject to an automated decision despite having consciously prevented their personal data from being shared. Connected by Data illustrates that point by suggesting that we consider a person who has set their preferences on their web browser so that it does not retain tracking cookies or share information such as their location when they visit an online service. If the online service has collected data about the purchasing patterns of similarly anonymous users and knows that such a customer is willing to pay more for the service, it may automatically provide a personalised price on that basis. Again, no personal data about the purchaser will have been used in determining the price that they are offered, but they will still be subject to an automated decision based on the data of other people like them.
What those scenarios illustrate is that it is whether an automated decision affects an individual in a legal or similarly significant way that should be central to their rights, rather than whether any personal data is held about them. If the Bill wants to unlock innovation around AI, automated decisions and the creative use of data, it is only fair that that be balanced by ensuring that all those affected by such uses are properly protected should they need to seek redress.
This group of amendments would help our legislative framework to address the impact of AI, rather than just its inputs. The various amendments to clause 11 would extend to decision subjects rights that mirror those given to data subjects regarding automated decision making, such as the right to be informed, the right to safeguards such as contesting a decision and the right to seek human intervention. Likewise, the amendments to clauses 27 and 29 would ensure that the ICO is obliged to have regard to decision subjects both generally and when producing codes of conduct.
Finally, to enact the safeguards to which decision subjects would hopefully be entitled via the amendments to clause 11, the amendment to clause 39 would allow decision subjects to make complaints to data controllers, mirroring the rights available to data subjects. Without defining decision subjects in law, that would not be possible, and members of the general public could be left without the rights that they deserve.
Sir John Whittingdale
I am very much aware of the concern about automated decision making. The Government share the wish of the hon. Member for Barnsley East for all those who may be affected to be given protection. Where I think we differ is that we do not recognise the distinction that she tries to make between data subjects and decision subjects, which forms the basis of her amendments.
The hon. Lady’s amendments would introduce to the UK GDPR a definition of the term “decision subject”, which would refer to an identifiable individual subject to data- based and automated decision making, to be distinguished from the existing term “data subject”. The intended effect is to extend the requirements associated with provisions related to decisions taken about an individual using personal data to those about whom decisions are taken, even though personal information about them is not held or used to take a decision. It would hence apply to the safeguards available to individuals where significant decisions are taken about them solely through automated means, as amendments 78 to 101 call for, and to the duties of the Information Commissioner to have due regard to decision subjects in addition to data subjects, as part of the obligations imposed under amendment 106.
I suggest to the hon. Lady, however, that the existing reference to data subjects already covers decision subjects, which are, if you like, a sub-group of data subjects. That is because even if an individual’s personal data is not used to inform the decision taken about them, the fact that they are identifiable through the personal data that is held makes them data subjects. The term “data subject” is broad and already captures the decision subjects described in the hon. Lady’s amendment, as the identification of a decision subject would make them a data subject.
I will not, at this point, go on to set out the Government’s wider approach to the use of artificial intelligence, because that is somewhat outside the scope of the Bill and has already been set out in the White Paper, which is currently under consultation. Nevertheless, it is within that framework that we need to address all these issues.
Damian Collins (Folkestone and Hythe) (Con)
I have been closely following the speeches of the Minister and the hon. Member for Barnsley East. The closest example that I can think of for this scenario is the use of advertising tools such as lookalike audiences on Facebook and customer match on YouTube, where a company holding data about users looks to identify other customers who are the closest possible match. It does not hold any personal data about those people, but the platform forms the intermediary to connect them. Is the Minister saying that in that situation, as far as the Bill is concerned, someone contacted through a lookalike audience has the same rights as someone who is contacted directly by an advertiser that holds their data?
Sir John Whittingdale
Essentially, if anybody is affected by automated decision making on the basis of the characteristics of another person whose data is held—in other words, if the same data is used to take a decision that affects them, even if it does not personally apply to them—they are indeed within the broader definition of a data subject. With that reassurance, I hope that the hon. Member for Barnsley East will consider withdrawing her amendment.
Stephanie Peacock
I appreciate the Minister’s comments, but the point is that the data could be used—I gave the example that it might affect a group of residents who were not identifiable but were still subject to that data—so I am not quite sure that I agree with the Minister’s comparison. As the use of automated decision making evolves and expands, it is crucial that even if a person’s data is not being used directly, they are afforded protections and rights if they are subject to the outcome. I would like to press my amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 77, in clause 11, page 19, line 12, at end insert
“and about the safeguards available to the subject in accordance with this paragraph and any regulations under Article 22D(4);”.
This amendment would require controllers proactively to provide data subjects with information about their rights in relation to automated decision-making.
The Chair
With this it will be convenient to discuss amendment 120, in clause 11, page 19, line 12, at end insert—
“(aa) require the controller to inform the data subject when a decision described in paragraph 1 has been taken in relation to the data subject;”.
This amendment would require a data controller to inform a data subject whenever a significant decision about that subject based entirely or partly on personal data was taken based solely on automated processing.
Stephanie Peacock
New article 22C of the UK GDPR, inserted by clause 11, sets out the safeguards available to those who are subject to automated decision making. One such safeguard is that controllers must provide information to subjects relating to significant decisions taken through solely automated processing. That includes notifying subjects when a decision has been taken or informing them of the logic involved in producing that decision.
That provision is important. After all, how can the subject of an automated decision possibly exercise their other rights surrounding that decision if they do not even know that it has been taken on a solely automated basis? By the same logic, however, the average member of the general public is not likely to be aware of those other rights in the first place, including the rights to express their point of view with respect to automated decisions, to contest them and to seek human intervention.
Amendment 77 therefore recommends that as well as controllers being required to inform subjects about the decision, the same notice should be used as a vehicle to ensure that the subject is aware of the rights and safeguards in place to protect them and offer them redress. It would require no extra administrative effort on behalf of the controllers, because they will already be informing subjects. A proactive offer of redress may also encourage controllers to have extra regard to the way in which their automated systems are operating, in order to avoid unlawful activity that may cause them to receive a complaint or a request for human intervention.
An imbalance of power between those who conduct automated decisions and those who are subject to them already largely exists. Those who conduct decisions hold the collective power of the data, whereas each individual subject to a decision has only their own personal information; I will address that issue in greater detail in relation to other amendments, but there is no reason why that power imbalance should be exacerbated by hiding an individual’s own rights from them. If the intention of new article 22C is, as stated, to ensure that controllers are required to review and correct decisions that have produced a systematically wrongful outcome, there should be no issue with ensuring that the mechanism is properly communicated to the people it purports to serve. I am pleased to see that the hon. Member for Glasgow North West has tabled a similar amendment.
Carol Monaghan (Glasgow North West) (SNP)
I rise to speak to my amendment 120. The explanatory notes to the Bill clarify that newly permitted automated decisions will not require the existing legal safeguard of notification, stating only:
“Where appropriate, this may include notifying data subjects after such a decision has been taken”.
Clause 11 would replace article 22 of the GDPR, which regulates AI decision making, with new articles 22A to 22D. According to Connected by Data, it is built on the faulty assumption that the people who are affected by automated decision making are data subjects—identifiable individuals within the data used to make the automated decision. However, now that AI decisions can be based on information about other people, it is becoming increasingly common for algorithms created through training on one set of people to be used to reach conclusions about another set.
A decision can be based on seemingly innocuous information such as someone’s postcode or whether they liked a particular tweet. Where such a decision has an impact on viewing recommendations for an online player, we would probably not be that concerned, but personal data is being used more and more to make decisions that affect whole groups of people rather than identified individuals. We need no reminding of the controversy that ensued when Ofqual used past exam results to grade students during the pandemic.
Another example might be an electricity company getting data from its customers about home energy consumption. Based on that data, it could automatically adjust the time of day at which it offered cheaper tariffs. Everyone who used the electricity company would be affected, whether data about their energy consumption patterns were used to make the decision or not. It is whether an automated decision has a legal or similarly significant effect on an individual that should be relevant to their rights around automated decision making.
Many of the rights and interests of decision subjects are protected through the Equality Act 2010, as the Committee heard in oral evidence last week. What is not covered by other legislation, however, is how data can be used in automated decisions and the rights of decision subjects to be informed about, control and seek redress around automated decisions with a significant effect on them. According to Big Brother Watch:
“This is an unacceptable dilution of a critical safeguard that will not only create uncertainty for organisations seeking to comply, but could lead to vastly expanded ADM operating with unprecedented opacity.”
Amendment 120 would require a data controller to inform a data subject whenever a significant decision about that subject was based solely on automated processing. I am pleased that the hon. Member for Barnsley East has tabled a similar amendment, which I support.
Sir John Whittingdale
The Government absolutely share hon. Members’ view of the importance of transparency. We agree that individuals who are subject to automated decision making should be made aware of it and should have information about the available safeguards. However, we feel that those requirements are already built into the Bill via article 22C, which will ensure that individuals are provided with information as soon as is practicable after such decisions have been taken. This will need to include relevant information that an individual would require to contest such decisions and seek human review of them.
The reforms that we propose take an outcome-focused approach to ensure that data subjects receive the right information at the right time. The Information Commissioner’s Office will play an important role in elaborating guidance on what that will entail in different circumstances.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
If I understood the Minister correctly, he said that decision subjects are a subset of data subjects. Can he envisage any circumstances in which a decision subject is not included within the group “data subjects”?
Sir John Whittingdale
It is certainly our view that anybody who is affected by an automated decision made on the basis of data held about individuals themselves becomes a data subject, so I think the answer to the honourable Lady’s question is no. As I said, the Information Commissioner’s Office will provide guidance in this area. If such a situation does arise, obviously it will need to be considered.The hon. Members for Barnsley East and for Glasgow North West asked about making information available to all those affected, and about safeguards, which we think are contained within the requirements under article 22C.
Damian Collins
Further to the point that was made earlier, let us say that a Facebook user was targeted with an advert that was based on their protected characteristics data—data relevant to their sexual orientation, for example—but that user said that they had never shared that information with the platform. Would they have the right to make a complaint, either to the advertiser or to the platform, for inferring that data about them and making it available to a commercial organisation without their informed consent?
Sir John Whittingdale
They would obviously have that right, and indeed they would ultimately have the right to appeal to the Information Commissioner if they felt that they had been subjected unfairly to a decision where they had not been properly informed of the fact. On the basis of what I have said, I hope the hon. Member for Barnsley East might withdraw her amendment.
Stephanie Peacock
I appreciate the Minister’s comment, but the Government protection does not go as far as we would like. Our amendment speaks to the potential imbalance of power in the use of data and it would not require any extra administrative effort on behalf of controllers. For that reason, I will press it to a vote.
Question put, That the amendment be made.
Carol Monaghan
I will not move it formally, Mr Hollobone, but I may bring it back on Report.
Stephanie Peacock
I beg to move amendment 76, in clause 11, page 19, line 34, at end insert—
“5A. The Secretary of State may not make regulations under paragraph 5 unless—
(a) following consultation with such persons as the Secretary of State considers appropriate, the Secretary of State has published an assessment of the impact of the change to be made by the regulations on the rights and freedoms of data and decision subjects (with particular reference to children),
(b) the Commissioner has reviewed the Secretary of State’s statement and published a statement of the Commissioner’s views on whether the change should be made, with reasons, and
(c) the Secretary of State has considered whether to proceed with the change in the light of the Commissioner’s statement.”
This amendment would make the Secretary of State’s ability to amend the safeguards for automated decision-making set out in new Articles 22A to D subject to a requirement for consultation with interested parties and with the Information Commissioner, who would be required to publish their views on any proposed change.
The Chair
With this it will be convenient to discuss amendment 75, in clause 11, page 19, line 36, at end insert—
“7. The Commissioner must prepare a code of practice under section 124A of the Data Protection Act 2018 on the interpretation of references in this Regulation to “meaningful human involvement” and “similarly significant”.
8. The code of practice prepared under paragraph 7 must include examples of the kinds of processing which do, and which do not, fall within the definitions which use the terms referred to in that paragraph.”
This amendment would require the ICO to produce a code of practice on the interpretation of references to “meaningful human involvement” and “similarly significant” in connection with automated decision-making, with examples of the kinds of processing that would not count as falling within these definitions.
Stephanie Peacock
I will begin by discussing amendment 76 in the context of the general principles of this clause. The rise of AI and algorithmic decision making has happened at an unprecedented speed—so much so, in fact, that when the first version of this Bill was published, the likes of ChatGPT were not even launched yet. Now we live in a world where the majority of people across the country have been affected by or have used some form of AI-based or automated decision-making system.
When algorithms and automation work well, not only do they reduce administrative burdens, increase efficiency and free up capacity for further innovation and growth; they can also have remarkable outcomes. Indeed, PwC UK suggests that UK GDP could be up to 10.3% higher in 2030 as a result of artificial intelligence. AI is already being used to develop vaccines and medicines, for example, which are saving lives across the country and the entire world. Labour’s belief, outlined in our industrial strategy, is that the UK should be leading the world on efforts to ensure that transformative AI is aligned with the public interest in that way, and that regulations ensure we are well positioned to do that.
Despite the potential of AI to be harnessed for the public good, however, where things go wrong, the harms can be serious. The first way in which automation is prone to go wrong is by producing discriminatory outcomes. An algorithm, although intelligent in itself, is only ever as fair as the information and the people used to train it. That means that where biases exist in our world, they can become entrenched in our automated systems too. In in 2020, thousands of students in England and Wales received A-level exam results where, due to the pandemic, their grades were determined by an algorithm rather than by sitting an exam. At the hands of the automated system, almost 40% of students received grades lower than they had anticipated, with pupils from certain backgrounds and areas such as those that I represent disproportionately impacted by the lower marks. Within days of the results being published, there was widespread public outcry about the distress caused, as well as threats of mass protests and legal action. Similarly, Amazon was reported to have used an AI tool that systematically penalised women in job application processes. The tool had been trained on a decade’s worth of CVs, predominantly submitted by men. As such examples show, AI on its own can produce discriminatory outcomes. Our regulation must therefore recognise that and seek to protect against it.
The second major way in which automated decision making tends to go wrong, or can be abused, is when it makes legal or critical decisions about our lives based on mismanaged, abused or faulty systems. In the most extreme cases, automated systems can even contribute to deciding whether someone’s employment will be terminated, with grave consequences when that goes wrong. As mentioned in the oral evidence sessions, for example, last month the courts upheld the finding that three UK-based Uber drivers were robotically fired without redress, having been accused of fraudulent activity on the basis of an automated detection system. The court found that human involvement in the firing process was
“not much more than a purely symbolic act”,
and that implementing such a decision without a mechanism for appeal was unjust. Where livelihoods are at risk, data regulation must ensure that proper safeguards are in place to protect against mismanaged and faulty automated systems.
Serious harms sometimes occur under the existing system, but there are laws under the GDPR that try to protect us against discriminatory outcomes and mismanagement. Indeed, article 21 of GDPR gives a data subject the right to object at any time to the processing of their personal data, unless the controller can demonstrate “compelling legitimate grounds” for the processing to override the data subject’s rights. In conjunction, article 22 prevents data subjects from being subject to a decision based solely on automated processing that has significant effects, except in a few circumstances, including when it is based on explicit consent and does not rely on special categories of data. In all cases where automated decision making is allowed, suitable measures to safeguard the data subjects’ rights and freedoms must also be implemented.
Albeit from different perspectives, stakeholders from techUK to the TUC have emphasised the importance of those articles and of the core principles that they promote. For example, the articles place an element of control in the hands of those that an automated decision affects. They emphasise the need for appropriate safeguards, and they consider the need for a different approach where sensitive data is concerned.
Where the clause adjusts the threshold on automated decision making to unlock innovation, therefore—as the likes of the A-level algorithm scandal and the robo- firings show—it is vital that any changes to regulation maintain and in some cases strengthen the principles set out in articles 21 and 22 of the GDPR. However, as the likes of the Ada Lovelace Institute, Which? and the TUC warn, in reality the Bill does the opposite, watering down existing protections. The amendments I have tabled are designed to rectify that.
Sir John Whittingdale
The hon. Lady began her remarks on the broader question of the ambition to ensure that the UK benefits to the maximum extent from the use of artificial intelligence. We absolutely share that ambition, but also agree that it needs to be regulated. That is why we have published the AI regulation White Paper, which suggests that it is most appropriate that each individual regulator should develop its own rules on how that should apply. I think in the case that she was quoting of those who had lost their jobs, maybe through an automated process, the appropriate regulator—in that case, presumably, the special employment tribunal —would need to develop its own mechanism for adjudicating decisions.
I will concentrate on the amendment. On amendment 76, we feel that clause 44 already provides for an overarching requirement on the Secretary of State to consult the Information Commissioner and other persons that she or he considers appropriate before making regulations under UK GDPR, including the measures in article 22. When the new clause 44 powers are used in reference to article 22 provisions, they will be subject to the affirmative procedure in Parliament. I know that the hon. Lady is not wholly persuaded of the merits of using the affirmative procedure, but it does mean that parliamentary approval will be required. Given the level of that scrutiny, we do not think it is necessary for the Secretary of State to have to publish an assessment, as the hon. Lady would require through her amendment.
On amendment 75, as we have already debated in relation to previous amendments, there are situations where non-statutory guidance, which can be produced without being requested under regulations made by the Secretary of State, may be more appropriate than a statutory code of practice. We believe that examples of the kinds of processing that do and do not fall within the definitions of the terms “meaningful human involvement” and “similarly significant” are best placed in non-statutory guidance produced by the ICO, as this will give the flexibility to amend and change the examples where necessary. What constitutes a significant decision or meaningful human involvement is often highly context-specific, and the current wording allows for some inter-pretability to enable the appropriate application of this provision in different contexts, rather than introducing an absolute definition that risks excluding decisions that ought to fall within this provision and vice versa. For that reason, we are not minded to accept the amendments.
Stephanie Peacock
I appreciate the Minister’s remarks about consultation and consulting relevant experts. He is right to observe that I am not a big fan of the affirmative procedure as a method of parliamentary scrutiny but I appreciate that it is included in this Bill as part of that.
I think the problem is that we fundamentally disagree on the power to change these definitions being concentrated in the hands of the Secretary of State. It is one thing to future-proof the Bill but another to allow the Secretary of State alone to amend things as fundamental as the safeguards offered here. I would therefore like to proceed to a vote.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 121, in clause 11, page 19, line 36, at end insert—
“7. When exercising the power to make regulations under this Article, the Secretary of State must have regard to the following statement of principles:
Digital information principles at work
1. People should have access to a fair, inclusive and trustworthy digital environment at work.
2. Algorithmic systems should be designed and used to achieve better outcomes: to make work better, not worse, and not for surveillance. Workers and their representatives should be involved in this process.
3. People should be protected from unsafe, unaccountable and ineffective algorithmic systems at work. Impacts on individuals and groups must be assessed in advance and monitored, with reasonable and proportionate steps taken.
4. Algorithmic systems should not harm workers’ mental or physical health, or integrity.
5. Workers and their representatives should always know when an algorithmic system is being used, how and why it is being used, and what impacts it may have on them or their work.
6. Workers and their representatives should be involved in meaningful consultation before and during use of an algorithmic system that may significantly impact work or people.
7. Workers should have control over their own data and digital information collected about them at work.
8. Workers and their representatives should always have an opportunity for human contact, review and redress when an algorithmic system is used at work where it may significantly impact work or people. This includes a right to a written explanation when a decision is made.
9. Workers and their representatives should be able to use their data and digital technologies for contact and association to improve work quality and conditions.
10. Workers should be supported to build the information, literacy and skills needed to fulfil their capabilities through work transitions.”
This amendment would insert into new Article 22D of the UK GDPR a requirement for the Secretary of State to have regard to the statement of digital information principles at work when making regulations about automated decision-making.
The Chair
With this it will be convenient to discuss amendment 122, in clause 11, page 22, line 2, at end insert—
“(7) When exercising the power to make regulations under this section, the Secretary of State must have regard to the following statement of principles:
Digital information principles at work
1. People should have access to a fair, inclusive and trustworthy digital environment at work.
2. Algorithmic systems should be designed and used to achieve better outcomes: to make work better, not worse, and not for surveillance. Workers and their representatives should be involved in this process.
3. People should be protected from unsafe, unaccountable and ineffective algorithmic systems at work. Impacts on individuals and groups must be assessed in advance and monitored, with reasonable and proportionate steps taken.
4. Algorithmic systems should not harm workers’ mental or physical health, or integrity.
5. Workers and their representatives should always know when an algorithmic system is being used, how and why it is being used, and what impacts it may have on them or their work.
6. Workers and their representatives should be involved in meaningful consultation before and during use of an algorithmic system that may significantly impact work or people.
7. Workers should have control over their own data and digital information collected about them at work.
8. Workers and their representatives should always have an opportunity for human contact, review and redress when an algorithmic system is used at work where it may significantly impact work or people. This includes a right to a written explanation when a decision is made.
9. Workers and their representatives should be able to use their data and digital technologies for contact and association to improve work quality and conditions.
10. Workers should be supported to build the information, literacy and skills needed to fulfil their capabilities through work transitions.”
This amendment would insert into new section 50D of the DPA2018 a requirement for the Secretary of State to have regard to the statement of digital information principles at work when making regulations about automated decision-making.
Stephanie Peacock
Amendments 121 and 122 would ensure that close attention is paid to the specific and unique circumstances of workers and the workplace when regulations are made under the clause. Indeed, as has already been referenced, the workplace has dramatically evolved in the last decade with the introduction and growth of technology. Whether it be Royal Mail using the postal digital assistant service to calculate the length of time posties spend walking, on doorsteps and standing still, or Amazon collecting data from handheld scanners to calculate how much time workers are spending “off task”, the digital monitoring of workers and subsequent use of that data by managers to assess performance, allocate work hours and decide on levels of pay, is on the rise.
Of course it is absolutely right that workplaces embrace technology. As Andrew Pakes of Prospect said to this Committee, our economy and the jobs that people do each day can be made better and more productive through the good deployment of technology—but the key is in the phrase “good deployment”, and in order to have deployment that works for the greater good, the rights and protections in place at work must keep pace with the changing nature of the workplace and these technological advancements. As Labour outlined in our industrial strategy, we want to do just that: harness data for the public good and ensure that data and the innovation it brings with it benefit our wider society, not just large corporations. Further, as is written in our “New Deal for Working People”, Labour wants to introduce new rights to protect workers in the modern age—for example by legislating to make proposals to introduce surveillance technologies subject to consultation and agreement of trade unions, or elected staff representatives where there is no trade union. After all, we can only truly unlock the benefits of data and become a world leader in this space if there is genuine public trust in these technologies. Good regulation breeds that trust.
Currently, however, and particularly in the Bill, the kinds of measures that would allow for good deployment of technology in the workplace—technology that operates in the greater interest including that of workers—are missing from the Government’s plans. Instead, as the TUC note, we are overseeing a growing power imbalance between worker and employer. This imbalance not only exists by the nature of the relationship, but it is now being exacerbated by the increasing level of knowledge and control that employers have over personal data as the workplace becomes digitised, compared with workers, who have very little power over, expertise on or access to such data.
Some impressive projects have sought to address that imbalance. For example, in 2020 Prospect worked with a coalition of unions, tech specialists and researchers to launch a beta version of WeClock, a free mobile app that helps workers to track and manage their own data such as that related to their location, their commute and when they are doing work on their phone. Those data profiles could then potentially be used by trade union campaigners to improve rights for workers. However, it should not just be down to individual projects to ensure that there is an equal balance between worker and employer. The Bill is a huge missed opportunity to write into law this balance and the principles that we should consider with regard to worker’s rights in the modern age.
The amendment, which has been prepared in partnership with the Institute for the Future of Work, is designed to right that wrong and ensure that where regulations are made about automated decision making, the full impact on workers is considered and strong principles about worker involvement are upheld. It will mean that the Secretary of State has to consider that people have an inclusive digital environment at work, that they should be protected from harms by algorithmic systems, and that they should be meaningfully consulted before and after the use of such tools. Further, under this amendment, consideration will be given to supporting workers in building the information, literacy and skills needed to understand these transitions in the workplace, thereby addressing some of the imbalances in knowledge and understanding.
I will end with an example of the real-life consequences of employment and data laws lagging behind technology. As was revealed by a report by the Worker Info Exchange just last month, 11 Just Eat couriers in the UK were recently robotically fired after receiving allegations of fraudulent activity identified by an automated system. According to the report, these workers were falsely accused of receiving “undeserved financial gain” relating to nominal waiting time payments at restaurants. Just Eat argued that the workers left the restaurant while continuing to claim waiting fees. However, GPS evidence showed that workers had stayed in the vicinity of the restaurant, usually in the car park. In each case, the worker collected the food and completed the delivery, and the average value of the alleged undeserved payments justifying the robo-firings was just £1.44. Cases such as those, in which real livelihoods are impacted and rights infringed for the sake of profit margins, can and must be avoided.
The amendment would take the first steps in ensuring that regulations around automated decision making centre the unique experience of workers. It also highlights the Bill’s failure to move towards a legislative framework in which a distinct focus is placed on harnessing data for the public good, which is something that Labour would have placed at the heart of a data Bill such as this one.
Chi Onwurah
I rise to speak briefly in support of the amendment tabled by my hon. Friend the Member for Barnsley East and to emphasise the points that she made regarding the importance of putting forward a vision for the protection of workers as the nature of working environments change. That is part of what the amendment’s “digital information principles at work” seek to do. I declare an interest: I worked for Ofcom as head of technology before coming to this House. That work highlighted to me the importance of forward-looking regulation. As my hon. Friend set out, artificial intelligence is not forward looking; it is here with us and in the workplace.
Many technological changes have made work more accessible to more people: covid showed us that we could work from many different locations—indeed, Parliament successfully worked from many locations across the country. Technological changes have also made work more productive, and companies and public sector organisations are taking advantage of that increase in productivity. But some technologies have accelerated bad employment practices, driven down standards and damaged the wellbeing of workers—for example, workplace surveillance technologies such as GPS tracking, webcam monitoring and click monitoring, which encroach on workers’ privacy and autonomy. My constituents often say that they feel that technology is something that is done to them, rather than something that has their consent and empowers them.
It is important, as I am sure that the Minister will agree, that working people welcome and embrace the opportunities that technology can bring, both for them and for the companies and organisations they work for, but that cannot happen without trust in those technologies. For that, there need to be appropriate regulation and safeguards. Surely the Minister must therefore agree that it is time to bring forward a suite of appropriate principles that follows amendment’s principle of
“a fair, inclusive and trustworthy digital environment at work.”
I hope that he cannot disagree with any of that.
If we are to get ourselves out of the economic stagnation and lack of growth of the last 10 or 13 years, we need to build on new technologies and productivity, but we cannot do that without the support and trust of people in the workforce. People must feel that their rights—new rights that reflect the new environment in the workplace—are safeguarded. I hope that the Minister will agree that the principles set out in the amendment are essential to building that trust, and to ensuring a working environment in which workers feel protected and able to benefit from advances in technology.
Sir John Whittingdale
I am grateful to the hon. Members for Barnsley East and for Newcastle upon Tyne Central for setting out the thinking behind the amendment. We share the view, as the hon. Member for Newcastle upon Tyne Central has just said, that those who are subject to artificial intelligence and automated decision making need to have trust in the process, and there need to be principles underlying the way in which those decisions are taken. In each case, the contributions go above and beyond the provision in the Bill. On what we are proposing regarding data protection, the changes proposed in clause 11 will reinforce and provide further clarification, as I have said, in respect of the important safeguards for automated decision making, which may be used in some workplace technologies. These safeguards ensure that individuals are made aware of and can seek human intervention on significant decisions that are taken about them through solely automated means. The reforms to article 22 would make clear employer obligations and employee rights in such scenarios, as we debated in the earlier amendments.
On the wider question, we absolutely recognise that the kind of deployment of technology in the workplace shown in the examples that have already been given needs to be considered across a wide range of different regulatory frameworks in terms of not just data protection law, but human rights law, legal frameworks regarding health and safety and, of course, employment law.
Chi Onwurah
I thank the Minister for his comments. I note that he castigates us, albeit gently, for tabling an amendment to this data protection Bill, while he argues that there is a need for wider legislation to enshrine the rights he apparently agrees with. When and where will that legislation come forward? Does he recognise that we waited a long time and listened to similar arguments about addressing online harms, but have ended up in a situation where—in 2023—we still do not have legislation on online harms? My question is: if not now, when?
Sir John Whittingdale
As I was Chair of the Culture, Media and Sport Committee in 2008 when we published a report calling for legislation on online safety, I recognise the hon. Lady’s point that these things take a long time—indeed, far too long—to come about. She calls for action now on governance and regulation of the use of artificial intelligence. She will know that last month the Government published the AI regulation White Paper, which set out the proposals for a proportionate outcomes-focused approach with a set of principles that she would recognise and welcome. They include fairness, transparency and explainability, and we feel that this has the potential to address the risks of possible bias and discrimination that concern us all. As she knows, the White Paper is currently out to consultation, and I hope that she and others will take advantage of that to respond. They will have until 21 June to do so.
I assure the hon. Lady and the hon. Member for Barnsley East that the Government are keenly aware of the need to move swiftly, but we want to do so in consultation with all those affected. The Bill looks at one relatively narrow aspect of the use of AI, but certainly the Government’s general approach is one that we are developing at pace, and we will obviously respond once the consultation has been completed.
Stephanie Peacock
The power imbalance between employer and worker has no doubt grown wider as technology has developed. Our amendment speaks to the real-life consequences of that, and to what happens when employment and data law lags behind technology. For the reasons that have been outlined by my hon. Friend the Member for Newcastle upon Tyne Central and myself, I would like to continue with my amendment.
Question put, That the amendment be made.
Sir John Whittingdale
We have, I think, covered a lot of ground already in the debates on the amendments. To recap, clause 11 reforms the rules relating to automated decision making in article 22 of the UK GDP and relevant sections of the Data Protection Act 2018. It expands the lawful grounds on which solely automated decision making that produces a legal or similarly significant effect on an individual may be carried out.
Currently, article 22 of the UK GDPR restricts such activity to a narrow set of circumstances. By expanding the available lawful grounds and ensuring we are clear about the required safeguards, these reforms will boost confidence that the responsible use of this technology is lawful, and will reduce barriers to responsible data use.
The clause makes it clear that solely automated decisions are those that do not involve any meaningful human involvement. It ensures that there are appropriate constraints on the use of sensitive personal data for solely automated decisions, and that such activities are carried out in a fair and transparent manner, providing individuals with key safeguards.
The clause provides three powers to the Secretary of State. The first enables the Secretary of State to describe cases where there is or is not meaningful human involvement in the taking of a decision. The second enables the Secretary of State to further describe what is and is not to be taken as having a significant effect on an individual. The third enables the introduction of further safeguards, and allows those already set out in the reforms to be amended but not removed.
The reformed section 50 of the Data Protection Act mirrors the changes in subsection (1) for solely automated decision making by law enforcement agencies for a law enforcement purpose, with a few differences. First, in contrast to article 22, the rules on automated decision making apply only where such decisions have an adverse legal or similarly significant effect on the individual. Secondly, the processing of sensitive personal data cannot be carried out for the purposes of entering into a contract with the data subject for law enforcement purposes.
The final difference relates to the safeguards for processing. This clause replicates the UK GDPR safeguards for law enforcement processing but also allows a controller to apply an exemption to them where it is necessary for a particular reason, such as to avoid obstructing an inquiry. This exemption is available only where the decision taken by automated means is reconsidered by a human as soon as reasonably practicable.
The subsections amending relevant sections of the Data Protection Act 2018, which apply to processing by or on behalf of the intelligence services, clarify that requirements apply to decisions that are entirely automated, rather than solely automated. They also define what constitutes a decision based on this processing. I have explained the provisions of the clause, and hope the Committee will feel able to accept it.
Stephanie Peacock
I talked at length about my views about the changes to automated decision making when we debated amendments 77, 120, 76, 75, 121 and 122. I have nothing further to add at this stage, but those concerns still stand. As such, I cannot support this clause.
Question put, That the clause stand part of the Bill.
Sir John Whittingdale
I beg to move amendment 17, in schedule 3, page 140, line 9, leave out sub-paragraph (3) and insert—
“(3) In paragraph 2—
(a) for “under Articles 15 to 22”, in the first place, substitute “arising under or by virtue of Articles 15 to 22D”, and
(b) for “his or her rights under Articles 15 to 22” substitute “those rights”.”.
This amendment adjusts consequential amendments of Article 12(2) of the UK GDPR for consistency with other amendments of the UK GDPR consequential on the insertion of new Articles 22A to 22D.
The Chair
With this it will be convenient to discuss the following:
Government amendments 18 to 23.
That schedule 3 be the Third schedule to the Bill.
Sir John Whittingdale
I can be reasonably brief on these amendments. Schedule 3 sets out the consequential changes needed to reflect references to the rules on automated decision making in reformed article 22 and section 50 and other provisions in the UK GDPR and the Data Protection Act 2018. Schedule 3 also sets out that section 14 of the Data Protection Act is repealed. Instead, reformed article 22 sets out the safeguards that must apply, regardless of the lawful ground on which such activity is carried out.
Government amendments 17 to 23 are minor technical amendments ensuring that references elsewhere in the UK GDPR and the Data Protection Act to the provisions on automated decision making are comprehensively updated to reflect the reforms related to such activity in this Bill. That means that references to article 22 UK GDPR are updated to the reformed article 22A to 22D provisions, and references to sections 49 and 50 in the Data Protection Act are updated to the appropriate new sections 50A to 50D.
Stephanie Peacock
I thank the Minister for outlining these technical changes. I have nothing further to add on these consequential amendments beyond what has already been discussed on clause 11 and the rules around automated decision making. Consistency across the statute book is important, but all the concerns I raised when discussing the substance of those changes remain.
Amendment 17 agreed to.
Amendments made: 18, in schedule 3, page 140, line 30, before second “in” insert “provided for”.
This amendment and Amendment 19 adjust consequential amendments of Article 23(1) of the UK GDPR for consistency with other amendments of the UK GDPR consequential on the insertion of new Articles 22A to 22D.
Amendment 19, in schedule 3, page 140, line 31, leave out “in or under” and insert
“arising under or by virtue of”.
See the explanatory statement for Amendment 18.
Amendment 20, in schedule 3, page 140, line 33, leave out from “protection” to end of line 35 and insert
“in accordance with, and with regulations made under, Articles 22A to 22D in connection with decisions based solely on automated processing (including decisions reached by means of profiling)”.
This amendment adjusts the consequential amendment of Article 47(2)(e) of the UK GDPR to reflect the way in which profiling is required to be taken into account for the purposes of provisions about automated decision-making (see Article 22A(2) inserted by clause 11).
Amendment 21, in schedule 3, page 140, line 36, leave out paragraph 10 and insert—
“10 In Article 83(5) (general conditions for imposing administrative fines)—
(a) in point (b), for “22” substitute “21”, and
(b) after that point insert—
“(ba) Article 22B or 22C (restrictions on, and safeguards for, automated decision-making);””.
This amendment adjusts the consequential amendment of Art 83(5) of the UK GDPR (maximum amount of penalty) for consistency with the consequential amendment of equivalent provision in section 157(2) of the Data Protection Act 2018.
Amendment 22, in schedule 3, page 141, line 8, leave out sub-paragraph (2) and insert—
“(2) In subsection (3), for “by the data subject under section 45, 46, 47 or 50” substitute “made by the data subject under or by virtue of any of sections 45, 46, 47, 50C or 50D”.”.
This amendment adjusts the consequential amendment of section 52(3) of the Data Protection Act 2018 for consistency with other amendments of that Act consequential on the insertion of new sections 50A to 50D.
Amendment 23, in schedule 3, page 141, line 9, leave out sub-paragraph (3) and insert—
“(3) In subsection (6), for “under sections 45 to 50” substitute “arising under or by virtue of sections 45 to 50D””.—(Sir John Whittingdale.)
This amendment adjusts the consequential amendment of section 52(6) of the Data Protection Act 2018 for consistency with other amendments of that Act consequential on the insertion of new sections 50A to 50D.
Schedule 3, as amended, agreed to.
Clause 12
General obligations
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
One of the main criticisms that the Government have received of the current legislative framework is that it sets out a number of prescriptive requirements that organisations must satisfy to demonstrate compliance. They include appointing independent data protection officers, keeping records of processing, appointing UK representatives, carrying out impact assessments and consulting the ICO about intended processing activities in specified circumstances.
Those rules can sometimes generate a significant and disproportionate administrative burden, particularly for small and medium-sized enterprises and for some third sector organisations. The current framework provides some limited exemptions for small businesses and organisations that are carrying out low-risk processing activities, but they are not always as clear or as useful as they should be.
We are therefore taking the opportunity to improve chapter 4 of the UK GDPR, and the equivalent provisions in part 3 of the Data Protection Act, in respect of law enforcement processing. Those provisions deal with the policies and procedures that organisations and law enforcement organisations must put in place to monitor and ensure compliance. Clauses 12 to 20 will give organisations greater flexibility to implement data protection management programmes that work for their organisations, while maintaining high standards of data protection for individuals.
Clause 12 is technical in nature. It will improve the terminology in the relevant articles of the UK GDPR by replacing the requirement to implement
“appropriate technical and organisational measures”.
In its place, data protection risks must be managed with
“appropriate measures, including technical and organisational measures,”.
That will give organisations greater flexibility to implement any measures that they consider appropriate to help them manage risks. A similar clarification is made to equivalent parts of the Data Protection Act.
Clause 13 will remove article 27 of the UK GDPR, ending the requirement for overseas controllers or processors to appoint a representative in the UK where they offer goods or services to, or monitor the behaviour of, UK citizens—
The Chair
Order. I am sorry, Minister, but we are talking about clause 12 at the moment; we will come on to clause 13 later. Have you concluded your remarks on clause 12?
Sir John Whittingdale
I think I have covered the points that I would like to make on clause 12.
Stephanie Peacock
Clause 12 is a set of largely technical amendments to terminology that I hope will provide clarity to data controllers and processors. I have no further comments to make at this stage.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Removal of requirement for representatives for controllers etc outside the UK
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
As I was saying, clause 13 will remove article 27 of the UK GDPR, ending the requirement for overseas controllers or processors to appoint a representative in the UK where they offer goods or services to, or monitor the behaviour of, UK citizens. By no longer mandating organisations to appoint a representative, we will be allowing organisations to decide for themselves the best way to comply with the requirements for effective communication. That may still include the appointment of a UK-based representative. The removal of this requirement is therefore in line with the Bill’s wider strategic aim of removing unnecessary prescriptive regulation.
Stephanie Peacock
The rules set out in the UK GDPR apply to all those who are active in the UK market, regardless of whether their organisation is based or located in the UK. Article 27 of the UK GDPR currently requires controllers and processors based outside the UK to designate a UK-based representative, unless they process only occasionally without special categories of data, providing an element of proportionality, or are a public authority or body. The idea is that the representative will act on behalf of the controller or processor regarding their UK GDPR compliance and will deal with the ICO and data subjects in that respect, acting as a primary contact for all things data within the country.
The removal of the requirement for a UK representative was not included in the Government’s consultation, “Data: a new direction”, nor was it even mentioned in their response. As a result, stakeholders have not been given an opportunity to put forward their opinions on this change. I wish to represent some of those opinions so that they are on the record for the Minister and his Department to consider.
Concern among the likes of Lexology, DataRep and Which? relates primarily to the fact that the current requirements for UK-based representatives ensure that UK data subjects can conveniently reach the companies that process their personal data, so that they can exercise their rights under the GDPR. Overseas data handlers may have a different first language, operate in a different time zone or have local methods of contact that are not easily accessible from the UK. Having a UK-based point of contact therefore ensures that data subjects do not struggle to apply the rights to which they are entitled because of the inevitable differences that occur across international borders.
As Lexology has pointed out, the Government’s own impact assessment says:
“There is limited information and data on the benefits of having an Article 27 representative as it is a relatively new and untested requirement and also one that applies exclusively to businesses and organisations outside of the UK which makes gathering evidence very challenging.”
By their own admission, then, the Government seem to recognise the challenges in gathering information from organisations outside the UK. If the Government find it difficult to get the information that they require, surely average citizens and data subjects may also face difficulties.
Not only is having a point of contact a direct benefit for data subjects, but a good UK representative indirectly helps data subjects by facilitating a culture of good data protection practice in the organisation that they represent. For example, they may be able to translate complex legal concepts into practical business terms or train fellow employees in a general understanding of the UK GDPR. Such functions may make it less likely that a data subject will need to exercise their rights in the first place.
As well as things being harder for data subjects in the ways I have outlined, stakeholders are not clear about the benefits of removing representatives for UK businesses. For example, the Government impact assessment estimates that the change could save a large organisation £50,000 per year, but stakeholders have said that that figure is an overestimation. Even if the figure is accurate, the saving will apply only to organisations outside the UK and will be made through a loss of employment for those who are actually based in the UK and performing the job.
The question therefore remains: if the clause is not in the interests of data subjects, of UK businesses or of UK-based employees who act as representatives, how will this country actually benefit from the change? I am keen to hear from the Minister on that point.
Sir John Whittingdale
If there are concerns that were not fed in during the consultation period, obviously we will consider them. However, it remains the case that even without the article 27 representative requirement, controllers will have to maintain contact with UK citizens and co-operate with the ICO under other provisions of the UK GDPR. For example, overseas controllers and processors must still co-operate with the ICO as a result of the specific requirements to do so under article 31 of the UK GDPR. To answer the hon. Lady’s question about where the benefit lies, the clause is part of a streamlining process to remove what we see as unnecessary administrative requirements and bureaucracy.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Senior responsible individual
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
As I mentioned in our debate on clause 12, clauses 12 to 18 will give organisations greater flexibility about the policies, procedures or programmes that they put in place to ensure compliance with the legislation. As we have discussed, a criticism of the current legal framework is that many of the existing requirements are so prescriptive that they impose unnecessary burdens on businesses. Many organisations could manage data protection risks effectively without appointing an independent data protection officer, but they are forced to do so by the prescriptive rules that we inherited from the European Union.
Clause 14 will therefore abolish existing requirements on data protection officers and replace them with new requirements for organisations to designate a senior responsible individual where appropriate. That individual would be part of the organisation’s senior management and would be responsible for overseeing data protection matters within the organisation. In particular, the individual would be responsible for monitoring compliance with the legislation, ensuring the implementation of appropriate risk management procedures, responding to data protection breaches and co-operating with the information commissioner, or for ensuring that those tasks are performed by another suitably skilled person where appropriate. Senior responsible individuals may perform the tasks specified in clause 14 themselves, delegate them to suitably skilled members of staff or, if it is right for the company and its clients, seek advice from independent data protection experts.
We recognise that some people have raised concerns that giving organisations more flexibility in how they monitor and ensure compliance with the legislation could reduce standards of protection for individuals. We are confident that that will not be the effect of the clause. On the contrary, the clause provides an opportunity to elevate discussions about data protection risks to senior levels within organisations by requiring a senior responsible individual to take ownership of data protection risks and embed a culture of data protection. On that basis, I commend the clause to the Committee.
Stephanie Peacock
In a number of places in the Bill, the Government have focused on trying to ensure a more proportionate approach to data protection. That often takes the form of reducing regulatory requirements on controllers and processors where low-risk processing, which presents less of a threat of harm to data subjects, is taking place. Clause 14 is one place in which Ministers have applied that principle, replacing data protection officers with a requirement to appoint a senior responsible individual, but only where high-risk processing is being carried out.
Such a proportionate approach makes sense in theory. Where the stakes are lower, less formalised oversight of GDPR compliance will be required, which will be particularly helpful in small business settings where margins and resources are tight. Where the stakes are higher, however, a senior responsible individual will have a similar duty to that of a data protection officer, but with the added benefit of being part of the senior leadership team, ensuring that data protection is considered at the highest level of organisations conducting high-risk processing.
However, the Government have admitted that the majority of respondents to their consultation disagreed with the proposal to remove the requirement to designate a data protection officer. In particular, respondents were concerned that removing DPOs would result in
“a loss of data protection expertise”
and
“a potential fall in trust and reassurance to data subjects.”
Indeed, data protection officers perform a vital role in upholding GDPR, taking on responsibility for informing people of their obligations; monitoring compliance, including raising awareness and training staff; providing advice, where requested, on data protection impact assessments; co-operating with the regulator; and acting as a contact point. That provides not only guaranteed expertise to organisations, but reassurance to data subjects that they will have someone to approach should they feel the need to exercise any of their rights under the GDPR.
The contradiction between the theory of the benefits of proportionality and the reality of the concerns expressed by respondents to the consultation emphasises a point that the Government have repeatedly forgotten throughout the Bill: although removing truly unnecessary burdens can sometimes be positive, organisations often want clear regulation more than they want less regulation. They believe in the principles of the GDPR, understand the value of rights to data subjects and often over-comply with regulation out of fear of breaking the rules.
In this context, it makes sense that organisations recognise the value of having a data protection officer. They actually want in-house expertise on data—someone they can ask questions and someone they can rely on to ensure their compliance. Indeed, according to the DPO Centre, in September 2022, the UK data protection index panel of 523 DPOs unequivocally disagreed with the idea that the changes made by the clause would be in the best interests of data subjects. Furthermore, when asked whether the proposal to remove the requirement for a DPO and replace it with a requirement for a senior responsible individual would simplify the management of privacy in their organisation, 42% of DPOs surveyed gave the lowest score of 1.
Did the Department consider offering clarification, support and guidance to DPOs, rather than just removing them? Has it attempted to assess the impact of their removal on data subjects? In practice, it is likely that many data protection officers will be rebranded as senior responsible individuals. However, many will be relieved of their duties, particularly since the requirement to be part of the organisation’s senior management team could be problematic for external DPO appointments and those in more junior positions. Has the Department assessed how many data protection officers may lose their job as a result of these changes? Is the number expected to be substantial? Will there be any protections to support those people in transitioning to skilled employment surrounding data protection and to prevent an overall reduction of data protection expertise in organisations?
Sir John Whittingdale
The clause does not in any way represent a lessening of the requirement on organisations to comply with data protection law. It simply introduces a degree of flexibility. An organisation could not get rid of data protection officers without ensuring that processing activities likely to pose high risks to individuals are still managed properly. The senior responsible individual will be required to ensure that that is the case.
At the moment, even small firms whose core activities do not involve the processing of sensitive data must have a data protection officer. We feel that that is an unnecessary burden on those small firms, and that allowing them to designate an individual will give them more flexibility without reducing the overall level of data protection that they require.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Duty to keep records
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
Clauses 15 and 16 will improve the record-keeping requirements under article 30 of the UK GDPR and the logging requirements under part 3 of the Data Protection Act, which is concerned with records kept for law enforcement purposes. Article 30 of the UK GDPR requires most organisations to keep records of their processing activities and includes a list of requirements that should be included in the record. Those requirements can add to the paperwork that organisations have to keep to demonstrate compliance. Although there is an exemption from those requirements in the UK GDPR for some small organisations, it has a limited impact because it applies only where their processing of personal data is “occasional”.
Clause 15 will replace the record-keeping requirements under article 30. It will make it easier for data controllers to understand exactly what needs to be included in the record. Most importantly, organisations of any size will no longer have to keep records of processing, unless their activities are
“likely to result in a high risk”
to individuals. That should help small businesses in particular, which have found the current small business exemption difficult to understand and apply in practice.
Clause 16 will make an important change to the logging requirements for law enforcement purposes in part 3 of the Data Protection Act. It will remove the ineffective requirement to record a justification when an officer consults or discloses personal data for the purposes of an investigation. The logging requirements are unique to the law enforcement regime and aim to assist in monitoring and auditing data use. Recording a justification for accessing data was intended to help protect against unlawful access, but the reality is that someone is unlikely to record an honest reason if their access is unlawful. That undermines the purpose of this requirement, because appropriate and inappropriate uses would both produce essentially indistinguishable data.
As officers often need to access large amounts of data quickly, especially in time-critical scenarios, the clause will facilitate the police’s ability to investigate and prevent crime more swiftly. We estimate that the change could save approximately 1.5 million policing hours. Other elements of the logs, such as the date and time of the consultation or disclosure and the identity of the person accessing them, are likely to be far more effective in protecting personal data against misuse; those elements remain in place. On that basis, I commend the clauses to the Committee.
Stephanie Peacock
Record keeping is a valuable part of data processing. It requires controllers, and to a lesser extent processors, to stay on top of all the processing that they are conducting by ensuring that they record the purposes for processing, the time limits within which they envisage holding data and the categories of recipients to whom the data has been or will be disclosed.
Many respondents to the Government’s consultation “Data: a new direction” said that they did not think the current requirements were burdensome. In fact, they said that the records allow them easily to understand the personal data that they are processing and how sensitive it is. It is likely that that was helped by the fact that the requirements were proportionate, meaning that organisations that employed under 250 people and were not conducting high-risk processing were exempt from the obligations.
It is therefore pleasing to see the Government rolling back on the idea of removing record-keeping requirements entirely, as was suggested in their consultation. As was noted, the majority of respondents disagreed with that proposal, and it is right that it has been changed. However, some respondents indicated a preference for more flexibility in the record-keeping regime, which is what I understand the clause is trying to achieve. Replacing the current requirements with a requirement to keep an appropriate record of processing, tied to high-risk activities, will give controllers the flexibility that they require.
As with many areas of the Bill, it is important that we be clear on the definition of “appropriate” so that it cannot be used by those who simply do not want to keep records. I therefore ask the Minister whether further guidance will be available to assist controllers in deciding what counts as appropriate.
I also wish to highlight the point that although in isolation the clause does not seem to change requirements much, other than by adding an element of proportionality, it cannot be viewed in isolation. In combination with other provisions, such as the reduced requirements on DPIAs and the higher threshold for subject access requests, it seems that there will be less records overall on which a data subject might be able to rely to understand how their personal information is being used or to prove how it has been used when they seek redress. With that in mind, I ask the Minister whether the Government have assessed the potential impact of the combination of the Bill’s clauses on the ability of data subjects to exercise their rights. Do the Government have any plans to work with the commissioner to monitor any such impacts on data subjects after the Bill is passed?
I turn to clause 16. Section 62 of the Data Protection Act 2018 requires competent authorities to keep logs that show who has accessed certain datasets, and at what time. It also requires that that access be justified: the reason for consulting the data must be given. Justification logs exist to assist in disciplinary proceedings, for example if there is reason to believe that a dataset has been improperly accessed or that personal data has been disclosed in an unauthorised way. However, as Aimee Reed, director of data at the Met police and chair of the national police data board, told the Committee:
“It is a big requirement across all 43 forces, largely because…we are operating on various aged systems. Many of the technology systems…do not have the capacity to log section 62 requirements, so police officers are having to record extra justification in spreadsheets alongside the searches”.––[Official Report, Data Protection and Digital Information (No. 2) Public Bill Committee, 10 May 2023; c. 56, Q118.]
That creates what she described as a “considerable burden”.
Understandably, therefore, the Bill removes the justification requirement. There are some—the Public Law Project, for example—who have expressed concern that this change would pose a threat to individual rights by allowing the police to provide a retrospective justification for accessing records. However, as the explanatory notes indicate, it is highly unlikely that in an investigation concerning inappropriate use, a justification recorded by the individual under investigation for improper access or unauthorised access could be relied on anyway. Clause 16 would therefore not stop anyone from being investigated for improper access; it would simply reduce the burden of recording a self-identified justification that could hardly be relied on anyway. I welcome the intent of the clause and the positive impact that it could have on our law enforcement processing.
Sir John Whittingdale
The intention behind clause 15 is to reduce the burden on organisations by tying the record-keeping requirements to high-risk processing activities. If there is uncertainty about the nature of the risk, organisations will be able to refer to ICO guidance. The ICO has already published examples on its website of processing that is likely to be high-risk for the purposes of completing impact assessments; clause 17 will require it to apply the guidance to the new record-keeping requirements as well. It will continue to provide guidance on the matter, and we are happy to work with it on that.
With respect to clause 16, I am most grateful for the Opposition’s welcome recognition of the benefits for crime prevention and law enforcement.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16 ordered to stand part of the Bill.
Clause 17
Assessment of high risk processing
Stephanie Peacock
I beg to move amendment 102, in clause 17, page 32, line 12, leave out from “with” to the end of line 28 on page 33 and insert
“subsection (2)
(2) In Article 57(1) (Information Commissioner’s tasks), for paragraph (k) substitute—
‘(k) produce and publish a document containing examples of types of processing which the Commissioner considers are likely to result in a high risk to the rights and freedoms of individuals (for the purposes of Articles 27A, 30A and 35);’.”
This amendment would remove the provisions of clause 17 which replace the existing data protection impact assessment requirements with new requirements about “high risk processing”, leaving only the requirement for the ICO to produce a document containing examples of types of processing likely to result in a high risk to the rights and freedoms of individuals.
The Chair
With this it will be convenient to discuss the following:
Amendment 103, in clause 17, page 33, line 9, at end insert—
“(4A) After Article 35(11) insert—
‘(11A) Any public authority, government department, or contractor of a government department which routinely uses public data in the discharge of its functions must publish any assessments of high risk processing conducted pursuant to this Article. Any assessments published under this Article must be redacted where necessary for the purposes of—
(a) removing sensitive details,
(b) protecting public interests, or
(c) ensuring the security of data processing operations.’”
This amendment inserts a new requirement into Article 35 of UKGDPR, for any public authority which uses public data to publish any assessment of high risk processing they conduct under Article 35.
Clause stand part.
Clause 18 stand part.
Stephanie Peacock
As was the intention, the Bill loosens restrictions on processing personal data in many areas: it adds a new lawful basis and creates new exceptions to purpose limitation, removes blocks to automated decision-making and allows for much thinner record keeping. Each change in isolation may make only a relatively small adjustment to the regime. Collectively, however, they result in a large-scale shift towards controllers being able to conduct more processing, with less transparency and communication, and having fewer records to keep, all of which reduces opportunities for accountability.
As mentioned, loosening restrictions is an entirely deliberate consequence of a Bill that seeks to unlock innovation through data—an aim that Members across the House, including me, are strongly behind, given the power of data to influence growth for the public good. However, given the cumulative impact of this deregulation, where increasingly opaque processing is likely to result in a large risk to people’s rights, a processor might at the very least record how they will ensure that any high-risk activities that they undertake do not lead to unlawful or discriminatory outcomes for the general public. That is exactly what the current system of DPIAs, as outlined in article 35 of GDPR, allows for. These assessments, which require processors to measure their activities against the risk to the rights and freedoms of data subjects, are not just a tick-box exercise, unnecessary paperwork or an administrative burden; they are an essential tool for ensuring that organisations do not deploy, and individuals are not subjected to, systems that may lead to a fundamental breach of their rights.
Assessments of that kind are not a concept unique to data processing. The Government routinely publish impact assessments on the legislation that they want to introduce; any researcher or scientist is likely to conduct an assessment of the safety and morality of their methodology; and a teacher will routinely and formally measure the risks involved when taking pupils on a school trip. Where activities pose a high risk to others, it is simply common practice to keep a record of where the risks lie, and to make plans to ensure that they are mitigated where possible.
In the case of data, not only are DPIAs an important mechanism to ensure that risks are managed, but they act as a key tool for data subjects. That is first because the process of conducting a DPIA encourages processors to consult data subjects, either directly or through a representative, on how the type of processing might impact them. Secondly, where things go wrong for data subjects, DPIAs act as a legal record of the processing, its purpose and the risks involved. Indeed, the Public Law Project, a registered charity that employs a specialist lawyer to conduct research, provide training and take on legal casework, identified DPIAs as a key tool in litigating against the unlawful use of data processing. They show a public law record of the type of processing that has been conducted, and its impact.
The TUC and the Institute for the Future of Work echo that, citing DPIAs as a crucial process and consultation tool for workers and trade unions in relation to the use of technology at work. The clause, however, seeks to water down DPIAs, which will become “assessments of high-risk processing”. That guts both the fundamental benefit of risk management that they offer in a data protection system that is about to become increasingly transparent, and the extra benefits that they give to data subjects.
Instead of requiring a systematic description of the processing operations and purposes, under the new assessments the controller would be required only to summarise the purpose of the processing. Furthermore, instead of conducting a proportionality assessment, controllers will be required only to consider whether the processing is necessary for the stated purpose. The Public Law Project describes the proportionality assessment as a crucial legal test that weighs up whether an infringement of human rights, including the right not to be discriminated against, is justified in relation to the processing being conducted.
When it comes to consultation, where previously it was encouraged for controllers to seek the views of those likely to be impacted by the processing, that requirement to seek those views will now be entirely omitted, despite the important benefit to data subjects, workers and communities. The new tests therefore simply do not carry the same weight or benefit as DPIAs, which in truth could themselves be strengthened. It is simply not appropriate to remove the need to properly assess the risk of processing, while simultaneously removing restrictions that help to mitigate those risks. For that reason, the clause must be opposed; we would keep only the requirement for the ICO to produce that much-needed guidance on what constitutes high-risk processing.
Moving on to amendment 103, given the inherent importance of conducting risk assessments for high-risk processing, and their potential for use by data subjects when things go wrong, it seems only right that transparency be built into the system where it comes to Government use of public data. The amendment would do just that, and only that. It would not adjust any of the requirements on Government Departments or public authorities to complete high-risk assessments; it would simply require an assessment to be published in any case where one is completed. Indeed, the ICO guidance on DPIAs says:
“Although publishing a DPIA is not a requirement of UK GDPR, you should actively consider the benefits of publication. As well as demonstrating compliance, publication can help engender trust and confidence. We would therefore recommend that you publish your DPIAs, where possible, removing sensitive details if necessary.”
However, very few organisations choose to publish their assessments. This is a chance for the Government to lead by example, and foster an environment of trust and confidence in data protection
Alongside the amendment I tabled on compulsory reporting on the use of algorithms, this amendment is designed to afford the general public honesty and openness on how their data is used, especially where the process has been identified as having a high risk of causing harm. Again, a published impact assessment would provide citizens with an official record of high-risk uses of their data, should they need that when seeking redress. However, a published impact assessment would also encourage responsible use of data, so that redress does not need to be sought in the first place.
The Government need not worry about the consequences of the amendment if they already meet the requirement to conduct the correct impact assessments and process them in such a way that the benefits are not heavily outweighed by a risk to data rights. If rules are being followed, the amendment will only provide proof of that. However, if anyone using public data in a public authority’s name did so without completing the appropriate assessments, or processed that data in a reckless or malicious way, there would be proof of that. Where there is transparency, there is accountability, and where the Government are involved, accountability is always crucial in a democracy. The amendment would ensure that accountability shined through in data protection law.
Finally, I turn to clause 18. The majority of respondents to the “Data: a new direction” consultation agreed that organisations are likely to approach the ICO voluntarily before commencing high-risk processing activities if that is taken into account as a mitigating factor in any future investigation or enforcement action. The loosening of requirements in the clause is therefore not a major concern. However, when that is combined with the watering down of the impact assessments, there remains an overarching concern about the oversight of high-risk processing. I refer to my remarks on clause 17, in which I set out the broader problems that the Bill poses to protection against harms from high-risk processing.
Sir John Whittingdale
As we have discussed, one of the principal objectives of this part of the Bill is to remove some of the prescriptive unnecessary requirements on organisations to do things to demonstrate compliance. Clauses 17 and 18 reduce the unnecessary burdens placed on organisations by articles 35 and 36 of the UK GDPR in respect of data protection impact assessments and prior consultation with the ICO respectively.
Clause 17 will replace the EU-derived notion of a data protection impact assessment with more streamline requirements for organisations to document how they intend to assess and mitigate risks associated with high-risk processing operations. The changes will apply to both the impact assessment provisions under the UK GDPR and the section of the Data Protection Act 2018 that deals with impact assessments for processing relating to law enforcement. Amendment 102 would reverse those changes to maintain the current data protection impact assessment requirements, but we feel that this would miss an important opportunity for reform.
There are significant differences between the new provisions in the Bill and current provisions on data protection impact assessments. First, the new provisions are less prescriptive about the precise processing activities for which a risk assessment will be required. We think organisations are best placed to judge whether a particular activity poses a high risk to individuals in the context of the situation, taking account of any relevant guidance from the regulator.
Secondly, we have also removed the mandatory requirement to consult individuals about the intended processing activity as part of a risk-assessment process, as that imposes unnecessary burdens. There are already requirements in the legislation to ensure that any new processing is fair, transparent and designed with the data protection principles in mind. It should be open to businesses to consult their clients about intended new processing operations if they wish, but that should not be dictated to them by the data protection legislation.
Clause 18 will make optional the previous requirement for data controllers to consult the commissioner when a risk assessment indicates a potential high risk to individuals. The Information Commissioner will be able to consider any voluntary actions that organisations have taken to consult the ICO as a factor when imposing administrative fines on a data controller. Currently, compliance with the prior consultation requirement is low, likely due to a lack of clarity in the legislation and a reluctance for organisations to engage directly with the regulator on potential high-risk processing. The clause will encourage a more proactive, open and collaborative dialogue between the ICO and organisations, so that they can work together to better mitigate the risks.
The Opposition’s amendment 103 would mandate the publication of risk assessments by all public sector bodies. That requirement would, in our view, place a disproportionate burden on public authorities of all sizes. It would apply not just to Departments but to smaller public authorities such as schools, hospitals, independent pharmacies and so on. The amendment acknowledges that each public authority would have to spend time redacting sensitive details from risk assessments prior to publication. As those assessments can already be requested by the ICO as part of its investigations, or by members of the public via freedom of information requests, we do not think it is necessary to impose that significant new burden on all public bodies. I therefore invite the hon. Member for Barnsley East to withdraw her two amendments, and I commend clauses 17 and 18 to the Committee.
Stephanie Peacock
I am happy not to press amendment 103 to a vote, but on amendment 102, I simply do not think it is appropriate to remove the need to properly assess the risk of processing while removing the restrictions that help to mitigate it. For those reasons, I will press it to a vote.
Question put, That the amendment be made.
Sir John Whittingdale
I beg to move amendment 1, in clause 19, page 35, leave out lines 23 to 25 and insert—
“(5) The Commissioner must encourage expert public bodies to submit codes of conduct described in subsection (1) to the Commissioner in draft.”.
This amendment replaces a duty on expert public bodies to submit draft codes of conduct relating to compliance with Part 3 of the Data Protection Act 2018 to the Information Commissioner with a duty on the Information Commissioner to encourage such bodies to do so.
The Chair
With this it will be convenient to discuss the following:
Government amendments 2 to 4.
Clause stand part.
Sir John Whittingdale
Clause 19 introduces an ability for public bodies with the appropriate knowledge and expertise to produce codes of conduct applicable to the law enforcement regime. The clause mirrors the equivalent provision in the UK GDPR.
As with regular guidance, these codes of conduct will be drafted by law enforcement data protection experts and tailored to the specific data protection issues that affect law enforcement agencies, to help improve compliance with the legislation and encourage best practice. However, they are intended to carry more weight, because they will additionally have the formal approval of the Information Commissioner.
When a code of conduct is produced, there is a requirement to submit a draft of it to the Information Commissioner. While that is good practice, we think it is unnecessary to mandate that. Government amendment 1 replaces that requirement with a duty on the commissioner to instead encourage public bodies to do that. Government amendments 2 and 3 are consequential to that.
Where a public body has submitted a code of conduct to the commissioner for review, Government amendment 4 removes the requirement for the commissioner to review any subsequent amendments made by the public body until the initial draft has been considered. This change will promote transparency, greater clarity and confidence in how police process personal data under the law enforcement regime. Codes of conduct are not a new concept. The clause mirrors what is already available under the UK GDPR.
Stephanie Peacock
The Bill fails to fully recognise that the burdens that organisations face in complying with data protection legislation are not always best dealt with by simply removing the protections in place. In many cases, clarification and proper guidance can be just as fruitful in allowing data protection to work more seamlessly. Clauses such as clause 19, which seeks to create an environment in which best practice is shared on how to comply with data protection laws and deal with key data protection challenges, are therefore very welcome. It is absolutely right that we should capitalise on pockets of experience and expertise, especially in the public sector, where resources have often been stretched, particularly over the last 13 years. We should ensure that learnings are shared with those who are less familiar with how to resolve challenges around data.
It is also pleasing to see that codes that give sector-specific guidance will be approved by the commissioner before being published. That will ensure absolute coherence between guidance and the enforcement of data protection law more widely. I look forward to seeing what positive impact the codes of conduct will have on how personal data is handled by public bodies, to the benefit of the general public as well as the public bodies themselves; the burden on them will likely be lifted as a result of the clarity provided by the guidance.
Sir John Whittingdale
I welcome the Opposition’s support.
Amendment 1 agreed to.
Amendments made: 2, in clause 19, page 35, line 26, leave out from ‘body’ to ‘, the’ in line 27 and insert ‘does so’.
This amendment is consequential on Amendment 1.
Amendment 3, in clause 19, page 35, line 28, leave out ‘draft’.
This amendment is consequential on Amendment 2.
Amendment 4, in clause 19, page 35, line 33, leave out from ‘conduct’ to the end of line 34 and insert—
‘that is for the time being approved under this section as they apply in relation to a code’.—(Sir John Whittingdale.)
This amendment makes clear that the Commissioner’s duty under new section 68A of the Data Protection Act 2018 to consider whether to approve amendments of codes of conduct relates only to amendments of codes that are for the time being approved under that section.
Clause 19, as amended, ordered to stand part of the Bill.
Clause 20
Obligations of controllers and processors: consequential amendments
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider the following:
Government amendments 42 and 43.
That schedule 4 be the Fourth schedule to the Bill.
Government amendments 40 and 41.
Sir John Whittingdale
As clauses 12 to 18 remove terms such as data protection officers and data protection impact assessments from the legislation, some consequential changes are required to other parts of the legislation where the same terms are used. Clause 20 therefore introduces schedule 4, which sets out the details of the consequential changes required. An example of that is in article 13 of the UK GDPR, which currently requires controllers to provide individuals with the contact details of the data protection officer, where appropriate. In future, that provision will refer to the organisation’s senior responsible individual instead. Removal of the term data protection officer from the UK GDPR will have knock-on effects in other areas, including in relation to the types of people from whom the ICO receives requests and queries.
Government amendment 40 will provide that the commissioner may refuse to deal with vexatious or excessive requests made by any person, not just those made by data protection officers or data subjects. Government amendments 41 to 43 make further minor and technical changes to the provisions in schedule 4 to reflect the changes we have made to the terminology.
Stephanie Peacock
I have no comments to add on the consequential amendments in clause 20 beyond what has been discussed regarding the obligations on controllers and processors. With regard to Government amendments 40 to 44 and schedule 4, I will address changes to the ICO’s powers to refuse requests when we come to them further on in the Bill.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Schedule 4
Obligations of controllers and processors: consequential amendments
Amendments made: 42, in schedule 4, page 143, line 20, leave out ‘and section 135’.—(Sir John Whittingdale.)
This amendment is consequential on Amendment 40.
Amendment 43, in schedule 4, page 143, line 24, leave out paragraph 18.
This amendment is consequential on Amendment 40.
Schedule 4, as amended, agreed to.
Clause 21
Transfers of personal data to third countries and international organisations
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 104, in schedule 5, page 144, line 28, at end insert—
‘4 All provisions in this Chapter must be applied in such a way as to ensure that the level of protection of natural persons guaranteed by this Regulation is not undermined.’
This amendment would reinsert into the new Article on general principles for international data transfers the principle that all provisions of this Chapter of the UK GDPR should be applied in such a way as to ensure that the level of protection of natural persons guaranteed by the Regulation is not undermined.
Government amendments 24 to 26.
That schedule 5 be the Fifth schedule to the Bill.
Government amendments 27 to 29.
That schedule 6 be the Sixth schedule to the Bill.
That schedule 7 be the Seventh schedule to the Bill.
Sir John Whittingdale
Clause 21 refers to schedules 5 to 7, which introduce reforms to the provisions of the UK GDPR and the Data Protection Act 2018, which regulate the international transfers of personal data. Schedule 5 introduces changes to the UK’s general processing regime for transferring personal data internationally. In order to provide for a clearer structure than the current UK regime, schedule 5 will consolidate the existing provisions on international transfers. It replaces article 44 with article 44A, setting out in clearer terms the general principles for international transfers and listing the same bases under which personal data can be lawfully transferred overseas.
Schedule 5 also introduces article 45A, which sets out the Secretary of State’s power to make regulations approving transfers of personal data to a third country or international organisation. The Government now use the term “data bridges” to refer to those regulations, which allow the free flow of personal data. Article 45A outlines that the Secretary of State may make such regulations only if they are satisfied that the data protection test is met. In addition to the requirement that the Secretary of State be satisfied that the data protection test is met, article 45A specifies that the Secretary of State may have regard to other matters that he or she considers relevant when making those regulations, including the desirability of facilitating transfers of personal data to and from the UK.
Article 45B sets out the data protection test that the Secretary of State must consider is met in order to establish new data bridges. In order for a country or international organisation to meet the data protection test, the standard of protection for personal data in that country or international organisation must be “not materially lower” than the standard of protection under the UK’s data protection framework. The reformed law recognises that the Secretary of State must exercise their judgment when making a determination. Their assessment will be made with respect to the outcomes of data protection in a third country, instead of being prescriptive about the form and means of protection, recognising that no two data protection regimes are identical.
The article also sets out a more concise and streamlined list of key factors that the Secretary of State must consider as part of their assessment. However, article 45B(2) is a non-exhaustive list, and the Secretary of State may also need to consider other matters in order to determine whether the required standard of protection exists.
Article 45C amends the system for formally reviewing data bridge regulations, removing the requirement for them to be reviewed periodically. The Secretary of State will still be subject to the requirement to monitor developments in other countries on an ongoing basis. Schedule 5 also amends article 46, which sets out the rules for controllers and processors to make international transfers of personal data using alternative transfer mechanisms.
The new article 46 requirements are tailored for data exporters to transfer defined types of data in specific circumstances. They stipulate that the data exporter, acting reasonably and proportionately, must consider that the standard of protection provided for the data subject would be “not materially lower” than the standard of protection in the UK in the specific circumstances of the transfer. The new requirements accommodate disparities between data exporters, where what is right for a multinational organisation transferring lots of sensitive data may not be right for a small charity making ad hoc transfers.
Schedule 5 also introduces article 47A, which provides a power for the Secretary of State to create or recognise new UK and non-UK alternative transfer mechanisms. The new power will help to future-proof the UK’s international transfers regime by allowing the Government to shape international developments and react quickly to global trends, helping UK businesses connect and trade with their partners around the world.
Schedule 6 amends relevant parts of the Data Protection Act 2018 governing international transfers of personal data, which are governed by the law enforcement processing regime. Paragraph 4 omits the section governing transfers based on adequacy assessments and inserts a new provision to mirror the approach being adopted in schedule 5. As with the changes described in schedule 5, schedule 6 amends the power in new section 74AA for the Secretary of State to make regulations approving transfers of personal data to another jurisdiction. It replaces the current list of considerations with a broader, non-exhaustive one. The schedule also clarifies the test found in new section 74AB that must be applied when regulations are made, giving greater clarity to the UK regulations decision-making process.
The Chair
The Minister is being very courteous and generous, and he makes a very sensible suggestion. Will he respond to amendment 104 after the Opposition have spoken to it?
Sir John Whittingdale
It would make sense to explain the reasons why we are not convinced after we have heard the arguments in favour.
Stephanie Peacock
I am grateful to the Minister, and I will focus my remarks particularly on the contents of schedule 5 before explaining the thought process behind amendment 104.
In the globalised world in which we live, we have an obligation to be outward looking and to consider not just the activities that take place in the UK, but those that occur worldwide. When it comes to data protection, that means accepting that data will likely need to travel across borders, and inserting appropriate safeguards so that UK citizens do not lose the protection of data protection laws if their personal data is transferred away from this country. The standard of those safeguards is absolutely crucial to the integrity of our entire data protection regime. After all, if a controller can simply send the personal data of UK citizens to a country that has limited data protection laws for processing that would be unlawful here, and if they can transfer that data back afterwards, in reality our laws are only as strong as the country with the weakest protections in the world.
As things stand, there is only a limited set of circumstances under which personal data can be transferred to a third party outside the UK. One such circumstance is where there is an adequacy agreement, similar to that which we have with the EU. For such an agreement to be reached, the Secretary of State must have considered many things, including the receiver’s respect for human rights and data rules; the presence, or lack thereof, of a regulator, and its independence; and any international commitments they have made in relation to data protection. These amendments ensure that data can flow freely between the UK and another country as long as the level of protection received by citizens is not undermined by the regulatory structure in that country.
The Bill amends the adequacy-based framework and replaces it with a new outcomes-based approach through the data protection test. The test is met if the standard of the protection provided for data subjects, with regard to the general processing of personal data in the country or by the organisation, is not materially lower than the standard of protection under the UK GDPR and relevant parts of the DPA 2018.
When deciding whether the test is met, the Secretary of State must still consider many of the same things: their respect for human rights, the existence of a regulator, and international obligations. However, stakeholders such as Reset.tech and the TUC have expressed concern that the new test could mean that UK data is transferred to countries with lower standards of protection than previously. That is significant not just for data subjects in the UK, who may be faced with weaker rights, but for business, which fears that this may signify a divergence from the EU GDPR that could threaten the UK’s own adequacy status. Losing this agreement would have real-world consequences for UK consumers and businesses to the tune of hundreds of millions of pounds. What conversations has the Minister had with representatives of the European Commission to ensure that the new data protection test does not threaten adequacy? Does he expect the new data protection test to result in the data of UK citizens being passed to countries with weaker standards than are allowed under the current regime?
Moving on to amendment 104, one reason why some stakeholders are expressing concern about the new rules is because they appear to omit article 44. As it stands, for those who are concerned about the level of data protection available to them as a result of international transfers, article 44 of the UK GDPR provides a guarantee that the integrity of the UK’s data protection laws will be protected. Indeed, it sets out that all provisions relating to the international transfer of UK personal data
“shall be applied in order to ensure that the level of protection of natural persons guaranteed by this Regulation is not undermined.”
If UK data will not be transferred to countries with weaker protections, it is not clear why this simple guarantee would be removed. The amendment would clear up any confusion around that and reinsert the article so that data subjects can be reassured of the strength of this new data protection test and of their rights.
Again, it is important to emphasise that getting the clause right is absolutely essential, as it underpins the entire data protection regime in the country. Getting it wrong could cost a huge amount, rendering the Bill, the UK GDPR and the Data Protection Act 2018 essentially useless. It is likely that the Government do not intend to undermine their own regulatory framework. Reinserting the article would confirm that in the Bill, offering complete clarity that the new data protection test will not result in lower levels of protection for UK data subjects.
Sir John Whittingdale
We completely agree with the hon. Lady that we would not wish to see data transferred to countries that have an inferior data protection regime. However, we do not think amendment 104 is required to achieve that, because the reforms in chapter 5 already provide for a clear and high standard of protection when transferring personal data overseas. It states that the standard of protection in that country must not be “materially lower” than the standard under the UK GDPR. That ensures that high standards of data protection are maintained. In addition, we feel that the amendment would return us to the confusion of the existing regime. At present, the legislative framework makes it difficult for organisations and others to understand what standard needs to be applied when transferring personal data internationally, with several terms used in the chapter and in case law. Our reforms ensure that a clear standard applies, which maintains protection for personal data.
The hon. Lady raised the EU’s data adequacy assessment. That is something that featured earlier in our debates on the Bill, and, as we heard from a number of our witnesses, including the information commissioner, there is no reason to believe that this in any way jeopardises the EU’s assessment of the UK’s data adequacy.
Government amendment 24 revises new article 45B(3)(c) of the UK GDPR, which is inserted by schedule 5 and which makes provision about the data protection test that must be satisfied for data bridge regulations to be made. An amendment to the Bill is required for the Secretary of State to retain the flexibility to make data bridge regulations covering transfers from the UK or elsewhere. The amendment will preserve the status quo under the current regime, in which the Secretary of State’s power is not limited to covering only transfers from the UK. In addition to these amendments, four other minor and technical Government amendments —25, 26, 28 and 29—were tabled on 10 May.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Schedule 5
Transfers of personal data to third countries etc: general processing
Amendments made: 24, in schedule 5, page 147, line 3, leave out “from the United Kingdom” and insert
“to the country or organisation by means of processing to which this Regulation applies as described in Article 3”.
New Article 45B(3)(c) of the UK GDPR explains how references to processing of personal data in a third country should be read (in the data protection test for regulations approving international transfers of personal data). This amendment changes a reference to data transferred from the United Kingdom to include certain data transferred from outside the United Kingdom.
Amendment 25, in schedule 5, page 147, line 12, leave out
“the transfer of personal data”
and insert “transfer”.
This amendment and Amendment 26 simplify the wording in new Article 45B(4)(b) of the UK GDPR.
Amendment 26, in schedule 5, page 147, line 14, leave out
“the transfer of personal data”
and insert “transfer”.—(Sir John Whittingdale.)
See the explanatory statement for Amendment 25.
Schedule 5, as amended, agreed to.
Schedule 6
Transfers of personal data to third countries etc: law enforcement processing
Amendments made: 27, in schedule 6, page 155, line 39, leave out “from the United Kingdom” and insert—
“to the country or organisation by means of processing to which this Act applies as described in section 207(2)”.
New section 74AB(3)(c) of the Data Protection Act 2018 explains how references to processing of personal data in a third country should be read (in the data protection test for regulations approving international transfers of personal data). This amendment changes a reference to data transferred from the United Kingdom to include certain data transferred from outside the United Kingdom.
Amendment 28, in schedule 6, page 156, line 6, leave out
“the transfer of personal data”
and insert “transfer”.
This amendment and Amendment 29 simplify the wording in new section 74AB(4)(b) of the Data Protection Act 2018.
Amendment 29, in schedule 6, page 156, line 8, leave out
“the transfer of personal data”
and insert “transfer”.—(Sir John Whittingdale.)
See the explanatory statement for Amendment 28.
Schedule 6, as amended, agreed to.
Schedule 7 agreed to.
Clause 22
Safeguards for processing for research etc purposes
Sir John Whittingdale
I beg to move amendment 34, in clause 22, page 36, leave out lines 20 to 22.
This amendment and Amendment 37 transpose the requirement for processing of personal data for research, archiving and statistical purposes to be carried out subject to appropriate safeguards from the beginning to the end of new Article 84B of the UK GDPR.
The Chair
With this it will be convenient to discuss the following:
Government amendments 35 to 39.
Clause stand part.
Clause 23 stand part.
Sir John Whittingdale
Clause 22 creates a new chapter in the UK GDPR that provides safeguards for the processing of personal data for the purposes of scientific research or historical research, archiving in the public interest, and for statistical purposes. Currently, the provisions that provide safeguards for those purposes are spread across the UK GDPR and the Data Protection Act 2018.
Clause 22 consolidates those safeguards in a new chapter 8A of the UK GDPR. Those safeguards ensure that the processing of personal data for research, archiving and statistical purposes does not cause substantial damage or substantial distress and that appropriate technical and organisational measures are in place to respect data minimisation. Clause 23 sets out consequential changes to the UK GDPR and Data Protection Act 2018 required as a result of the changes being made in clause 22 to consolidate safeguards for research.
Government amendments 34 to 39 are minor, technical amendments clarifying that, as part of the pre-existing additional requirement when processing for research, archiving and statistical purposes, a controller is to use anonymous—rather that personal—data, unless that means that those purposes cannot be fulfilled. It makes clear that processing to anonymise the personal data is permitted. On that basis, I commend the clauses, and indeed the Government amendments, to the Committee.
Stephanie Peacock
With regards to clause 22, it is pleasing to see a clause confirming the safeguards that are applicable when processing under the new research and scientific purposes. For example, it is welcome that it is set out that such processing must not cause substantial damage or distress to a data subject, must respect the principle of data minimisation and must not make decisions related to a particular data subject unless it is for approved medical research.
Those safeguards are especially important given the concerns that I laid out over the definition of scientific research in clause 2, which could lead to the abuse of data under the guise of legitimate research. I have no further comments on the clause or the Government’s amendments to it at this stage, other than to reiterate that the definition of scientific research must have clear boundaries if any of the clauses that concern research are to be used as intended.
Clause 23 makes changes consequential on those in clause 22, so I refer to the substance of my remarks during the discussion of the previous clause.
Amendment 34 agreed to.
The Chair
With this it will be convenient to discuss the following:
Amendment 105, in clause 25, page 44, line 6, leave out “must consult the Commissioner” and insert
“must apply to the Commissioner for authorisation of the designation notice on the grounds that it satisfies subsection (1)(b).”
This amendment seeks to increase independent oversight of designation notices by replacing the requirement to consult the Commissioner with a requirement to seek the approval of the Commissioner.
Clauses 25 and 26 stand part.
Sir John Whittingdale
Clause 24 introduces an exemption that can be applied to the processing of personal data for law enforcement purposes under the law enforcement regime for the purposes of safeguarding national security. It will replace the current, more limited national security exemptions that exist in the law enforcement regime and mirror the existing exemptions in the UK GDPR and intelligence services regime.
The clause will allow organisations to exempt themselves from specified provisions in the law enforcement regime of the Data Protection Act 2018, such as some of the data protection principles and the rights of the individual, but only where it is necessary to do so for the purposes of safeguarding national security. Like the other exemptions in the Act, it must be applied on a case-by-case basis. There are limits to what the exemption applies to. The processing of data by law enforcement authorities must always be lawful, and the protections surrounding sensitive processing remain.
Subsection (2) amends the general processing regime of the Data Protection Act, regarding processing under UK GDPR, to remove the ability of organisations to exempt themselves, on the grounds of safeguarding national security, from article 77 of the UK GDPR, which provides the right for individuals to lodge a complaint with the Information Commissioner. That is because we do not consider exemption from that provision necessary. The change will align the national security exemption applicable to UK GDPR processing with the other national security exemptions in the Data Protection Act 2018, which do not permit the exemption to be applied in relation to an individual’s right to complain to the Commissioner.
The ability of a Minister of the Crown to issue a certificate certifying the application of the exemption for the purposes of safeguarding national security, which previously existed, is retained; clause 24(8) simply updates that provision to reflect the new exemption. That change will assist closer working between organisations operating under the three distinct data protection regimes by providing greater confidence that data that, for example, may be of importance to a police investigation but also pertinent to a separate national security operation can be properly safeguarded by both organisations. I will allow the hon. Member for Barnsley East to speak to amendment 105, because I wish to respond to her.
Stephanie Peacock
I am grateful to the Minister. I want to speak today about a concern that has been raised about clauses 24, 25 and 26, so I will address them before speaking to amendment 105.
In essence, the clauses increase the opportunities for competent authorities to operate in darkness when it comes to personal data through both national security certificates and designation notices. Though it may of course be important in some cases to adjust data protection regulation in a minimal way to protect national security or facilitate working with the intelligence services, important too is the right to understand how any competent authority is processing our personal data—particularly given the growing mistrust around police culture.
To cite one stark example of why data transparency in law enforcement is important, after Sarah Everard was murdered, more than 30 police officers were reportedly investigated for unnecessarily looking up her personal data. First, that demonstrates that there is a temptation for officers to access personal data without due reason, perhaps particularly when it is related to a high-profile case. Secondly, however, it shows that transparency does hold people accountable. Indeed, thankfully, the individuals who were accused of accessing the data were swiftly investigated. That would not have been possible if that transparency had been restricted—for example, had there been a national security certificate or a designation notice in place.
The powers to apply for the certificates and notices that allow the police and law enforcement authorities exemptions from data protection, although sometimes needed, must be used extremely sparingly and must be proportionate to the need to protect national security. However, that proportionate approach does not appear to be guaranteed in the Bill, despite it being a requirement in human rights law.
In their oral and written evidence, representatives from Rights and Security International warned that clauses 24 to 26 could actually violate the UK’s obligations under the Human Rights Act 1998 and the European convention on human rights. Everything that the UK does, including in the name of national security or intelligence services, must comply with human rights and the ECHR. That means that any time there is interference with the privacy of people in the UK—which is considered a fundamental right—for it to be lawful, the law in question must do only what is truly necessary for national security. That necessity standard is a high one, and it does not take into account whether a change might be more convenient for a competent authority.
Will the Minister clearly explain in what way the potential powers given to law enforcement under clauses 24 to 26, in both national security certificates and designation notices, would be strictly proportionate and necessary for national security, rather than simply making the operations of law enforcement easier and more convenient?
Primarily, the concern is for those whose data could be used in a way that fundamentally infringes on their privacy, but there are practical concerns too. Any clauses that contain suspected violations of human rights could set up the Government for lengthy legal battles, both in the UK and at the European Court of Human Rights, about their data protection and surveillance regimes. Furthermore, any harm to the UK’s important relationships with the EU around data could threaten the adequacy agreement which, as we have all repeatedly heard, is vital to our economy.
It is vital, then, that Minister confirms that both national security certificates and designation notices will be used only where necessary, and exemptions will be allowed only where necessary. If that cannot be satisfied, we must oppose the clauses.
I will now focus on amendment 105. Where powers are available to provide exemptions to privacy protections on grounds of national security, it is important that they are protected from exploitation, and not unduly concentrated in any individual’s hands without appropriate checks and balances. However, Rights and Security International warned that that was not taken into appropriate consideration in clause 25. Instead, the power to issue designation notices has been concentrated almost entirely in the hands of the Secretary of State, with no accountability measures built in.
Designation notices allow for joint processing between a qualifying competent authority and the intelligence services, which could have greatly beneficial consequences for tackling crime and threats to our national security, but they will also allow for both those parties to be exempt from what are usually crucial data protections. They must therefore be used sparingly, and only when necessary and proportionate.
As we have seen—and as I will argue countless times—we cannot rely on the Secretary of State’s acting in good faith. Our legislation must instead protect against a Secretary of State who acts in bad faith. Neither can we rely on the Secretary of State having the level of expertise needed to make complex and technical decisions, especially those that impact on national security and data rights at the same time.
Despite that, under clause 25(2), the Secretary of State alone can specify which competent authorities qualify as able to apply for a designation notice. Under subsection (3), it is the Secretary of state alone to whom qualifying competent authorities will jointly apply. It is the Secretary of State who reviews a notice and has the power to withdraw it, and it is the Secretary of State who makes transition arrangements.
Although there is a requirement in the Bill to consult the commissioner, the amendment seeks to formalise some independent oversight of the designation process by ensuring that the commissioner has an actual say in approving the notices and adjusting the concentration of power so that it does not lie solely in the Secretary of State’s hands. That would mean that should the Secretary of State act in bad faith, or lack the expertise needed to make such a decision—whether aware or unaware of this fact—the commissioner would be able to help to ensure that an informed and proportionate decision was made with regard to each notice applied for. This would not present any designation notices from being issued when they were genuinely necessary; it would simply safeguard their approval when they were.
Sir John Whittingdale
I assure the hon. Lady that clauses 25 and 26 are necessary for the improvement of national security. The reports on events such as the Manchester and Fishmongers’ Hall terrorist incidents have demonstrated that better joined-up working between the intelligence services and law enforcement is in the public interest to safeguard national security. A current barrier to such effective joint working is that only the intelligence services can operate under part 4 of the Data Protection Act, which is drafted to reflect the unique operational nature of their processing.
Carol Monaghan
Of course, the reports on incidents such as those at Fishmongers’ Hall and the Manchester Arena pointed to a general lack of effective collaboration between security forces and the police. It was not data that was the issue; it was collaboration.
Sir John Whittingdale
I certainly accept that greater collaboration would have been beneficial as well, but there was a problem with data sharing and that is what the clause is designed to address.
As the hon. Member for Barnsley East will know, law enforcement currently operates under part 3 of the Data Protection Act when processing data for law enforcement purposes. That means that even when they work together, law enforcement and the intelligence services must each undertake separate assessments regarding the same joint-working processing.
The Chair
Order. I am making a habit of interrupting the Minister—I do apologise—but we have some news from the Whip.
Ordered, That the debate be now adjourned.—(Steve Double.)
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People with Disabilities: Cost of Living
(11 months, 4 weeks ago)
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Marion Fellows (Motherwell and Wishaw) (SNP)
I beg to move,
That this House has considered the cost of living for people with disabilities.
It is a real pleasure to serve under you, Dr Huq. In the years in which I have had the privilege of being the Member of Parliament for Motherwell and Wishaw, I have received loads of briefings from many organisations to support my work in these types of debate. For this debate, I have received a record number of briefings, and they have come from these organisations, which I shall name check: Scope, the Food Foundation, Guide Dogs, the British Association of Social Workers, the MS Society, Which?, Mencap, the Cystic Fibrosis Trust and the Motor Neurone Disease Association. That tells its own story.
Those organisations are so worried. They are telling me that the Government have continuously failed disabled people, their carers and their families; that the Government are tinkering around the edges of a cost of living crisis that is affecting millions of people across the United Kingdom; and that the impact of the crisis affects those with disabilities, their carers and their families even more seriously than it affects the rest of the population.
I woke this morning to the news that the Prime Minister is having a farm-to-fork summit on the cost of food—the figure of 19.1% is being bandied about as a headline for food price inflation—and when I opened my iPad, I read about a father who had admitted to stealing baby formula to feed his child because his wife had been watering down the formula. That is the UK in 2023, and the situation is even worse for disabled households.
Scope’s recent disability price tag report shows that the cost of being disabled in 2023 has risen to £975 per month for a disabled household, inclusive of disability benefits. People do not get disability benefits on top; that is inclusive. The personal independence payment was designed to offset the additional costs associated with being disabled, but it is now totally inadequate. That figure represents a £300 per month increase from 2016-17, when Scope last did this. Scope also says that it would be £1,122 per month if the figure were updated to accommodate the inflationary costs for the 2022-23 period. The bottom line is that Government support for those with disabilities has been wholly inadequate throughout the cost of living crisis. Disability Rights UK has said that the cost of living payments “don’t touch the sides”.
Christine Jardine (Edinburgh West) (LD)
The hon. Lady is making a powerful argument. The Resolution Foundation said recently that those with disabilities have 44% less available to spend in the current economic crisis than those of us who are fortunate enough to be fully abled. At a time when energy costs have made life more difficult for everyone, does she think that we have perhaps missed a vital opportunity to support the disabled by helping them more with those costs?
Marion Fellows
The hon. Lady will know that I do not often agree with her, but in this case I totally agree. There are many other organisations—she mentioned the Resolution Foundation, and the MND Association has outlined that those with motor neurone disease face additional costs of £14,500 per year. Naturally, those with the condition have much higher energy needs in order to power their essential, life-saving equipment.
Margaret Greenwood (Wirral West) (Lab)
The latest Government statistics show that 68% of PIP decisions appealed by a claimant were overturned. Does the hon. Member agree that there is a pressing need to improve the PIP assessment to ensure that people who are disabled or have a serious health condition do not have to fight continually through reassessments and tribunals to get the support that they so desperately need?
Marion Fellows
I could not agree with the hon. Lady more. This is a scandal, and it is a huge waste of public money with the number and cost of appeals and tribunals.
Justin Tomlinson (North Swindon) (Con)
To follow on from that point, why would the Scottish Government seek to make it harder for people to access support through the PIP system for when it is fully devolved to the Scottish Government?
Marion Fellows
I wish that the hon. Member would take that back. In Scotland, we treat people with dignity, fairness and respect. We help them to fill in their adult disability payment applications, and we make it much easier for them—[Interruption.] The hon. Member is shaking his head, but he is wrong. We make it easier for people with long-term illnesses from which they will not recover. They do not have to go through continuous reassessments.
David Linden (Glasgow East) (SNP)
Will my hon. Friend point out to the hon. Member for North Swindon (Justin Tomlinson) that unlike the UK Government and their pernicious welfare system, the Scottish Government have actually worked with people with experience of the benefits system and those who have disabilities in designing that system? It is rather rich that he lectures us from a Tory Government who have been found to have treated people rather inhumanely.
Marion Fellows
I thank my hon. Friend for that. I am appalled at the remarks being made. I shall move forward and I will not take any further interventions in the meantime; I need to make progress.
The insufficient cost of living support, combined with an inadequate system of social security and an economic crisis created by this Government and their predecessors, have created an unwelcome perfect storm for those with disabilities, plunging millions into poverty. Disabled people often face higher costs for their energy, and they are saying that they need more heating—most disabled people need more heating to stay warm. Others say that they must use more electricity simply to plug in their assistive technologies. Those extra costs mean that disabled people have less money in their pockets and, in many cases, go without. The result is that disabled people are more likely to have a lower standard of living, even when they earn the same as a non-disabled person.
According to the British Association of Social Workers, 7 million people—almost half of those living in poverty in the UK—are either disabled or live with someone who has a disability. Families with a disabled loved one are seriously struggling as they have to make difficult decisions and cutbacks. Guide Dogs UK has highlighted how families with a child with visual impairment are being hit incredibly hard, and the mental health of parents is suffering.
The disabled poverty figures are unsurprisingly reflected in food bank usage, with the Trussell Trust advising the Work and Pensions Committee that disabled people are hugely overrepresented in food poverty. More than half of food bank users in the UK are disabled.
The covid pandemic deepened pre-existing inequalities in society for disabled people, and the rise in inflation has disproportionately hurt the most vulnerable in society. Disabled people and their households have, on average, lower incomes than their non-disabled counterparts in spite of incurring higher costs. Poverty and disability are often mutually reinforcing, particularly for working-age adults.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The hon. Lady is making a powerful speech about the absolute travesty of the Government’s treatment of disabled people and the social security cuts that have been added to by the cost of living crisis. Is she as concerned as I am that there will be consequences, including, as we have seen over the past few years, disabled people on social security who will die?
Marion Fellows
That is the most awful fact and the most worrying thing that has been said today. Many of us in this Chamber will have direct knowledge of that from casework and constituents we have had to deal with.
As I said, disabled people tend to spend more on essential goods and services. People with special dietary requirements have been particularly hard hit by food inflation. Statistics from January this year show that households with specific dietary requirements pay up to 73% more for food than those who do not need to buy “free from” products, according to analysis by The Allergy Team.
In December 2022, the Food Standards Agency found that households with food hypersensitivity—food allergy, intolerance and coeliac disease—spent an extra 14p for every £1 compared with those who did not need to buy alternatives. For example, pea milk is £2 a litre—50% more expensive than cow’s milk. Gluten-free penne pasta at Morrisons jumped by 125% in 12 months, from 60p in January 2022 to £1.35 in January this year. I have many other examples.
The SNP urges the Government to use all the powers at their disposal to tackle the cost of living crisis on the scale required. We continue to push them to use their powers to tackle the cost of living crisis, including access to borrowing, providing benefits and support to households, VAT on fuel, taxation of windfall profits and regulation of the energy market. The reversal of the planned increase in the energy price guarantee is welcome, but bills will still be unsustainable for many people. Disabled people and their carers and families across the UK are paying a steep price for the economic mismanagement of the UK Government, with the cost of living forcing many to choose between heating their homes or eating.
Everyone welcomes the UK Government’s increase in benefits by 10.1%. However, the Chancellor has yet again failed to reinstate the universal credit uplift and scrap the unfair benefit cap and two-child limit. Scope stated that a further long-term solution was required to address the crisis of costs that many disabled households now face. Legacy benefit claimants, many of whom are long-term sick or disabled, have been unjustly denied the additional uplift that universal credit claimants got during the pandemic. The SNP has consistently called on the Government to reinstate the uplift and increase it to £25 a week, and to extend it to all means-tested legacy benefits, as well as getting rid of the benefit cap and the two-child limit. The UK Government’s continual refusal to fix the extensive known problems with universal credit is unacceptable and is subjecting vulnerable people to additional unnecessary hardship.
Although a one-off additional payment of—wait for it—£150 to disabled people is welcome, it will not provide the same kind of long-term assistance as a benefits uplift. As I said, Disability Rights UK says that the lack of “meaningful increases” in disability benefits over recent years means that the payment is not enough and does not “touch the sides” of what disabled people, families and carers need. Rising food bank need demonstrates that more and more people are going without the essentials, and the Trussell Trust said:
“The level of benefits, especially benefits for people who are sick and disabled, needs to be high enough for people to live.”
I remember sitting in the main Chamber and listening to a Tory Member who was surprised that sickness benefit was £92-something, which she thought was quite generous. She thought that was a daily rate. It is a weekly rate, and it has not increased by that much. We cannot continue like this. We are punishing the most vulnerable people in our society.
According to a 2020 report from the Royal British Legion and Poppyscotland called “Making the benefits system fit for Service”,
“households containing working age adults in the ex-Service community are over twice as likely to receive sickness or disability benefits as UK adults. Within that increased likelihood there will be veterans in receipt of military compensation who may rely on welfare benefits more than their peers, such as those who are unable to undertake civilian employment due to their injury or disability having left Service ”.
Research participant responses demonstrated common themes, from problems completing applications to difficulties explaining the impact of service-related conditions on wellbeing. The research was conducted prior to the introduction of the adult disability payment in Scotland. I should like to ask the Minister: what are the Government going to do about this scandal? Organisations are telling me that the measures already announced have little or no impact because of spiralling food inflation and energy costs.
According to the House of Commons Library, the Government’s planned expenditure on Trident renewal for 2023-24 is £3 billion. The UK Government are making a political choice to spend vast amounts during a cost of living crisis—an obscene commitment to spend money on the renewal of nuclear weapons in the face of the difficulties being met day and daily by the most vulnerable people in the United Kingdom.
The UK’s recent spring Budget was another missed opportunity for the Government to take meaningful action to boost income and support households, including disabled people—really, you have to do better. The changes to UK benefits and the wider support to better meet the needs of disabled people are welcome, but the effect of those changes must not force more people into low-paid and insecure employment. The disability pay gap must be looked at seriously by the Government. Will the Minister tell us what they are actively doing to end it?
The health and disability White Paper introduces a new universal credit health element, with eligibility through PIP that could be much more restrictive than the work capability assessment. Around 45% of “no work requirements” universal credit recipients in Scotland are not in receipt of either a disability benefit—such as attendance allowance, disability living allowance or personal independence payment—or carer’s allowance. Once the policy is enacted, divergences between PIP and ADP could result in diverging conditionality and spend on universal credit. As the Minister will no doubt acknowledge, I have already raised this issue with him. Can we have an update on what is happening there? Disability organisations are concerned that the changes are likely to see fewer sick and disabled people getting the support they need.
The new in-work progression offer to help people into work, increase their earnings and move them into better-paid jobs will inevitably mean that disabled people are exposed to the sanctions regime. By September this year, 600,000 people claiming universal credit, including disabled people and those with physical and/or mental health conditions, will be required to meet a work coach to increase their hours or earnings or risk being sanctioned. We know that sanctions do not work; the Government admitted that in the paper they kept hidden for quite a long while.
The health and disability White Paper is a missed opportunity to implement much-needed changes. The MS Society has outlined how the Government’s White Paper does not include substantive plans for how the PIP process will be improved or any information on how the criteria may be reformed. Those are real issues right now and there is not much hope, looking forward, for people with disabilities.
The Scottish Government have taken action, within their devolved powers and fixed budget, that will help disabled people facing the combined effects of higher energy bills, rising inflation and UK Government policies. In Scotland, the Government believe that disabled people should have freedom, dignity, choice and control over their lives, and they want to remove barriers that prevent disabled people from enjoying equal access to full citizenship.
The Scottish Government have therefore introduced things such as the fuel insecurity fund. They also work with Fuel Bank Foundation, the Scottish Federation of Housing Associations, Advice Direct Scotland and the Wise Group. Similarly, core staff costs will be provided to Energy Action Scotland, as Scotland’s national fuel poverty charity. The Scottish Government are trying their best; I do not see that level of commitment and action from the UK Government.
Throughout February and March this year, almost 400,000 low-income households in Scotland automatically received £50 in financial support towards their energy bills, in addition to what the UK Government have done. The Scottish Government are also doing a lot of other things, including increasing carer’s allowance. They are doing their best but, without the full powers, including borrowing powers, it is impossible for them to do much more. I should also point out that partnership working is much more normal practice in Scotland. No Government policy is introduced without taking into account the lived experience of people affected by that policy, and I urge this Government to take the same approach.
I realise we are short of time, so I would like to close by pleading with the Government once again to exercise some empathy and compassion for those with disabilities and to try to embody the sense of humanity demonstrated by Kevin Sinfield towards his friend Rob Burrow on Sunday. We must remember that each and any one of us can become disabled. The Government must act now to offer greater support to those with disabilities to offset the additional costs during the cost of living crisis.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Lady alluded to the moving and emotional scenes of Kevin Sinfield carrying his friend over the finishing line. Does she agree that that eloquent video spoke more to the heart of the nation than any moves by any Government could ever do, unless they put money where their mouths are?
Marion Fellows
I could not have put that better myself; that is so true. I had help writing this speech, as many of us do, and my young researcher put in that reference; I did not see that event, because I did not watch any TV over the weekend—I completely switched off. It is true that something like that brings a nation together to understand how we must be more caring. It is not about being nice to people; it is about enabling them to live full lives as full citizens.
Debbie Abrahams
Kevin Sinfield is my constituent and a good friend. The House should know that his fundraising started because he was concerned about the future of his friend and his friend’s family. The families of severely disabled people are worrying for their futures—for their survival. That is what prompted him to start fundraising—not just to do the research, but to ensure they had a future together.
Marion Fellows
The question of people becoming disabled through no fault of their own is germane to the entire debate. The perception is often that disabled people are the folk we see in wheelchairs who have always been unable to do things. So many people suffer from disabilities through accident or disease, and none of that is foreseeable—whole lives change.
This is my conclusion, I assure you, Dr Huq. Let me lay out disability organisations’ simple asks, which will improve the lives of so many people. Will the Minister talk about Government funding for a social energy tariff that discounts energy bills by 50% for disabled people, carers and those on low incomes? Could people be automatically enrolled in that scheme and could it be mandatory for all suppliers? Will the Government reverse the warm home discount eligibility criteria changes, uprate benefits in line with inflation and ban all forced installations of prepayment meters? Can hon. Members believe that people with disabilities are having prepayment meters forced on them in 2023? May I have the Minister’s assurance that he will look at all those asks, make sure they are acted on and thus end the misery for so many of our disabled citizens, their carers and their families? They are not asking for charity; they are asking for equity. All the people I have spoken about deserve so much better.
Dr Rupa Huq (in the Chair)
There are three Back Benchers down to speak. I will take the three winding-up speeches from 10.28 am—we do not get any extra time because of the late start—so speeches should be limited to about eight and a half or nine minutes. I call Justin Tomlinson.
Justin Tomlinson (North Swindon) (Con)
Thank you, Dr Huq—a double thank you for your late substitution this morning, for which we are all very grateful. It is a pleasure to follow the hon. Member for Motherwell and Wishaw (Marion Fellows), who clearly demonstrated a real passion for this important subject. I think her constituents would recognise that she is a real champion for those who need a voice in this area, and I pay genuine tribute to her.
I also pay tribute to the Minister, who I know will respond in full. He has immersed himself in the details of his role and has always shown himself willing to engage with stakeholders. I think we would all agree that there is a wealth of knowledge and expertise in local and national organisations, and the Minister is passionate to utilise that wherever possible. That has come through very clearly in his time as a Minister.
I pay tribute to local and national organisations up and down the country that provide people with advice and support in accessing the often complex and daunting layers of support that are potentially available. For example Tim Saint, of the Swindon Carers Centre, does a huge amount of work in our community to help people access support. During my time as a Minister, I was surprised to see how many people miss out on the various forms of support that we have all voted to give them, often because they are faced with a complex and daunting system.
We have made progress. Under PIP, including the legacy benefits of DLA, and attendance allowance, we are now spending £12.5 billion more in real terms on help for those with disabilities or long-term health conditions. Under the old legacy system of DLA, only 16% of claimants would access the highest rate of support. A few years ago, that figure had reached 33%, and for some health conditions, in particular mental health conditions, people are now six times more likely to access the higher rates of benefits. So we are very much heading in the right direction, and there are further opportunities to turbo-speed improvements with the forthcoming White Paper.
There are two key lessons the Government can focus on: speed and specialisation. First, on speed, there are lessons that can be learned from the welcome changes to the special rules for terminal illness. We were able to apply a policy change that was co-designed by stakeholders, their policy teams and end users—people with real-life experience. Using the same principles, we can widen the severe conditions criteria in the PIP system, removing up to 300,000 unnecessary assessments or reassessments each year.
The principle behind that is that we would look at specific conditions. We could then be fairly confident about the trajectory of that condition and set in place a timetable of support. For those people whose condition has perhaps changed more quickly than expected, there would still always be the option to have a light-touch assessment to speed up their access to the increased rate of support.
There is a sort of principle around this, which already exists with universal credit and the industrial injuries disablement benefit. An independent panel could look at these conditions, and one example would be motor neurone disease—I cannot understand what the point would be of putting somebody with MND through an assessment. Where we can be fairly confident of the deterioration of health conditions, we could put in place an automatic right to support, with the backstop that, if somebody’s condition, sadly, deteriorates more quickly, a light-touch assessment could then move them to the higher level of support much more quickly. Removing 300,000 people a year would mean we have more resources available to speed up the process for those who would go through the more standard, traditional route.
During covid, we made sure we kept the gateway open for new entrants, and it is a tribute to staff up and down the country that disability benefits continued. We used video and telephone assessment, a further benefit of which is that it allows for greater specialisation in terms of the assessors. Rather than relying on a fixed number of staff in each geographical location, we can assign someone with a particular health condition via telephone or video to other locations in the country. That also helps with the point about making sure that the assessments are right first time, so that people do not have to go through an appeals process further down the line.
I know that these broad themes are being considered as part of the White Paper, but they are a real win-win and they are probably things that people could rally around, regardless of which political background they are from. I certainly know from my time working with our very knowledgeable stakeholders and policymakers that there would be huge support for them.
A broader point is that not everything is black and white. As much as I admire the passion and drive of the speech by the hon. Member for Motherwell and Wishaw, there was a presumption that everything the Government do is terrible and that everything the Scottish Government do is good. I say that because I have a brother who is a proud Labour party supporter, another brother who is an SNP supporter, a sister who is a sort of Lib Dem/ Conservative and a cousin who is a Green, so we cover all the bases, and I was very much brought in the belief that things are not black and white.
To their credit, the Scottish Government identified that we could and should have made changes to the special rules for terminal illness and to PIP, which is the main disability benefit. The Scottish Government have had challenges; they had hoped to complete both those tasks many years ago, but that has proved a lot more complex, particularly when we start to unravel the complicated machinery behind those benefits.
In my former life, I attended inter-ministerial meetings with Scottish officials and Scottish Ministers, who were always a great pleasure to work with, and I absolutely admired their end goal. However, they also had that presumption that the system was completely broken and had to be completely changed. Therefore, they sometimes would not listen to stakeholders and policy experts in disability and health charities who wanted changes but not necessarily the changes the Scottish Government had settled on.
For example, there is a principle that the Scottish Government do not like assessors. I understand that, given a lot of the media coverage of the earlier years of PIP, in particular. However, there is a reason why, under DLA, only 16% of claimants got the highest rate of support, compared with 33% under PIP. Many of the people who navigate the system are the least well equipped to do so. Therefore, we are relying on a system where, in effect, their evidence—self-supplied—is the only basis for them to get DLA. However, assessors tease out additional things and fill in the gaps, which is why we have gone from 16% to 33%.
David Linden
The hon. Gentleman is giving an incredibly thoughtful speech, but I have a fundamental objection to assessments. However, even if I was to follow the former Minister down the assessment route, we would find ourselves in a ridiculous situation where the people carrying out the assessments have no professional qualifications to enable them to adjudicate on the condition. For example, in one recent constituency case, someone was actually asked, “Does your son still have autism?”. That is the level of expertise we are dealing with and that, I am afraid, shows that the system is broken.
Justin Tomlinson
That shows the slight misunderstanding here—and I say that in a good spirit. All the health practitioners who carry out assessments have at least two years’ experience and come from health professional backgrounds. However, the point where the hon. Gentleman is right is that they are not necessarily specialists in certain areas. If someone goes to a GP, the fact that they are the initial gatekeeper to the NHS does not mean they are an expert in everything—they refer people on to specialists. There would generally be five or six assessors in each location, so we cannot expect the collective knowledge of those assessors to cover every single health issue. Through the introduction of telephone and video assessments, however, we can refer people, and that is what I am pushing for. The point is: the role of the assessors was not broken, but it needed improving. That is what both the UK and Scottish Governments were looking to do.
I am urging the Scottish Government to be cautious about relying too much on the claimant, because not all claimants are in a position to argue their case and understand the conditions. It is not even just a case of that; it is also about people being unaware of additional health conditions. I made a point earlier about those with mental health conditions now being six times more likely to get access to the highest rate of PIP. Many people do not realise that their mental wellbeing is being impacted by their physical health condition. They would enter the PIP system thinking, “My physical health condition is impacting on me. I’ll fill in all the bits on that and answer the questions.” However, the assessor’s questions on how that impacts mental wellbeing then begin to identify additional challenges that the claimant was either unaware of or had got used to and took for granted. That then gives them the additional points that allow them to enter the higher rate.
It is same around the special rules for terminal illness. We extended that from six months to 12 months, working with hospices, the health and disability charities and GPs. The Scottish Government, with very good intentions, tried to create a system where it was automatic. They then realised that not everyone can be dealt with automatically, because we are all terminally ill in the sense that nobody lives forever. Conditions then have to be put in, but that inadvertently creates a more complex system. It would have just been easier to say, as Northern Ireland did, “Actually, on this occasion, the UK Government—having listened to the stakeholders and health and disability charities—might be on to something. In this case, we ought to do the same.”
Dr Rupa Huq (in the Chair)
Order. I remind the former Minister that he has spoken for 10 and a half minutes, and I did want speeches to be kept within nine minutes. If he wishes to give us a concluding sentence, I will allow it, but we do have other Back Benchers.
Justin Tomlinson
Understood, Dr Huq. In conclusion, I urge the Minister to keep a laser-eyed focus on disability employment, ensuring that we provide support for not just the individuals seeking work but employers. The majority of people with disabilities develop them during working age, and we need to ensure that employers—particularly small and medium-sized employers—are equipped to support people with changing health conditions.
Dr Rupa Huq (in the Chair)
I call Wendy Chamberlain. Keep it within seven minutes, if you can, and then Marion Fellows gets time to wind up.
Wendy Chamberlain (North East Fife) (LD)
I shall keep my remarks short. I am grateful to take part in the debate, and I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing it.
At a basic level, it is more expensive to be disabled in this country, in the same way that it is more expensive to be poor. On every measure, disabled people and households have higher routine living costs than non-disabled households. In her opening remarks, the hon. Member referred to analysis from Scope’s disability price tag, published only last month, which stated that disabled households need on average an extra £975 to achieve the same standard of living as non-disabled households. Accounting for current inflation, that is over £1,100.
The reasons for that extra need are simple. Disabled households need to divert funds to pay for specialist products and services. They need to think about disability-related products that are often essential and costly, and they have increased energy costs as a result, both for heating and for electricity in relation to nutrition needs, as the hon. Member for Motherwell and Wishaw mentioned. A greater percentage of a disabled person’s disposable income is spent on food and energy, so the cost of living crisis has a disproportionate impact on them even before we think about things like the higher insurance premiums that disabled people face. The reality is that there has been a lack of financial support, and issues with PIP assessments mean that many are not accessing the payments to which they should be entitled.
I have particular concerns about the assessment of fluctuating conditions such as MS, ME and long covid. As has been highlighted, the expertise is simply not there for those kinds of complex conditions. On one day—and that day might happen to be the assessment day—a person may experience a better period of health than the rest of the time. I want further work on the health and disability White Paper to consider those things.
We are discussing Scotland quite a bit, but as a Scottish MP I cannot help doing so. I am conscious that MPs may sometimes have a bit of confirmation bias because people come to us from a casework perspective after trying every other source of help, so they are often desperate and some of the cases are quite complex. The Scottish Affairs Committee, of which I am a member, conducted an inquiry on welfare in Scotland 18 months to two years ago. I heard from stakeholders in Scotland that there was a more compassionate approach towards setting up the social security system in Scotland.
I will also say, however, that I am seeing casework on delays in adult disability payment processing in Scotland, so I hope that we will not end up in a similar position to elsewhere in the UK. I am concerned that the lack of a dedicated social security Minister in the new First Minister’s Scottish Government means a potential dilution of focus; I hope that that is not the case. The reality is that means-tested benefits are set too low, and the £150 cost of living support payment for disabled households, which was welcome given everything that I have outlined about the additional costs, was not enough.
In my remaining remarks, I will focus on carers. Hon. Members may not be aware that my private Member’s Bill, the Carer’s Leave Bill, has been progressing through Parliament; I am pleased to say that it should have its Third Reading in the House of Lords on Friday and I am hopeful that it will receive Royal Assent shortly thereafter. The Bill intends to offer people who are working as unpaid carers but are in employment the right to request time off from their employer. That is because the vast majority of disabled people will have support from an unpaid friend or family member, which could be to meet physical caring needs or to do the admin and emotional support around caring.
Carers provide unpaid work worth £530 million a year. However, 44% of working-age adults providing unpaid care for more than 35 hours a week are living in poverty. Frankly, that means that the people they are caring for are also living in poverty. When I was engaging with constituents about my Carer’s Leave Bill, it was very difficult to find constituents who would actually benefit from the Bill. The reality was that their caring responsibilities meant that they had eventually had to give up work because they just could not combine them both. Although I am hopeful that my Bill will help people—indeed, Carers UK estimates that it will help 2.4 million carers—there is clearly much more to do.
I want to take the opportunity to mention the very sad death of Kirstie Howell, the chief executive of Fife Young Carers. She did a great deal of work, and so does the charity, across Fife, including North East Fife. I send my condolences to the organisation and to her family.
If we do not provide the right support for young carers who are caring for disabled family members, they will not get into work in the first place and their household will continue to live in poverty. One way for the Government to help would be by raising the earning limit on the carer’s allowance. The reality is that caring never stops, so if we allowed those who are caring to work more before losing the carer’s allowance, it would potentially help disabled people and their families to deal with the cost of living crisis that we are facing. The Government have done a number of things during the cost of living crisis, but we feel that they have not done enough.
I will leave hon. Members with one last thought. I chair the all-party parliamentary group on ending the need for food banks. Along with the hon. Member for Motherwell and Wishaw, we conducted our first inquiry, which looked at cash or food in different responses to food poverty. A very telling statistic for me was that the one period of time during covid when food bank use went down rather than increasing was when the £20 universal credit uplift was in place. That tells us that when people get additional support, they are spending it on food, provisions and things they need for their families. For disabled people, we need that more than ever.
Sarah Green (Chesham and Amersham) (LD)
It is a pleasure to serve under your chairmanship, Dr Huq. I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing this debate on an important matter.
I rise to speak today as the daughter of a woman who lived with disabilities. Her daily challenges were significant, but I did not think of her as disabled until well into my late teens or early 20s, when I fully grasped her reality. That is because she lived a full and active life; she was ferociously independent and did not want her challenges to affect the rest of us or affect how she was treated by other people. I think we all know of people living with disabilities who show immense courage and fortitude. I pay tribute to them, because they do not want to be dependent. They want to live full, independent lives.
We know that the cost of living crisis has had a severe impact on many of our constituents. Last year, I ran a cost of living survey in my constituency. The responses from those caring for people with disabilities and from those living with disabilities were particularly heart-wrenching. One mother made the difficult decision to turn off her disabled son’s oxygen concentrator because she could no longer afford to pay her energy bills. He now relies on oxygen cylinders, which run out and which must be replaced on a regular basis. That brings its own challenges, but effectively their lives are now more complicated than they need to be.
Another constituent, in addition to having a spinal condition that has left him unable to work, is diabetic. He told me that because of the cost of living crisis and food inflation, he can no longer afford to follow the recommended diet for his diabetes. In his own words, he is playing Russian roulette with his health.
We all have examples we could share from our constituents. The simple truth is that the increase in the cost of living has had a disproportionately detrimental effect on people with disabilities. Disabled individuals and their households have, on average, lower incomes than those without disabilities. Furthermore, many people with disabilities have additional costs related to the treatment and mitigation of their condition. Those who encounter difficulty in leaving their home also have the added costs associated with being at home more often, such as higher energy bills.
What is more, even with existing disability-related financial benefits, those with disabilities are more likely to find themselves in relative income poverty. That has been compounded by benefits not having previously kept pace with inflation. Without drastic action, we risk a situation in which the most vulnerable in society are driven further into poverty. Reintroducing the universal credit uplift and extending it to all claimants on legacy benefits is a request that I have had from a number of constituents. What assessment has the Minister made of the help available to those with disabilities in the cost of living crisis?
Dr Rupa Huq (in the Chair)
I call the first of the three Front Benchers, David Linden for the SNP.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Dr Huq. I pay tribute to you for getting here in double-quick time as a late substitution. I commend my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) on securing this debate on a very important topic.
The cost of living crisis has permeated so many different aspects of our communities. The topic is brought up continually in my weekly advice surgeries, where sadly constituents have repeatedly told me that they are struggling to afford their weekly food shops and monthly energy bills. It is very much either/or. I am sure that other MPs in Westminster Hall today can relate to that—how helpless it feels to be sat across the surgery table from people who are clearly struggling and who desperately need support.
In far too many cases, people fall between the cracks and end up without the help that they not only deserve, but are entitled to. That is far too often the case for disabled people, who incur hidden costs through no fault of their own. As we have heard repeatedly this morning, disabled people and their families spend a greater share of their income on food and energy, the commodities that face the steepest rises in inflation. Again, as we have heard, people with special dietary requirements are being hit particularly hard by food inflation, with statistics from January showing that households with specific dietary requirements are paying up to 73% more for their food than those who do not need to buy “free from” products.
Disabled people face many additional costs related to the treatment and mitigation of their disability, such as equipment or therapies. In some utterly awful cases, disabled people face the impossible choice between powering essential medical equipment such as wheelchairs and ventilators and putting food on the table. All those extra costs hit harder because disabled individuals and their households have, on average, lower incomes than their non-disabled counterparts, with 27% of disabled people living in poverty compared with 21% of non-disabled people. The result is that disabled people are more likely to have a lower standard of living, even when they earn the same.
According to research from Scope, on average, disabled households need an additional £975 a month to have the same standard of living as non-disabled households, and if that figure is updated to account for inflation over 2022-23, those extra costs rise to £1,122 a month. The price tag on disability feels incredibly dystopian. What kind of Orwellian society are we living in when having a disability incurs a price tag?
We have only to reflect on the words of Nye Bevan to understand the absurdity of the situation. Bevan said:
“Illness is neither an indulgence for which people have to pay, nor an offence for which they should be penalised, but a misfortune the cost of which should be shared by the community.”
Let me make it clear: illness is not an indulgence or an offence. People should not have to pay or be penalised. If Nye Bevan could understand that in the 1940s, I am puzzled as to why the current British Government are having so much difficulty with the concept.
The Government must do more—so much more—to use all the powers at their disposal to tackle the cost of living crisis on the scale that is required. While the uprating of benefits in line with inflation was welcome, for far too many it sadly came too late. The additional payment of £150 to disabled people, while welcome, will not provide the same long-term assistance as a sustainable benefit uplift. Indeed, Disability Rights UK is on record as saying that the “lack of meaningful increases” in disability benefits over recent years means that the extra £150 “doesn’t touch the sides”, and it is right.
As my hon. Friend the Member for Motherwell and Wishaw said, the Scottish Government are taking action within their devolved powers and within their fixed budget to try to help disabled people with the combined effects of higher energy bills, the general rise in inflation and the impact of Westminster policies. Yes, there are things that we can do—for example, the winter heating payment; the Scottish Welfare Fund; spending money on discretionary housing payments, such as the £84.1 million being made available this year; the council tax reduction scheme; and the most generous concessionary bus scheme—but the reality is that devolution was not, and in my view never has been, set up to be a sticking plaster for bad welfare policies made here in London.
Yes, the Scottish Government are doing all that, but they are doing it with one hand tied behind their back. The brutal reality is that every additional pound that we spend on those measures to help with rising costs has to be funded by budgetary reductions elsewhere, given our largely fixed budget and our limited fiscal powers. Scotland has already suffered a decade of British Government-imposed austerity since the financial crisis, which has disproportionately hurt the most vulnerable people in society and has resulted in under-investment in our crucial public services. The SNP Government in Holyrood are using their limited powers and resources to do everything they can, but that has to be matched by the British Government. With every day that Westminster fails to use its reserved powers to adequately tackle the cost of living crisis, it is demonstrating that independence is the only way for people in Scotland to boost their income and build a truly fairer society.
In closing, I emphasise what is at stake for my constituents, whether they are in Barrowfield or Baillieston. We find ourselves in a dire situation in which it literally costs to be disabled—there is a price tag on being diagnosed with a disability. The additional monetary costs associated with being disabled are compounded by the myriad ways in which society is set up to penalise disabled people.
The social model of disability tells us that people are disabled by barriers in society, not by their impairment or by indifference. The barriers can be physical, such as in buildings that do not have accessible toilets or libraries that do not have Braille versions of books; attitudinal, such as the assumption that disabled people cannot do certain things; or systemic, as in this case, when the cost of simply living as a disabled person is higher and Government support has systemically failed. It is only by removing those barriers that we can achieve equality and offer disabled people more independence, choice and control. That is why I believe that the Government must do so much more to protect the most vulnerable in society.
Dr Rupa Huq (in the Chair)
I call shadow Minister Vicky Foxcroft for the official Opposition.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
It is a real pleasure to serve under your chairship, Dr Huq; I am very happy that you could make it here today. I pay tribute to the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing this important and timely debate. There is no doubt that disabled people are being disproportionately impacted by the cost of living crisis, and it is right that we are here to debate the issue. As the hon. Member outlined, a number of organisations have been in touch to outline their fears and worries about how disabled people are struggling, and I hope that the Minister will respond positively to the many points that the hon. Member and others have raised.
The economic impact of disability is significant. Many disabled people are excluded from full economic participation. According to the most recent figures from the Office for National Statistics, the employment rate for disabled people is just over 53%, which compares with almost 83% for non-disabled people. In other words, the disability employment gap stands at just under 30 percentage points. From speaking to many disabled people, I know that many of them want to work but are prevented from doing so by societal barriers.
The difficulties do not stop with getting into employment. Once they are in work, disabled people also face a disability pay gap. As of 2021, the gap stands at 13.8%, which means that disabled people earn almost £2 per hour less on average than non-disabled people. As other hon. Members have outlined, the other side of the economic impact is the extra cost associated with having a disability.
Margaret Greenwood
My hon. Friend is making an excellent speech. When I met representatives of Scope a few months ago, one issue they raised was the household support fund. It is designed to help vulnerable people across England and is administered by local authorities, but it has not helped many disabled people. Many people are not aware of its existence. Does she agree that that is shocking and that, as the Government have extended the fund until the end of March 2024, it is vital that people are made aware of the support that is available?
Vicky Foxcroft
My hon. Friend raises an important point, and I completely agree.
The costs will vary depending on the specific disability or disabilities that an individual has, but they might include assistive equipment, care and therapies—things that are essential for them to live their lives. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) raised the fear of more disabled people dying, and my hon. Friend the Member for Wirral West (Margaret Greenwood) rightly pointed to problems with PIP decisions and the need for the reform of the assessment process.
We all know that disabled households tend to spend more on essential goods and services such as heating, food and travel. As we have heard many times, last month the disability equality charity Scope released updated research on the extra costs associated with having a disability—the so-called disability price tag. When Scope last calculated the price tag in 2019, it stood at £583 per month. The update makes for very sober reading: over the last four years the price tag has risen to a shocking £975 per month, which is equivalent to 63% of household income. That means that disabled households need to find almost £12,000 extra per year to achieve the same standard of living as non-disabled households.
The hon. Member for North East Fife (Wendy Chamberlain) rightly articulated the escalating rise in food costs, which under the Conservatives have risen at the highest rate for more than 45 years. Depending on the nature of their disability, some people have difficulty preparing certain foods and rely on pre-prepared or convenience food, which frequently works out to be more expensive than buying raw ingredients. The price of ready meals rose by almost 22% in 2022. If someone has difficulty standing or sitting for long enough to prepare a meal from scratch, they might feel they have no choice other than to pay those prices.
The hon. Member for Chesham and Amersham (Sarah Green) raised the case of a constituent who could not afford their energy costs and had to switch off important equipment. Disabled people have been hit hard by rising energy prices not only because they might have difficulty keeping warm and spend more time at home, but because many have to run life-saving medical equipment. In the Commons Chamber at the end of last year, I raised a case in which the actor Kate Winslet stepped in to help a family faced with a £17,000 bill.
I am sure the Minister will tell us that the Government have taken steps to support disabled people through the crisis by delivering the disability cost of living payments. Disabled people may also benefit from broader support measures such as the energy price guarantee and other cost of living payments for those on means-tested benefits. What the Government will probably not remind us of is that hundreds of thousands of people are no longer entitled to the warm home discount since the Government excluded those who claim disability living allowance, personal independence payment and attendance allowance.
I find myself in the odd position of agreeing with the hon. Member for North Swindon (Justin Tomlinson) that we should abolish reassessments for conditions that we know will not improve or are deteriorating. I am interested in how the Minister will respond to that idea.
Among many others, Disability Rights UK has said that the support given to disabled people has barely touched the sides. Trussell Trust figures show that even in early 2020, 62% of working-age people referred to food banks were disabled. A Mencap survey has revealed that 35% of people with a learning disability have skipped meals to cut back on costs and 38% had not turned on their heating despite being cold. I could go on, but others have already stated the case very eloquently this morning, so I will finish by asking the Minister to commit to working closely with disabled people and disabled people’s organisations to find a sustainable solution to the crisis. As many have already said, they genuinely are the experts by experience.
The Minister for Disabled People, Health and Work (Tom Pursglove)
It is a pleasure to serve under your chairmanship, Dr Huq. I thank you profusely for stepping in and taking on these proceedings to allow this important debate to go ahead.
I also thank the hon. Member for Motherwell and Wishaw (Marion Fellows), who is passionate about these issues. We have a constructive working relationship, and I always enjoy spending time with her and talking about the issues that are important to her constituents and people across Scotland. I continue to engage with her and am always willing to engage with colleagues from all parties on such matters. In that spirit, I thank Members for their contributions, which have covered a wide range of points. I will endeavour to address as many of them as possible, while making sure that the hon. Lady has the opportunity to sum up the debate.
I thank the many charities, both locally and nationally, that do so much good work supporting people, particularly those who are vulnerable or disabled. They do so in an effective way by working collaboratively with those individuals, often in difficult and challenging circumstances. Perhaps most importantly, charities make sure that there is awareness of the support that is available to people.
I want to make it clear at the outset that the Government recognise the difficulties that many households have experienced during this period. It has been incredibly difficult, and it is impossible for any Member of Parliament not to be acutely aware of that, given our constituency correspondence, and our conversations when we are out and about and in our surgeries. A lot of that is explained by high global gas prices—I think we all recognise the root causes—and the market volatility that has flowed as a result. That has undoubtedly had an impact on affordability for individual households. It has put a considerable strain on the cost of living, and I would argue that it explains why the Prime Minister is absolutely right to have set getting inflation down as one of the Government’s key missions.
Margaret Greenwood
One of the things that charities representing disabled people have been campaigning for is a social tariff for energy—the Minister was just talking about energy—to give disabled people, older people and carers who face high energy costs discounted energy bills. In January, I asked the Government what plans they had to introduce a social tariff for energy, and the Minister at the time replied:
“The Government has committed to work with consumer groups and industry to consider the best approach, including options such as social tariffs”.
Will the Minister please provide an update on that? Also, I urge him to have discussions with disabled people and the charities that represent them, as well as industry and consumer groups.
Tom Pursglove
I am extremely grateful to the hon. Lady for her intervention. If I may, I will come to that point a little later, because I want to address the social tariff issue directly.
We understand and recognise that many households in the United Kingdom include vulnerable people who may be elderly or disabled, or who may have a medical condition. Often, that inevitably leads to higher energy costs. We are clear that everybody must be able to afford their energy usage, particularly to be able to power any machines and equipment that they might require. With that in mind, I would argue that the Government acted decisively and rapidly by putting in place a significant and comprehensive package of support to assist with the cost of living challenges. It is worth more than £94 billion in 2022-23 and 2023-24—an average of more than £3,300 per UK household. It is also important to note the 10.1% uplift to benefits across the board.
To reflect back on 2022-23, one of the vehicles through which we were able to deliver that support was the cost of living payments—the £1,100 payments for some households during the 2022-23 financial year. It was a remarkable achievement that, from the first announcement back in May last year to delivery, more than 30 million cost of living payments were paid last year. More than 8 million households received up to £650 across two payments; more than 8 million pensioner households received an additional £300, on top of their winter fuel payments; and 6 million people receiving an extra-costs benefit such as personal independence payment or adult disability payment in Scotland received a £150 disability cost of living payment.
Those payments came alongside a wider package of cost of living support, with the energy price guarantee capping fuel bills at £2,500 for average use, the £400 off domestic electricity bills that was received by every household in Great Britain, and then the council tax reductions for properties in bands A to D in England, as well as—this was an important part of the package, recognising that people’s circumstances are often not neat and that there is a risk that people fall between the cracks of the structured support—the household support fund, including funding in that envelope for the devolved Administrations. We extended that support twice, and the total has been £1.5 billion since October 2021.
I certainly feel that the household support fund has been a helpful vehicle for us to get support out to people by working with local authorities. I totally accept that we should look at what more we can do about awareness of it and getting the message out. Of course, many of our partners, such as Citizens Advice and advice services, are invaluable in helping the Department and local authorities to get the word out about it, but I would certainly be keen to look at any suggestions about what more colleagues think we can do about awareness, because it has been an effective means of getting help to people who require it.
Margaret Greenwood
I thank the Minister for giving way again; he is being extremely generous. He is talking about what else we could do. Will he recognise the erosion of advice centres for constituents? I am sure that many of us in this room are acutely aware that there has been an erosion of the provision of advice to people, and particularly to disabled people. Perhaps the Minister could speak to his colleagues about looking at funding such centres, because a lot of them came about through local authority funding, which has been squeezed to such a degree that there is no longer the same level of advice available in our communities as there should be.
Tom Pursglove
I will certainly and gladly take that point back to the Department. I am sure it is something I can pick up on during the many engagement sessions that I have, particularly with disability charities and disabled people’s organisations. I would be keen to hear their views on how the issue is best approached and what more we can do in the advice space.
I want to touch on the cost of living support in place for 2023-24. Members will recall the commitments that my right hon. Friend the Chancellor of the Exchequer made in the autumn statement, including a firm commitment to support the most vulnerable people in our society. That will be delivered through 8 million low-income households getting £900 cost of living payments. I am delighted to say that my Department has already delivered 99% of the first cost of living payment of £301 to the 7.3 million households in receipt of a means-tested benefit such as universal credit. That in itself represents a £2.2 billion injection of help for households.
I am also pleased to confirm that we will shortly lay in Parliament regulations that will allow us to pay the additional £150 disability cost of living payment to 6.5 million people throughout the UK who receive an extra-costs disability benefit. Those payments will land in people’s bank accounts in the summer. We will also shortly lay regulations that mean that this winter pensioner households will again get an additional £300 on top of their annual winter fuel payment, as they did last year.
David Linden
There has been a bit of a problem whereby some of the cost of living payments have excluded those who have previously been sanctioned by the UK Government. In essence, that means that people are doubly penalised. Will the Minister confirm that any regulations he introduces will not include any provision such that people will be doubly punished, if they have been sanctioned, by not receiving the cost of living payment?
Tom Pursglove
I will gladly take that point back and speak to ministerial colleagues in the Department about that aspect. The hon. Gentleman will recognise that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), has generally led on the legislative efforts to put this package in place, but I would be happy to raise that with her and to get him a proper, full, considered answer to that point.
Let me deal directly with one key issue that has come up in the debate: the structure of the cost of living payment and the argument that the payment is itself too low. I stress that the rationale is different for each of the cost of living payments. The Government’s view is that it is right that the highest amount goes to those on means-tested benefits, given that those on the lowest incomes are most vulnerable to rises in the cost of living. Having said that, we estimate that nearly 60% of individuals who receive an extra-costs disability benefit will receive additional support through the means-tested benefit payment. More than 85% will receive either or both of the means-tested and pensioner payments.
I assure colleagues that we are absolutely committed to ensuring that disabled people and people with health conditions receive the support that they need, which is why in 2022-23 we spent nearly £69 billion in real terms on benefits to support disabled people and those with health conditions. We will continue that throughout 2023-24 by uprating disability benefits in line with last September’s consumer prices index inflation figures. That means we expect to spend around £78 billion in 2023-24, which is 3.1% of GDP. That is a stark statistic. I recognise that Trident is a significant issue for the Scottish National party, and the figure of £3 billion was raised, but I and the UK Government would argue that there are strong reasons why we have a nuclear deterrent, which is a debate for another day.
The scale of support that we provide—to the tune of £78 billion in 2023-24—to people with disabilities and health conditions is significant. By 2027-28, total disability benefit spending is forecast to be more than £41 billion higher in real terms compared with 2010-11. Spending on extra-costs disability benefits alone will amount to £35 billion this year, all paid tax free, and in addition to any other financial or practical support that disabled individuals may receive.
The hon. Member for Chesham and Amersham (Sarah Green) asked about the adequacy of the disability cost of living payment and its evaluation. We are committed to an evaluation of the cost of living payments later this year. The disability unit is also working to build an evidence base to better understand and evidence the full impact of cost of living challenges for disabled people, across a range of sectors. It is trying to do that collaboratively and is drawing on the expertise, views and experiences out there to help us to shape that work.
Wendy Chamberlain
Given that the Minister is committing to take some things away for further discussions with ministerial colleagues, may I repeat my plea in relation to carer’s allowance? It would help if we let carers work and at the same time keep their carer’s allowance.
Tom Pursglove
I am happy and willing to keep that aspect of our policy under review to see whether there is more we can do to unlock that. That is a commitment I make to the hon. Lady; I am interested in looking at and exploring that further.
There were several references in the debate to energy costs, particularly in relation to the cost of equipment. The Government supported families across the UK last winter through the energy price guarantee, which places a limit on the price that households pay per unit of gas or electricity. Colleagues will know that that has been extended until the end of June at the £2,500 level, thereby ensuring that families will save on average around £160 per household throughout that period.
Existing support is also available through cold weather payments and the warm home discount. The property services register, which is run by energy suppliers, offers additional free services to people of pensionable age, who are registered disabled, who have a hearing or visual impairment, or who have long-term ill health. That register helps to ensure that people in vulnerable situations are able to access extra help when needed, such as when there is a power cut.
Let me talk about the situation moving forward. This is more a matter for colleagues in the Department for Energy Security and Net Zero but, of course, engagement on this issue goes on across Government. On the energy market reforms in the energy security plan released in March, which were touched on, the Government intend to consult on options for a new approach this summer. We will invite and welcome the public and our stakeholders to use the consultation to provide feedback on our proposals.
To directly respond to the hon. Member for Wirral West (Margaret Greenwood), I am keen that our work does involve engagement. I will assist in facilitating that with disabled people, their organisations and their representative bodies, to make sure that their views are heard, particularly in relation to the social tariff, for which there is a significant body of support. It is right that we look at that in detail as part of the wider reform package.
There is also significant Government help for energy insulation, ensuring that people are properly supported to better protect themselves from the cold and making homes as energy efficient as possible.
I will touch quickly on prepayment meters, which have been asked about. Ofgem published a new code of practice on 18 April, which has been agreed with energy suppliers, to improve protections for customers being moved to a prepayment meter involuntarily. We argue that that is a step in the right direction, providing better protections for vulnerable households. The code of practice, however, is not the end of the process. We have always been clear that action is needed to crack down on the practice of forcing people, especially the most vulnerable, on to prepayment meters. The Department for Energy Security and Net Zero will continue to work closely with Ofgem and industry to ensure that the code leads to positive changes for vulnerable customers, and will not hesitate to intervene again if necessary.
Finally, I will touch on the various contributions made on the personal independence payment. On appeals, 4% of all PIP decisions have been successful at appeal. I am not complacent, but I am pleased to say that the journey time for PIP is now down to 14 weeks. I want to stretch that and see if there is more that we can do to improve it. On assessments more generally, I want hon. Members to think about some of the opportunities that the White Paper presents. The tests and trials of the severe disability group have been touched on. Matching expert assessors is a positive thing to do to help ensure that we get more decisions right first time, and scrapping the work capability assessment also provides an opportunity to focus on quality. I have no doubt that we will have plenty of opportunities to say more about that, as well as on fluctuating conditions.
Thank you, Dr Huq, for stepping into the breach. I am confident that the Prime Minister and the Chancellor will continue to show leadership on these issues. We keep the package of support that we provide under constant review, and I have no doubt that this Government will continue to be on the side of working people, disabled people, pensioners and those in our society who are vulnerable, to ensure that they get through these challenging times.
Marion Fellows
I really do thank you, Dr Huq, more than anyone else in the Chamber. I thank all Members who have taken part. Most of all, however, I thank all our disability organisations and advisory services, which do such valuable work to help the most vulnerable people in our society—disabled people, their families and their carers.
How we treat our most vulnerable citizens is a political choice for any Government. Tinkering around the edges, which has been the pattern for this Government for a long while, is not what we should be doing. I commend the Minister for the work he has done, as I do his predecessor, with whom I also worked closely, but it takes more than a disabilities Minister to change things in this country. We need full support from the Government and the Treasury, and a change in how we think of disabled people and what we do for them. Politics is the art of the possible. More support is possible, and I can assure everyone here that I will continue to press for it.
Question put and agreed to.
Resolved,
That this House has considered the cost of living for people with disabilities.
Abuse and Sexual Assaults in the NHS: Investigations
(11 months, 4 weeks ago)
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Dr Rupa Huq (in the Chair)
I will call Daisy Cooper to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as this is a 30-minute debate.
Daisy Cooper (St Albans) (LD)
I beg to move,
That this House has considered the adequacy of investigations into abuse and sexual assaults in the NHS.
It is a pleasure to serve under your chairship, Dr Huq. Today’s topic is one that I never in a million years thought I would have to table for debate, but because of two brave constituents and two investigative journalists, I am here to share their stories and shine a light on the shocking scale of the problem.
It should go without saying that hospitals should be places where all patients, visitors and staff should feel safe and be safe. Vulnerable patients entrust themselves and their care to strangers in an unfamiliar environment. Overworked nurses and other NHS staff work long shifts in understaffed buildings, often arriving or leaving their place of work in the hours of darkness. Patients, visitors and staff can find themselves isolated in cupboards, clinics or car parks out of public sight, and it is seemingly in those places that thousands of instances of sexual assault, misconduct and rape are perpetrated every year.
A brave constituent of mine—let us call her Joan, which is not her real name—told me that she was a survivor of sexual misconduct by a medical professional during her treatment. Soon after it happened, Joan disclosed it to her GP, who raised a complaint to the specific NHS trust. The complaint was treated by the NHS trust’s human resources team as an employer-employee dispute. What was Joan’s status in this? Not a victim, not a complainant. She was relegated to being nothing more than a third-party witness: a third-party witness who not only was treated appallingly by the medical professional’s council, but was not even entitled to know the outcome of the case—the case in which she was the victim.
Joan did not know whether any other complaint mechanisms were available to her or what the scope or limitations of each one might be, and she was not medically fit enough to find out. She trusted that the NHS trust would do the right thing. Thanks to her GP, Joan was then contacted by the General Medical Council, which wanted to investigate the professional concerned, but Joan was not mentally or medically in a position to progress the case. She tried to progress it about seven years later, but she was prevented from doing so by the GMC’s five-year rule, which prevents the GMC from investigating a professional’s fitness to practice if the case is older than five years. The GMC can, of course, still investigate where there are exceptional circumstances in the public interest, but the GMC told me that Joan’s case did not meet the threshold. It would not tell me how it defined “exceptional circumstances” and refused to disclose the legal advice that it had received about the definition.
Joan attempted to raise the case with the Parliamentary and Health Service Ombudsman. The PHSO replied that its remit is more procedural and administrative, and that it would not be the appropriate organisation. It redirected Joan to other organisations that were better suited to investigate—the GMC and the trust’s own disciplinary process, both of which she had used and both of which had failed her. The Professional Standards Authority oversees the GMC and other health regulators, but it too said that it could not investigate the case itself. Separately, Joan had a personal injury case against the hospital and secured a significant payment as a result, but we believe that the medical professional concerned is still practising.
Since 2020, I have sent 14 letters to different organisations, including three to the Government, and have tabled a number of written parliamentary questions to work out how this could have gone so badly wrong. What we have uncovered is shocking. First, there is no tailored support available for patients reporting incidents of a sexual nature. Patients are unclear about which organisations they can complain to, with NHS trusts, the GMC and the PHSO sometimes suggesting that each of the others is better placed to investigate. The GMC’s five-year rule continues to be a major barrier for investigating the fitness to practise of medical professionals perpetrating sexual misconduct on patients or other medical professionals.
Secondly, there has been no discernible progress on implementing the recommendations of three inquiries and reports from the Professional Standards Authority. Thirdly, no clear or systemic collection of data of reports of sexual abuse and misconduct within the health service is available for public or parliamentary scrutiny. Fourthly, the recent revelations by investigative journalists, which were published in Byline Times, of thousands of rapes and sexual assaults across the NHS mean that immediate action is needed to make our hospitals safe from sexual predators.
On the first issue—the staggering lack of support for survivors and the opaque reporting process—the NHS directs all patients to the patients advice and liaison service for complaints in the first instance. However, the route to escalate a complaint of sexual misconduct is not straightforward. A search online fails to direct individuals to NHS or Government resources that are instantly and clearly available. The options that do exist to address sexual abuse and misconduct often have limitations that patients are unaware of when embarking on a complaint, meaning that they discover them only in the course of trying to make such a complaint.
I have already explained through Joan’s case how the NHS’s disciplinary hearings, and the processes of the PHSO and the GMC all have shortcomings. We urgently need a simple and clearly signposted process that is designed for complaints of a sexual nature. We also need the five-year rule to be scrapped. Any case of sexual misconduct in the NHS should meet the tests of being both exceptional and in the public interest to investigate, but that is clearly not how the rule has been interpreted.
Two years ago, in 2021, the Department of Health and Social Care held a consultation on proposed regulatory reform of the GMC that would include the removal of the five-year rule. That would rightly reduce barriers to the investigation of serious cases of sexual misconduct where patients may not have felt in a position to report them at the time or where they were simply unaware that they could do so. The GMC itself is in favour of scrapping the five-year rule but, two years later, the Government refuse to say when they will respond and scrap the five-year rule, which I hope they will do. Perhaps the Minister will be able to tell us in this debate.
The second major problem that I identified was the repeated failure to follow up on three inquiries and the Government’s own report. Each inquiry found systemic failures in the NHS’s handling of reports of sexual misconduct. One called on the Government
“to develop and publish specific accessible information for patients on what they should and should not expect in consultations and who they can speak to for advice and assistance in relation to disclosures of alleged abuse.”
But to the very best of my knowledge and research, there has been no subsequent publication or announcement by the Government or any other responsible agency that seeks to act on the recommendations of those three inquiries.
The third problem on which urgent intervention from Government is needed is the shocking lack of data that prevents anyone from identifying the real scale of the abuse in health services. I tabled a series of parliamentary written questions over the past two years about the recording and monitoring of sexual abuse in the NHS. The Minister may remember the responses she gave on 9 November 2021 and 17 February 2022. She advised that
“all National Health Service organisations must prepare an annual report covering the number of complaints the organisation received”.
She later confirmed:
“While there is no specific requirement in legislation to categorise complaints by allegations of sexual abuse, NHS organisations are required to record the subject matter of complaints. NHS organisations must ensure that their complaints annual reports are available to any person on request.”
However, when I asked NHS England about accessing that data, it said that
“there is not a specific code for complaints of a sexual nature. Therefore in order to extract this data would require us to review every complaint received. In each year we receive between 6,000-8,000 complaints. If this information was requested under the Freedom of Information Act, this would most likely be exempt as it would exceed the threshold for time taken to provide a response.”
That is gravely concerning, first and most obviously because the Government are currently unable to gauge the scale of the problem, and, secondly, because local organisations tasked with commissioning much-needed advocacy support services simply are not able to do so. Will the Government mandate NHS England to create a specific code for complaints of a sexual nature?
Tenacious investigative journalists have uncovered some data. Sian Norris and Sascha Lavin have revealed that more than 4,000 patients, visitors and NHS staff were raped or sexually assaulted in hospitals in England and Wales during the past four years. However, this data could not be collected from the NHS trusts themselves. Instead, it had to be gleaned from police force records, because—incredibly—the NHS does not collate this information.
I am sure the Minister will be aware of a survey for Nursing Times in 2021 that found that three in every five nurses had been sexually harassed at work, with barely a quarter of these incidents being reported to employers, because nurses just do not believe it will get them anywhere. I mentioned at the beginning a second constituent who is a medical professional. She raised a complaint with her managers, only to come to the same conclusion—namely, that her complaint just would not go anywhere.
Although all of this is incredibly shocking, none of it should be news to the Minister here today. She will know that I put all of this detail to the former Secretary of State more than a year ago, on 13 May 2022. I did not receive a response for several months, but when I did I am afraid to say that it simply regurgitated all of the routes that I had complained about in my original correspondence. In further letters to and fro, the replies told my constituents and me nothing that we did not already know, and a promised ministerial meeting, which was rearranged four times, never came to pass. Although my constituents are not physically in attendance, they are following this debate closely on parliamentlive.tv. I have no doubt that many more survivors of these abhorrent crimes will be listening, too. They all want to know what the Government will do.
I have a series of questions for the Minister. First, will the Government finally respond to the GMC consultation and scrap the GMC’s five-year rule, which allows perpetrators of sexual misconduct to evade investigation after five years and continue working in the NHS? Secondly, will the Government create a specific and clearly signposted complaints system for complaints of a sexual nature, so that patients, visitors and staff can report allegations within health services and are able to identify which organisations they should approach in order to do so?
Thirdly, will the Minister make a statement about the handling of sexual abuse cases in the NHS and say whether any recommendations from the previous three inquiries and the PSA reports will be incorporated into the existing systems? Fourthly, will the Government mandate the NHS to create a specific NHS complaint code to register, collate and monitor data on sexual abuse and misconduct within health services, which can be made readily available for public and parliamentary scrutiny, and for local bodies that commission advocacy services for victims?
Finally, but most urgently, will the Minister set out what action she has taken or will take to make our hospitals a safe place for patients, visitors and staff, free from the sexual assaults, misconduct and rapes that are seemingly happening in our NHS every single day?
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
It is a pleasure to serve under your chairmanship, Dr Huq, and I thank the hon. Member for St Albans (Daisy Cooper) for securing this important debate. First and foremost, I want to express my utmost respect for the bravery and resilience shown by all those individuals, whether patients, staff or visitors, who come forward to report sexual safety concerns in the NHS. None of those incidents is acceptable, and I reassure hon. Members that we are taking this matter extremely seriously. We have been doing significant work in this space for a while, and sexual abuse is one of the key priorities in the women’s health strategy published last year. We believe sexual abuse and violence is a health issue.
The Secretary of State and I held a meeting a few weeks ago with health leaders from across the NHS to discuss how sexual misconduct, harassment and abuse in the NHS are being dealt with. We discussed the actions that the Government are taking in collaboration with the NHS to combat the problem. We expect every NHS trust to take action to ensure the safety of patients, staff and visitors on its premises.
I will come back to the data in more detail, but we know that victims and perpetrators can span a mix of patients, staff and visitors, and that the highest number of cases occur in mental health settings. We take that very seriously indeed. A rapid review is happening at the moment. It is looking at in-patient mental health settings and, specifically, sexual abuse and the data around it. We will respond to the review shortly.
Tackling sexual violence and abuse, and ensuring that all patients and staff who experience sexual violence and abuse are supported, are top priorities for NHS England. Domestic abuse and sexual violence are more likely to be disclosed to a healthcare professional than to any other professional, and often, some data that records sexual violence is not always about sexual violence that happens within the trust, but if a report is made to a healthcare professional—by a fellow member of staff, a visitor or a patient—it is reported through NHS data systems. That is not to say that abuse does not happen within the setting itself, but it does explain why the figures are sometimes significantly higher—healthcare professionals have a duty to report any complaints they receive.
Sexual safety covers a range of inappropriate sexual behaviours with different legal and operational definitions, including language of a sexualised nature, sexual harassment, sexual assault and rape, but every one of those is unacceptable.
The hon. Member asked what we are doing. We are taking action. We expect local NHS employers to be proactive in fully supporting staff and patients, and ensuring that their concerns are listened to and acted on. We encourage anyone who has been a victim to come forward and report that, in the knowledge that the report will be taken seriously. Every organisation within NHS England systems, whether community trusts, hospital trusts or any other setting, has robust systems in place not just for reporting allegations and concerns, but for following them up. All reports must be recorded, investigated and dealt with by NHS providers. That includes, where necessary, taking action against the perpetrator, but also involving the police.
While local leaders of NHS organisations have a statutory duty to look after their staff and patients, we are taking action in this space nationally. NHS England has expanded the remit and scale of the domestic abuse and sexual violence programme to co-ordinate work on sexual safety in healthcare settings, and it has recently appointed the first national clinical director, Dr Peter Aitken, to make our NHS safer, with a focus on areas such as data collection and reporting, prevention, and early intervention and support for those who have experienced sexual violence and abuse within the NHS.
Data is important, and data on sexual safety is being recorded. We can see that through the national reporting and learning system, which takes all the data from local datasets. Where local risk management systems from trusts around England are reporting in, that is fed through to the national reporting and learning system, so that we have oversight of the scale and types of problems that are being seen.
Building on commitments in the women’s health strategy, NHS England is collecting more consistent and granular information on patients who experience sexual violence and domestic abuse. The domestic abuse and sexual violence programme is consolidating NHS England’s data improvement actions into a single cross-cutting project. Data is important so that we know the type of incidents that are happening, where they are occurring and in which settings. It means we can quickly pick up any single perpetrator who may be acting in one or multiple trusts and can ensure safeguards are put in place as quickly as possible.
Data collection is not the only tool we have; this is also about reporting. The data is only as good as the information that is reported, and that is why we are encouraging people to come forward if they have been a victim or if they have witnessed an incident about which they have concerns. Unless we know about it happening, the action that can be taken to prevent incidents happening again is limited.
The hon. Member spoke about professional regulators. If staff, patients or visitors go to a trust and either feel that the complaint was not taken seriously or that action has not been forthcoming, there are also professional regulators. She talked about the GMC and I will come to the five-year issue in a moment. Professional regulators take action and have complaint systems in place that allow anyone to report a concern. We also have freedom to speak up guardians, particularly for staff. They can whistleblow if there are concerns about the culture or behaviour in a particular setting, so that staff can feed in concerns without having to go to their line manager or a member of their team. That will be treated confidentially.
We are committed to making it easier for patients to report historical concerns and are looking at modernising the GMC’s five-year rule. There was a consultation recently on regulating healthcare professionals. The Government responded to that in February and said they would take that forward, so there are plans to modernise the GMC’s five-year rule on complaints. I will happily update the hon. Member on timelines after the debate. The patient safety commissioner, who looks after patient safety across the board, is in post, and I am happy to discuss with her how we can co-ordinate responses from trusts and regulators so that they are joined up and so patients and staff feel their responses are not being passed from one organisation to another.
However, better data collection and good reporting is not enough on its own. We have to take action to stop sexual safety incidents happening in the first place. That is why NHS England has committed to a number of preventive actions, including creating a gold standard for policies, support and training relating to staff who experience sexual violence. That is being rolled out across ICBs, trusts and royal colleges, because it is important to create a culture where people feel safe to come forward and where, if their complaints are not taken seriously, they have someone else to go to who will listen to them and their complaints will be responded to.
In particular, in mental health settings, the NHS patient safety strategy is running a mental health safety improvement programme specifically focused on sexual safety. It is important to ensure that safeguards are in place to protect vulnerable patients who may not be able to say no but do not have the capacity to consent.
Where sexual incidents do occur in the NHS, the right support must be available. NHS England has commissioned 48 sexual assault referral centres across England, which are open 24/7. They provide medical, practical and emotional support to victims, whether their sexual assaults occurred outside the NHS, but they are reporting it to NHS practitioners, or the incidents occurred within the setting.
We have rightly focused on patients, but I want to make the point that the data shows that staff are the most common victims of sexual assault, so work is being done to support staff and to make their workplaces safer. We have a high number of patient-on-patient incidents, too, so it is not always staff-on-patient incidents. We absolutely need to take robust action against any staff who assault or commit sexual violence or abuse on any patient, but we also need to ensure that patient-on-patient abuse is identified as quickly as possible, that safeguards are in place and that our staff are protected from violence from patients or visitors.
In the short period of time that I have had, it has been difficult to go through all the initiatives we are putting in place to adequately and accurately record the scale of the problems. We want people to come forward and we want numbers to be recorded. We need to ensure that the reporting processes are in place and that action is taken at a national level, by each individual trust and by the healthcare regulators. Delivering on this agenda is a top priority and I cannot overstate my personal commitment to progress in this space. Again, I recognise the bravery of every patient and staff member who has witnessed or been the victim of sexual abuse. I am happy to keep Members updated on the progress we are making in this space over the coming weeks and months.
Question put and agreed to.
Dental Services: East of England
(11 months, 4 weeks ago)
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Mr Richard Bacon (South Norfolk) (Con)
I beg to move,
That this House has considered dental services in the East of England.
It is a pleasure to serve under your chairmanship, Sir Mark. I am particularly pleased to have the opportunity to introduce this debate on dental services in the east of England, as I have been applying to Mr Speaker for a debate on the subject for several months. I am sure that I am not alone among hon. Members in finding that the subject of access to a dentist is one of the largest in my constituency postbag and inbox. It has been the topic of numerous Back-Bench debates in recent times. I pay particular tribute to the efforts of my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for Bradford South (Judith Cummins), who have jointly sponsored a trio of debates in the last year or so, most recently on 27 April. My hon. Friend the Member for Broadland (Jerome Mayhew), who is also present, led an Adjournment debate on the need to establish a dental training college in East Anglia on 11 October last year. I will not say much more about that, but I ask the Minister to reconsider the Government’s position on it, because my hon. Friend made some very good points in that debate.
There have been many other interventions on many occasions by many hon. Members from both sides of the House. Indeed, another of my parliamentary neighbours, the hon. Member for Norwich South (Clive Lewis), secured question No. 1 in Prime Minister’s questions last week and asked about dentistry. He also managed to include a rather third-rate joke—something to do with rotten teeth and rotten Governments—but before he is tempted to repeat that, should he grace us with his presence, I point out to the House that I have a fourth-rate joke just for him. Colleagues may have noticed that the debate was scheduled to start, and indeed did start on time, at tooth-hurty pm.
Given the—[Laughter.] It got there eventually. That is Lincolnshire for you, Sir Mark. Given the enormous cost of dealing with the pandemic, and the inevitable financial consequences and constraints that it imposed, I think that the Government have done rather well, but that is not to say that they cannot do better. We all expect them to do better, as do our constituents. The Commons Health Committee has studied the reform of dental services and noted concerns that the Government have
“transferred financial risk from the NHS to dentists”,
adding:
“The fixed-term contract may make dentists reluctant to make long term investments in their practice.”
The Committee observed that the chief dental officer appeared in evidence to argue that if commissioners and dentists
“acted more flexibly and used common sense and good will the new arrangements would work”,
but it concluded that
“we see little evidence that this will happen.”
The Committee also reported that the total number of dentists working for the NHS and the activity that they have provided has fallen, and that the total number of patients seen by an NHS dentist has fallen by 900,000. The conclusion of the Health Committee was that the contract was
“failing to improve dental services measured by any of the criteria.”
If hon. Members find any of those conclusions eerily familiar, it would not surprise me, because they are from the Health Committee’s report in July 2008, when the Committee had a Labour majority and a Labour Chair, and there was a Labour Government. I hope that we can all agree that this is a long-standing problem that is not confined to any one Government or party.
There is widespread agreement that the dental contract introduced in 2006 lies at the root of many of the problems that we see today. The old item of service method that existed prior to the 2006 contract may have had some issues, but as one dentist said to me:
“It was a system that allowed you to be entrepreneurial”.
A dentist could set up a dental practice, put a sign outside and get on with it. Under the old NHS contract, dentists were paid for each item of treatment that they provided—an examination, a filling, a crown or a denture. Now they are paid per course of treatment, irrespective of how many items are provided, thus a course of treatment involving one filling attracts the same fee as one containing five fillings, a root treatment and an extraction. As the Duke of Norfolk is rumoured to have said about the rhythm method of contraception, there is only one problem: it “doesn’t bloody work”. We have had this problem since 2006. We have a contract that is, effectively, not fit for purpose.
In fairness, the problems go back beyond 2006. Indeed, my hon. Friend the Member for Waveney said in his last debate on the subject on 27 April:
“The fundamental causes of the collapse of NHS dentistry”
—I do not like saying that as a supporter of the Government, but I do not think the “collapse of NHS dentistry” is too extreme when we see what is happening; I hope that the Minister notes that—
“go back over 25 years with a gradual withdrawal of funding by successive Governments and the poorly thought-through 2006 NHS contract.”
My hon. Friend added:
“Covid was the final straw that brought the edifice crashing down.”—[Official Report, 27 April 2023; Vol. 731, c. 995.]
The problems in NHS dentistry have been so well canvassed in so many recent debates that I do not want to rehearse them again. I will, however, reprise one story from my constituency. The Manor House dental practice in Long Stratton in South Norfolk was run for many years by a respected and successful dentist called Dr Mark Ter-Berg, who, after many years of service, retired and sold his practice. After a period, the new managers of the practice got into financial difficulty and the business went under, owing money both to its corporate owners and the NHS. Dr Ter-Berg offered to come out of retirement and take over his old practice. He was quoted as saying in a local newspaper:
“You would have thought that”—
NHS England—
would have bitten my hand off”.
After months of making the offer and getting nowhere, I intervened on his behalf with NHS England, but it did not make much difference.
Dr Ter-Berg finally gave up waiting and decided instead to set up an entirely separate new dental practice in Long Stratton. I drove past it the other day, and there was a sign that read, “Open from 4 May”. I spoke to him yesterday and he is now very busy. He does not have an NHS dental contract; it is all private work and he is extremely busy—and Long Stratton is not by any means the most prosperous part of my constituency.
As Allison Pearson wrote on 10 August 2022 in The Daily Telegraph, which is not a notable bastion of left-wing journalism:
“I can’t think of a better example of a two-tier NHS than the one that currently exists in dentistry.”
Indeed, I understand that the providers of dental plans—for example, Practice Plan, which styles itself
“the UK’s leading provider of practice-branded dental membership plans to help you leave NHS dentistry or switch providers”—
are so busy that they are rushed off their feet.
Colleagues will have seen the British Dental Association briefing for this debate, which references a much-reported BBC investigation showing that no dental practice in Norfolk, Suffolk or Cambridge was taking on new adult NHS patients, and that this was also true of nearly all dental practices in Hertfordshire, Bedfordshire and Essex. At the end of March, Bupa announced that it will close many dental practices across the country; 85 practices were to be affected, with 38 set to close immediately. That includes two in Norfolk, with one in Harleston in my South Norfolk constituency—although I understand that Bupa is hoping to sell that practice to a new owner and that it will not close on 30 June as previously expected. The truth is that successive Governments have made NHS dentistry a place where dentists increasingly do not want to work. We need to focus on that, and we would all like to know what the Minister will do about it.
Let me say a word about money. The thing that struck me most in preparing for this debate was how little money the NHS spends on dentistry—indeed, how little is spent on dentistry at all compared with what it spends on other things. The figure is currently about £3.2 billion a year—that fluctuates a bit—and about 20% to 32% of that is actually paid through patient charges, paid by the patients themselves.
A recent National Audit Office study showed NHS spending rising from £123.7 billion in the financial year that ended in 2020 up to £151.8 billion—more or less £152 billion—at the end of the financial year that just finished. Further big rises are expected and planned—going up to £162.6 billion—by the end of the financial year 2025. Those are huge sums. In comparison, the annual cost of dentistry is tiny. I tend to compare anything under £3 billion with the NHS national programme for IT in the health service—one of the less successful parts of the last Labour Government. The Health Committee and the Public Accounts Committee studied that extensively at the time, and showed that the electronic patient record element, which cost £2.7 billion, had achieved basically nothing. The Public Accounts Committee’s report—this was its third report on the issue—from around August 2011 stated:
“The Department is unable to show what has been achieved for the £2.7 billion spent to date on care records systems.”
In other words, that nearly £3 billion achieved precisely nothing. I know that this is not quite comparable, being an annual number, but talk of a few hundred million or a couple of billion pounds means a few failed Government computer projects, in terms of the quantum. Compared with the £124 billion or £152 billion or £160-something billion that we are talking about, £2 billion or £3 billion here or there is of very little account.
I am sure that the Minister will refer to the fact that the Government are aware they need to reform NHS dentistry and that he is working on a plan. Some hon. Members might press him for a date on that plan, but I will not do that. I am much more concerned about ensuring that, when he gets the plan, it is right. I do not think it is any one Government’s responsibility that this has gone wrong. In fairness to the Labour Government of the mid-00s, in 2006, they were trying to correct what they thought was a big problem—that the item of service method led to a bill that was difficult to control. It was more akin to annually managed expenditure in the social security Department.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
My hon. Friend is making some very good points, and I congratulate him on securing the debate. He will recognise that there is a tension between payment by activity, which is not necessarily a desirable way to manage health—be that dental or physical health—and moving towards a more preventive model, which was the aim, if not the reality, of the changes to the 2006 contract and subsequent changes. What does he think about finding a way to lock in dentists to the NHS for maybe five years, post-graduation, to ensure that they pay back some of the training that cost the taxpayer many hundreds of thousands of pounds?
Mr Bacon
My hon. Friend makes several good points. We did payment by activity for acute hospitals, and we got a huge amount of activity in acute hospitals. Mental health was then the Cinderella service, with what little was left. Of course, there are tensions, and my hon. Friend, as a practising hospital doctor, will know that better than most. How that needle can be threaded to get the desired results has confronted Governments for many years.
On my hon. Friend’s specific point, having gone through medical school or dental school and come out the other end, junior doctors and, I am sure, junior dentists are at the moment struggling in the way that many others are—including young professionals—to afford anywhere to live. We have hundreds of thousands of acres of public land, including Ministry of Defence land, NHS land, railway land and church land, which has a quasi-public flavour to it. Norfolk County Council alone owns 16,000 acres of land. I would say to these people, “Come and work for the NHS for a few years full time. Commit yourselves completely to this, and we will help you design, build and rent from us at a decent rent. And then, depending on the calibrated loyalty package, which I am sure we can easily work out, you will get the chance in future to buy the house that you have designed for yourself.”
To go back to the point that my hon. Friend the Member for Broadland has made, getting people to stay in a particular area has proved difficult, not least because we do not have a dental training college. However, this is also about people understanding that the area they are going to work in is particularly attractive. That is true of much of the east of England, except people do not realise it because not enough of them, certainly in dentistry, are educated there. There is a huge opportunity for the Government to get this right, and I am more concerned about ensuring that the plan that comes from the Minister in the next few weeks or months is correct.
The fear I have is the potential downside. My constituent who, before Christmas, booked an appointment for her children for 9 May but found out recently that it was cancelled in a text message from the Harleston Bupa practice—she has been phoning to find out what is going on—will not care or know about the interstices of the 2006 dental contract, which was perhaps well intentioned but is deeply flawed and has led to many of the problems we are grappling with. She will just care that she cannot get an appointment.
Although the Opposition have not been particularly fleet of foot in recent years, even they can see that this will become a very salient issue at the next general election. We have our five points: halving inflation, growing the economy, reducing the national debt, cutting NHS waiting times and stopping the boats. Those are fine, but they are not a programme for Government. We need to do those things to restore confidence after the events of last autumn and—it might be best if I quote Mark Twain—to try and draw a veil and hope that not too many people remember them. However, the fact is that we need a better programme for the election, and I am sure we will have one.
The hon. Member for Denton and Reddish (Andrew Gwynne) will be sitting there with his chums, thinking, “What are our five points going to be?” If we do not get this right—mark my words, Sir Mark—the Opposition parties will say, “They have had 13 years to talk about it. It started with the 2006 dental contract, but they have had long enough and have not yet sorted it.” It will then become one of their five points. We are talking about such piffling sums of money compared with the overall cost of the NHS that it is simply incomprehensible that we would not deal with this properly.
The issue of dental care has been of growing concern to our constituents for many years, and the concern has only grown as successive Governments have failed to grapple with the issues properly. On present trends, it will continue to get worse—much worse—unless the Government make a decisive step change and match that decision with the right resources in the right places within a contractual framework that incentivises the right behaviour. That is what the Government need to do.
Sir Mark Hendrick (in the Chair)
I remind Members that they should bob if they wish to be called in the debate. I call Andrew Selous.
Andrew Selous (South West Bedfordshire) (Con)
I congratulate my colleague and good friend, my hon. Friend the Member for South Norfolk (Mr Bacon), on an excellent and passionate speech. I agreed with every word that he said.
I, too, am a veteran of these debates. I dusted off the speech that I made on this subject—probably in this very chair—on 10 February 2022, and things are not better, so I am back, as we all are. It is the duty of Back-Bench Members of Parliament to speak out on behalf of constituents. In February 2022, I had been told a month or two before by NHS England that of the 47 dental practices in my constituency, six were taking NHS patients, but I do not think that was accurate because it was not the experience of my constituents. When NHS England told me that it had done a search on dentists available to take NHS patients in my constituency, I do not think that it had knocked on doors and gone in and asked them. I think it had sat and looked at what an out-of-date website said, and that is not good enough. For a public service that matters, it should not look at an out-of-date website and give Members of Parliament inaccurate information.
The situation is still not better. If we look at the figures from the House of Commons Library briefing on the percentage of children who have seen a dentist, just before the pandemic in September 2019, it was not high enough—it was 58.5%, so just under six out of 10 children saw a dentist every year. The pandemic has a lot to answer for in a lot of areas of our national life, and the latest figures that we have from the Library show that in June 2022, the figure for children seeing a dentist in the last year had declined from 58.5%, which was not high enough anyway, to 46.2%. Less than half of the children in England see a dentist every year, yet we know how important it is for them to do so. Children go to hospital to have teeth taken out, and so on, but regular trips to the dentist, proper prevention and proper brushing could prevent that.
The situation is no better for adults. We have similar figures for adults going to see a dentist in the last two years; I am not sure why it is two years for adults and one for children. In September 2019, just before the pandemic, 49.5% of adults had been to see a dentist in the past two years. That has crashed down and, as at June 2022, is now barely more than a third at 36.9%. Just over a third of adults in England go to see a dentist every two years.
Serious work clearly must be done, because oral health matters. It matters for young children, as I have said, far too many of whom turn up in hospital having to have teeth taken out. It is important that we teach children to brush their teeth well, and we all need to be reminded of that. A Radio 4 programme that I was listening to the other day reminded us that we should not rinse the toothpaste out of our mouth but should only spit it out. You might think that is rather piffling, Sir Mark, but if it helps the nation’s teeth to be a bit healthier by leaving the fluoride on our teeth, it is actually quite important information. There is a job to be done of educating the whole nation about how to look after our teeth properly.
I am passionate about dental care for older people as well. With busy adult social care staff, it can get forgotten, and in nursing homes and care homes it has not always been given the priority that it needs. I had a debate in the main Chamber a while ago on this subject and domiciliary care. The care needs to be there, because poor oral health can contribute to a whole host of other problems and can make them worse. For example, someone might have a low-level bacterial infection in their mouth because they do not have good dental hygiene. We need to get this right.
I was very taken with the suggestion from my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) about NHS dental students giving some time to the NHS. I think five years was suggested. I am conscious that, unlike when I went to university, there are grants and that students leave with quite a lot of student debt, but there is something we could and should do there. If someone is training to be a doctor or a dentist, they receive a large amount of taxpayers’ money, and taxpayers can reasonably ask what they are getting back in public service. Whether we could do something on the amount of debt they have, or vary or pause the interest rate, if they gave those five years to the NHS, that would be worth looking at, and having a greater supply of dentists would make a significant difference.
I come back again to say that the situation is not as I would want it to be. I want my constituents to be able to see a dentist easily. I spoke to the Minister before the debate, and I know the Government are earnestly working on the subject and will come up with a plan in the next few months. I have particular confidence in this Minister—sparing his blushes—because he has been incredibly helpful to me on general practice provision in my constituency. He is an outstanding Minister: highly intelligent, does the detail, delivers and asks the questions that need to be asked. I have hope and confidence in him, but I say to him today, as all hon. Friends do, that this is urgent and it matters. Please deliver—deliver properly and deliver quickly.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve with you in the Chair, Sir Mark. I congratulate my hon. Friend and neighbour the Member for South Norfolk (Mr Bacon) on securing and leading the debate. That said—some faint praise there—it is easier for an MP to secure a debate on NHS dentistry in this place than it is for one of our constituents to actually see an NHS dentist.
As we know, the east of England is the most arid region in the country. That is certainly the case with rainfall and probably also with NHS dentistry. As we have heard, it has been the No. 1 item in many of our inboxes over the past two years. There are no signs of that abating, though, from what the Minister has said, I get the sense that the first steps are being taken to provide an improved service. There is much work to do and I await the Government’s plan for NHS dentistry. I am very much aware of the hard work that my hon. Friend has been carrying out and I hope he will be able to provide a publication date when he responds. I want to highlight what I believe should be included in the NHS dentistry plan, with a slight slant towards the east of England.
The first item is, of course, that NHS dentistry requires fair funding. The British Dental Association has estimated that we would need £1.5 billion a year to restore budgets to their 2010 level. I recognise that that will not be achieved overnight, but there does need to be a meaningful start.
I want to highlight two further points on funding. As I understand it, the annual budget for NHS dentistry is of the order of £3 billion; just over 10% of that is due to be clawed back because it has not been spent. I do not know whether the Minister has given an assurance elsewhere, but that money must remain ringfenced for NHS dentistry. The fact that there is money not being spent shows that the whole system is broken. We saw that at the beginning of January 2022, when the Government announced £50 billion of funding for what was described as a dentistry treatment blitz; only 30% of that was spent. There is a lot of work to do on the funding side.
I turn to funding issues from the east of England perspective. The British Dental Association carried out some work before the pandemic that showed that spending on NHS dentistry in England lags way behind that in Scotland, Wales and Northern Ireland. Homing in on what is happening in England, some recent research commissioned by the University of East Anglia and carried out by Health Economics Consulting very much showed that the east of England is the poor relation compared with the rest of the England.
The research showed that, for 2018-19, in the midlands, spending on NHS dentistry was £78 gross expenditure per head. In the north-west, it was £75; in the north-east and Yorkshire, £70; in London, £69; in the south-east and south-west, £69. The east of England is the tail-end Charlie, at £39 per head. There are a great many steps that we need to be taking to address that particular inequality.
My second point is about contract reform. The 2006 contract is discredited, and needs to be replaced. From what I can gather from what the Government and the BDA say, we have moved beyond what I would describe as the “talks about talks” phase of negotiations, and they are in meaningful discussions. This must not just be a tinkering with the contract—it must be a complete root-and-branch reform.
Some of the ingredients we need for a new contract include a clear break with the units of dental activity system of funding; and we must discard the straitjacket on how many patients NHS dentists can see. If they do not see enough, they get fined; if they see too many, they have to pay for it. We must also ensure that more complex and lengthy treatments are properly rewarded and that NHS dentists are not discouraged and penalised for performing them; we must prioritise prevention; and, particularly from the east of England’s perspective, somehow we must find a way of motivating NHS dentists to come and work in rural and coastal areas.
My third point is about recruitment and retention. Another plan that we are awaiting is the Government’s workforce plan for the NHS and the care sector, and dentistry must feature extremely prominently in that plan. In the short term, we need to recruit more dentists from overseas. We have a situation in the Lowestoft area—actually, it is in Beccles, where there is an NHS dental contract with a group called the Dental Design Studio. That group has been trying for some months to recruit three dentists from overseas. I think they are moving forward, but progress on the overseas registration examination, as carried out by the General Dental Council, is fairly slow. I have liaised with the Minister on the issue in the past and there is a backlog of applicants that needs to be addressed as quickly as possible.
Moving on from that, we need to train our own dentistry practitioners, which means hygienists and support staff as well as dentists. With that in mind, the University of Suffolk has set up a community interest company with the objective of carrying out both treatment and training, with the creation of hubs. The initiative is up and running, but it needs additional funding so that it can be rolled out further across the region. I ask the Minister to do all he can to provide that funding.
In the longer term, there is the issue of a dentistry school; we do not have one in the east of England. Both the University of Suffolk and the University of East Anglia have thrown their hats into the ring. What the Government need to do is just to assess strategically which regions need dentistry schools, but I believe there is a very big vacuum in the east of England. UEA and the University of Suffolk probably need to get together to come forward and put one case, rather than competing with each other.
My fourth point is about prevention. As we have mentioned, the new NHS dental contract must have an emphasis on prevention and the NHS needs to work closely with local councils in promoting better public health. I will quickly highlight fluoridisation. It is not a particular issue in the east of England, but I remember that in one of the many debates that we have had on NHS dentistry in this very Chamber, my hon. Friend the Member for Mole Valley (Sir Paul Beresford), who is a practising dentist, highlighted the situation in Birmingham, where he, as a dentist, can tell which part of the city someone comes from by looking at their teeth, because he knows whether the water is fluoridated in that particular area. Fluoridisation is a compelling issue that needs to be addressed.
Let me also highlight children’s dental health. Two years ago in Lowestoft, an organisation called Lowestoft Rising got together with some local councillors and bought toothbrushes and toothpaste for the under-sevens. It was an extremely successful project and very quickly parents were coming back and saying, “Can we have more?” Unfortunately, more was not available, but it was suggested to me that we should perhaps consider zero-rating toothbrushes and toothpaste for under-sevens. Longer term, we need to look at that very closely.
My final point is about accountability and transparency. There needs to be improved accountability and transparency with NHS dentistry. We have made a significant step forward with the transfer of procurement from NHS England to the new integrated care boards. In the Norfolk and Waveney area, that happened from 1 April, and it is important that dentistry is properly represented on those ICBs. Judging from the feedback that we have had from the Norfolk and Waveney ICB, it is very much getting to work on the problem. It is producing a one-year plan for short-term interventions and next March it will look to produce its long-term dental strategy. From my perspective, I can cite one major improvement. If I have a complaint about NHS dentistry, I can now go to the local NHS commissioners, who I go to on other issues and who give me very good, quick and proactive responses.
To conclude, in geographical terms East Anglia is probably the largest dental desert in the UK, and we need, metaphorically at least, to bring in the irrigators and sink the boreholes with immediate effect. There has been some preparatory work that will enable us to improve the situation, but we need the Government NHS dentistry plan as soon as possible. The plan will cover the whole of the UK, but it must also address the specific problems in the east of England—our historical poor funding, the challenge in recruiting and retaining dentists in our region, and the lack of training facilities. I look forward to the Minister’s response. He impressed me with the way he went about this task, but the plan that he produces needs to be ambitious, visionary and innovative, not just a sticking plaster.
Jerome Mayhew (Broadland) (Con)
One of the unifying features of the speeches today is that we have heard them all before. Not only have we all heard it before, but we have all said it before, so I will try—I may fail—not to do that. However, I do have to highlight some elements of the problem, which has been ably covered by my hon. Friend the Member for Waveney (Peter Aldous).
Access to NHS dentistry in Norfolk, which is the worst in the east of England, was surveyed in 2020 to 2021, and of the 150 sub-regions of the country, Norfolk came 147th. As I said to the Minister in a previous speech, we have to follow the money. As my hon. Friend the Member for Waveney pointed out, the best areas spend nearly £80 per mouth per year on dentistry; in the east of England, the figure is £39—a full 50% less. Does the Minister have an explanation for that? I genuinely struggle to understand how spending on NHS dentistry in the east of England is so far below that in the rest of the country. It seems to be without explanation.
More locally still, in Broadland the lack of dentists of any description is profound. I was lucky enough to persuade the Department to advertise a new contract for NHS dentistry in Fakenham last year. The money was available and the contract was advertised; not a single organisation applied for the contract, and it is still vacant. In Sheringham, in the constituency of my hon. Friend the Member for North Norfolk (Duncan Baker), who is unable to speak in this debate, there is a dental practice that is owned by an organisation that has an equivalent practice in London. The organisation has been advertising consistently for a new private dentist in Sheringham for 10 years, and it has yet to fill the role, whereas during the same time multiple positions in its London practice have been advertised and filled. It is therefore not just a regional issue; geography really matters.
I am sorry to say that just last week the latest in long and ignoble line of announcements came when Brundall Dental Practice, which is an NHS practice, contacted patients to say that it would no longer be accepting adult NHS patients from 1 September this year. People are being asked to move on to monthly subscriptions for dental care, which are between £150 and £400 a year. I struggle to know what to say to the many constituents who have contacted me, because not a single NHS practice in the county of Norfolk is currently accepting new patients under an NHS contract. The £11 a month is only for check-ups and hygienists; it is not for dental care, which is an extra charge.
People might say that many can afford to pay for dentistry if they have to, but we have to also consider those who are excluded from paying dental charges because of their financial circumstances. What are we asking of those constituents? Where are they to turn not a single provider in the county of Norfolk is accepting NHS dentistry? The answer, of course, is that they will go to the Norfolk and Norwich University Hospital when their dental problems become acute, and we merely transfer the problem from the dentistry budget to the NHS and acute budget. The problem will be so much worse, and so much harder and more expensive to treat, because we are not nipping things in the bud but dealing with acute emergencies. That cannot be the right answer.
The reason I do not want to prolong the agony of discussing the problem is that I know that the Minister gets it. If he was not educated before, he has certainly been educated on numerous occasions, either here or in the main Chamber, by many of the Members present—the problem has already been fed back. Government Members have great confidence in the Minister and in his grip, grasp and focus on the issue. We know that a dentistry plan is imminent—the sooner that it is published, the better, and more power to the Minister’s elbow—but there are a number of suggestions I hope will find their way into the plan.
In the short term, we need additional improvements to the current dentistry contract—other Members have spoken eloquently about that, and I would highlight it as being very important. As regards the medium term, we have had reference to centres for dental development. The University of Suffolk has progressed far in its application, and there is a necessity for a similar venture at the University of East Anglia, or at least similar work in Norwich. However, in the long term, we simply have to train more dentists. We have to open the market to allow people to access a lucrative and fulfilling career that is currently not being explored in the east of Anglia and in Norfolk, in particular.
We need to train people in the east of England. The University of East Anglia has put forward proposals for a dental school. The medical school it founded in Norwich about 10 years ago knows definitively, from surveying all its graduates each year, that about 40% go on to take their first job locally. The single act of setting up a dental school in Norwich, linked to the Quadram Institute and the research work at the Norwich Research Park on the human microbiome, is the long-term solution.
I hope the medical plan will look beyond the national numbers. I was told by the NHS that roughly the right number of dentists are being trained each year, but I dispute that. It has been seven years since it surveyed what those dentists are up to. It has no idea whether the dentists notionally on its books have retired, gone abroad, are working in the NHS, are working part-time in the NHS, are working privately, or none of the above.
Andrew Selous
My hon. Friend is making a powerful point about the link between where people train and where they work. I would gently make the point to the Minister that the east of England is quite a large area. Norfolk and Suffolk are deeply wonderful places, with which I have a great affiliation, but they are quite a long way from Bedfordshire, which is also in the east of England. If we were to think that it was job done because we had trained dentists in Norwich or wherever, I would want to know what that meant for the good people of Leighton Buzzard, Dunstable, Houghton Regis and the surrounding villages. I put that marker in the Minister’s mind.
Jerome Mayhew
That is fair enough. However, if someone grows up in the east of England, whether in Norfolk, Suffolk or even Bedfordshire, there are only two places where they can train: Birmingham and London. There is no other place in the entire east of England where they can train, so is it surprising that we have a dearth of dentists? Is it surprising, particularly in rural areas, that we do not attract dentists who are newly qualified and therefore likely to be in their early to mid-20s? Do they wish to relocate in large numbers at that stage to a rural location? Many do not, so we need to bring the beauties of East Anglia, including Bedfordshire, to trainees so that we can benefit from the stickiness of tertiary education and location.
Finally, my hon. Friend the Member for Waveney raised the issue of fluoridation, which I wish to develop. There is no fluoridation in Norfolk at the moment, and perhaps it shows. The data suggests that the level of decay across the teeth of Norfolk is not universal but is substantially located towards west Norfolk and King’s Lynn. All sorts of factors may account for that, but areas of higher dental decay correlate with those that have reduced natural levels of fluoridation in the water, with the lowest levels around King’s Lynn. I raise that as an issue that I hope the plan will address.
Matt Warman (Boston and Skegness) (Con)
I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing the debate. Although my constituents use the facilities of the east of England, I welcome his hospitality in the debate as well. This is a shared issue, especially for many in the southern part of my constituency.
I wanted to speak today because, as we have heard from many other hon. Members, this is not just a top issue, but the top issue, in the postbag and particularly on social media. We all feel the immense frustration of our constituents on this important issue. In Lincolnshire, nearly a quarter of five-year-olds are suspected to have tooth decay. Last year, a dozen Boston children had teeth removed. The problems we have heard about in the east of England are present in my part of the world too, and the burden of that partly falls on the services provided in the east of England, which is why it is relevant for me to speak today. These are real problems.
I asked my office to do what I called a secret shopping exercise because, like my hon. Friend the Member for South West Bedfordshire (Andrew Selous), I did not trust the data NHS England had provided. On that secret shopping exercise, we see that just a single NHS practice is offering access to new patients and, even then, only to children. There are huge problems with local provision. When I spoke to the ICB, which has recently taken on the responsibility, it said that there are particularly acute issues in coastal and rural areas and, as we have heard, that there are no silver bullets. However, it raised a few issues, which I will use to augment previous speakers’ excellent contributions.
First, there is the enormous backlog in the General Dental Council exams. I gather that 1,700 people are seeking to take the part 1 exam and that the GDC website does not even say when it plans to put another one on. When it does, it is likely to put just 150 people through it. I know that the GDC is an independent body, but will the Minister do all he can—I know he is already doing so—to encourage the GDC to pull its finger out?
Secondly, on the issue of having a dental school in the east of England, there is a medical school in Lincoln; if it were to train dentists, that would benefit the broader area. As we have heard, there is a clear need for many more dentists to be trained across the country, so perhaps we could do something for East Anglia and see benefits for the whole region from having Lincoln-trained dentists.
Thirdly, the issue of fluoridation affects my constituents as well. I do not think anyone, except those on the outer edges of the internet, could possibly argue against fluoridation, and we should encourage it as quickly as possible. On the outer edges of the internet, I give way to my hon. Friend the Member for Broadland (Jerome Mayhew).
Jerome Mayhew
I try not to inhabit that area. Does my hon. Friend not think that it is surprising that only 10% of the country’s drinking water is fluoridated?
Matt Warman
It is a surprising number. As I am sure my hon. Friend knows, the water companies have raised issues that are legitimate to some extent, but the overall public good from increasing that number is obvious and would pay real dividends relatively quickly. It would be public money well spent.
Peter Aldous
In this place, fluoridation is recognised, but the feedback I get from water companies is that conspiracy theories on the internet cause them concern. Does my hon. Friend agree that there is a need for the Government to lead a public awareness campaign on the benefits of fluoridation to dispel these urban myths?
Matt Warman
I was the Minister responsible for 5G during covid, and we all remember that, apparently, 5G caused covid—I should be very clear that it did not. However, there is a clear dilemma for the Government as to how much they engage with genuinely fringe conspiracy theories and risk giving them a degree of salience and credibility that they simply do not deserve. I encourage the Minister and his colleagues in the Department for Environment, Food and Rural Affairs simply to get on with it and engage, where necessary, with people who are genuinely worried. However, we sometimes have to acknowledge that the extremities of the internet are not a place where rational debate can always be had, be it on 5G and covid or on fluoridation and tooth decay.
I will make two other points before I end my jaunt to the east of the England. The first is that I know the Minister is looking—as we do with GPs and the NHS more broadly—at what work can be done by people who are not fully qualified dentists to help the nation’s oral health. Along with the expansion of people who have trained abroad, I think that would be welcome and could make a difference, but it is not a silver bullet either.
My final point is that, although my secret shopping exercise was valuable and instructive, it is a huge sign of failure, because the data about which dentists are accepting patients should be freely and easily available so that constituents can easily see which practices are offering help. Given the structure of NHS dentistry, we will always have some dentists with open lists and some with closed lists, even in a healthy system. Easy access to that information would benefit our constituents and NHS England.
I know that the Secretary of State is a huge fan of data and is making such information as open and as easily available as possible, and I hope it can form part of the eagerly anticipated dentistry plan, which is coming “soon”—I think that is the current Government parlance. In a world where the autumn runs into February, I would hope that “soon” is well before the summer. I know it will make a difference in the medium term, but the biggest frustration for all our constituents is the fact that there is no silver bullet.
I hope the dentistry plan includes, for instance, the experimental ways of employing dentists that some trusts are using up and down the country, because that will provide some of the interim measures that I hope will come before the opening of the three dental schools that we have secured in this debate alone. Those will make a huge difference, but it takes time to train dentists, and constituents need solutions as quickly as possible. In pursuing that, we will save people from turning up at A&Es and emergency dental appointments, which will come as a consequence of failing to deliver the basic services I know the Minister is keen to offer as quickly as possible.
Andrew Gwynne (Denton and Reddish) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Sir Mark. I commend the hon. Member for South Norfolk (Mr Bacon) for securing this important debate and for setting out some really important points not just for the people of the east of the England—although it has been impressed on me in the course of the debate that there is a specific issue that is pertinent to that area—but for the whole of England, because dentistry is nowhere near where we would want it to be in any part of the country, notwithstanding the differences in regional funding and access that we have heard about.
We have had a really good, thorough debate, and there has been consensus across the Chamber on the state of NHS dentistry. I thank the hon. Members for South Norfolk, for South West Bedfordshire (Andrew Selous), for Broadland (Jerome Mayhew), for Waveney (Peter Aldous) and for Boston and Skegness (Matt Warman) for the veritable tour of the east of England and south Lincolnshire that I have been sent on. I am well aware that south Lincolnshire is not in the east of England, although it is close to it and uses lots of public services within it. That is not least because my wife is from Bourne, in Lincolnshire, so I know how the area connects into Cambridgeshire and beyond.
I want to mention the hon. Member for North Norfolk (Duncan Baker), because he will have constituency issues that he would have dearly loved to raise in the debate. Having been a parliamentary private secretary myself, I know that they must be seen and not heard—it is one of the curses of the job. The great part of the job is getting to work with wonderful Ministers and being able to lobby them behind the scenes on all these issues. The downside is that constituents do not see the benefit of their MP most of the time. In addition, I thought the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made some really important interventions.
It has been said already that we have been here before. I recently participated on behalf of the shadow health and social care team in a Backbench Business debate, which the hon. Member for South Norfolk co-sponsored. I spoke about people having to remove their own teeth, patients waiting over three years to access dental care, and individuals becoming addicted to painkillers because they cannot get treatment. I could go on and on with examples, but they all point to a simple fact: NHS dentistry is in crisis and is not working for the people who need to access treatment now. We have all heard from constituents at a loss about what to do, who are waiting day in, day out in utter agony and crying out for action on NHS dentistry.
As the hon. Member for South Norfolk made clear, the problem is particularly acute in the east of England. In 2022 no dentists were registering new patients in the whole of Suffolk, Norfolk or Cambridgeshire. In Norfolk, and indeed Waveney, there are only 38 NHS dentists per 100,000 people. It is little wonder that we hear stories of DIY tooth extraction, of Norwich hospital treating more people than ever before for opiate addiction and, in some parts of Norfolk, of 40% of under-fives suffering from dental decay.
We cannot go on like this—nationally, across England or in the east of England. Over the last decade, net spend on dental practices in England has been cut by over a third, with 2,000 NHS dentists quitting in 2021 alone. It is not just about this Government; there have been issues for a long period of time, and those have been compounded over a long period of time.
The hon. Member for South Norfolk and others mentioned the 2006 dental contract. As I pointed out in the Chamber in the Backbench Business debate, there was consensus on the effects of the 2006 contract by the 2010 general election.
The last Labour Government recognised that the dental contract needed reforming and pledged to do so in their election manifesto of 2010. So too did the Conservative party in its election manifesto in 2010. It would be remiss of me not to make this point, as the hon. Gentleman indicated I would: you guys have had 13 years to fix that dental contract. It is of deep frustration that in a decade and three years, that has not happened.
I have said this before: there was not a golden era of NHS dentistry before the 2006 contract. The hon. Member for South Norfolk mentioned that before 2006, dentists were paid for each treatment. That worked in the interests of dentists, but not always in the interests of patients. I have also said this before: there is a reason why my mouth is full of metal—crowns and fillings—and it is not because I ate more sweets than my children did or because I brushed my teeth less well. It is because dentists were incentivised to maximise the amount of work they did because that is how they got paid—drill and fill—and that was not always in the interests of public health or the patient.
It was not a bad thing that the Labour Government sought to make changes to bring NHS dentistry more in line with private dentistry, where the emphasis was on prevention rather than on drilling and filling, but it did not work—I make no bones about it. That contract needed to be reformed.
In a similar vein, there is still no sight of the NHS workforce plan—I say that at every opportunity when I face this Minister or others in his Department. We know it currently resides on the Secretary of State’s desk, despite the fact that 90% of dental practices with a high NHS commitment still find it difficult to recruit a dentist, so the key question to the Minister is: what does he plan to do to address the crisis in dental care across England? How do the Government plan to tackle the dental deserts that are causing misery to millions of people, particularly in the east of England? I would also appreciate an update on why the Government are yet to publish the workforce plan in full and when we can expect its release.
It is also important that the Minister recognises the extreme health inequalities that are widening to record levels. Children living in the poorest parts of England are around three and a half times more likely to have rotten teeth removed than those in more affluent areas. That problem is set to get much worse, with families unable to access basic oral hygiene products because of the cost of living crisis. I was very interested to hear of the project in the constituency of the hon. Member for Waveney. Such projects can make a big difference for a small amount of cash at a very local level.
What steps is the Minister planning to take to address the growing inequalities, and what assessment has he made of the continued impact of the cost of living crisis on families who are unable to access oral hygiene products? Labour Members have been clear since 2010 that tackling the crisis in dentistry has to be an absolute priority for any incoming Government, and I include the possibility of an incoming Labour Government. We have a big job of work to do across the whole NHS.
I understand the predicament that the current Government are in, but the previous Labour Government brought waiting lists down across the NHS from 18 months to 18 weeks, and we will do the same again. We want to secure the future of NHS dentistry, and we would provide the staff, equipment and modern technology needed to ensure patients get the care they deserve.
The hon. Member for South Norfolk was absolutely right: if the Government do not move on this territory, the Labour party is there. We have set out how we will pay for the next generation of doctors, nurses, healthcare workers and dentists, with our workforce investment paid for by abolishing the non-dom tax status. We can begin to chip away at the dreadful oral health inequalities that we see across England. We will train 5,000 new health visitors who work closely with families to promote and prevent ill health. We already know that health visitors have the potential to improve dental attendance and oral health in the families who are least likely to engage with dental services—a role that cannot be overlooked.
People in the east of England and across the nation deserve much better NHS dental services than they are getting. Slowly but surely, we are seeing the creation of the two-tier system that the hon. Member for South Norfolk set out in his opening remarks, where those who are able to pay are receiving essential care, and those who are not are languishing in utter agony, unable to find an NHS dentist. The next Labour Government stand ready and waiting to act to rebuild NHS dentistry. Until then, I urge this Government to get to work. Too many people are suffering, and the current state of crisis must not be allowed to become the new normal.
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O'Brien)
I start by thanking my hon. Friend the Member for South Norfolk (Mr Bacon) for securing this important debate. It was reminder of what a brilliant speaker he is. Dentistry is the number one issue that I am working on; I have had two meetings on it already today. It is something that we are working on at pace. I know there are challenges accessing dentistry across the country, and recently there have been particular issues in my hon. Friend’s constituency. We are committed to tackling those issues, not only in the east of England but right across the country.
My hon. Friends are quite right about the scale of the challenges, which are particularly acute in the east of England. Colleagues who are here today, and others from the east of England, are first in my mind when I think about those who are contributing ideas to our forthcoming dentistry plan. My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) talked about how we get students to do more for NHS dentistry. My hon. Friend the Member for South West Bedfordshire (Andrew Selous) talked about how we must encourage preventative work, particularly for children—I completely agree with him.
My hon. Friend the Member for Waveney (Peter Aldous) talked about the challenge of under-delivery, the need to have proper rewards for complex types of treatment and how we incentivise dentists to move to areas such as the east of England. Those are all things that we are working on. My hon. Friend the Member for Broadland (Jerome Mayhew) talked about the unjustified variations in coverage and investment around the country, frozen in time by the 2006 contract. He also talked about the imbalances in training in different parts of the country. I was glad to hear various hon. Friends and Members talk about the importance of fluoridation. Across last year, we legislated to enable that to make progress for the first time since the 1960s.
My hon. Friend the Member for Boston and Skegness (Matt Warman) talked about how we must bust the backlog at the GDC. I met the GDC again yesterday to work on that. He also talked about the importance of accountability and greater transparency. Again, that is something that we are working on now. It would be remiss of me not to mention my hon. Friend the Member for North Norfolk (Duncan Baker), although the rules of this place do not allow him to speak in this debate. Hon. Friends from the east of England will not be surprised to hear that he, as the son of a dentist, is playing a leading role in pressing us forward to move even more quickly on dentistry.
My hon. Friend the Member for South Norfolk talked about fundamental reforms of the NHS dental contract. He is correct that we need to go further, but we have started to reform the contract for the first time since 2006, with the package of changes that we brought in last July. Those are an important first step in addressing some of the challenges facing the sector. We know, of course, that we need to go further. Those initial reforms have been received well by the profession and are starting to have a positive impact.
We created more UDA bands to better reflect the fair cost of work and incentivise NHS work. We introduced the first ever minimum UDA value to help to sustain practices where UDA vales are particularly low—the east of England is a good example of a place where that is the case. We allowed dentists to deliver 110% of their UDAs for the first time, to encourage more activity from those who want to do more. We made it a requirement for dentists to keep their availability for NHS patients up to date on the NHS website, which is an issue that a number of hon. Members have mentioned.
We also started the process of making it easier for dentists to come to work in the UK, and last month there came into force legislation that enables the General Dental Council to increase the capacity of the overseas registration exam, as hon. Friends have argued for in this debate. As some people have mentioned already, plans for a centre for dental development in Ipswich are advancing, and further plans are emerging elsewhere, including in Norfolk. We are also doing longer-term preventive work on expanding fluoridation; changing the law last year was part of that, and we also secured funding to expand fluoridation first across the north-east, subject to consultation later this year.
The reforms to split band 2 have been welcomed by the profession, as has the introduction of the 110% option. I am pleased to say that the proportion of the new band 2Bs is increasing and dentists are using the new flexibilities we introduced to prioritise those with higher needs. In terms of delivery, the number of patients seen in the year to March is up by nearly a fifth on a year earlier, but we must go further, and the changes we have made are just the start—I am under absolutely no illusion that there are significant challenges to address. The reforms that I have talked about and the forthcoming dental plan will draw on the ideas that hon. Members have put forward in this debate and offline. They will build on those initial banding changes and improve the payment model; ensure that we continue to improve access, particularly for new patients; look at how we address historical UDA variations; and look to make NHS work more attractive to ensure that NHS dentists are incentivised to deliver more NHS care.
The delegation, or devolution, of dentistry from NHS regions to ICBs, which various hon. Members have pointed out, is an improvement. It provides an opportunity for much closer integration with other local care services and much more accountability and transparency. People can much more easily go to see the person responsible for delivery in their area, and our dentistry plan will build on that.
I thank my hon. Friend the Member for South Norfolk for securing this important debate. I hope he is reassured that we have started to reform NHS dentistry and to improve services not just in the east of England, but in all areas. We will continue to build on those reforms in our plan for dentistry, on which we are working at pace.
Mr Richard Bacon
I enjoyed listening to the remarks of every contributor, including my parliamentary neighbour, my hon. Friend the Member for Waveney (Peter Aldous). I was going to say “the Member for Aldous”—going around my constituency, one finds quite a lot of Aldouses; I have not yet established whether they are all related, but if one scrapes under a stone in East Anglia one quickly comes across an Aldous. He gave us a tour d’horizon—a tremendous summary of the expertise that he has gathered over the last few years. Together with the hon. Member for Bradford South (Judith Cummins), he has led the way in drawing the issue to the attention of other hon. Members. I pay tribute to him for that, and I am deeply in his debt, because reading his speeches was a great way to read my way into the subject—one that I was drawn to not because of any expertise, but because of my constituency postbag. We have heard that the same is true for all hon. Members.
Opinion pollsters are sometimes behind the curve on what is a salient issue, but hon. Members on both sides of the House know that this is the top issue facing us. My plea to the Minister is not to go so fast that he gets it wrong, but to bide his time and ensure that he has taken everything into account. He should talk to his Secretary of State, my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay)—an east of England MP who has the same problems in his constituency postbag—and come up with an answer that is attractive and provides lasting change. That is what we want to see.
My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), another of my parliamentary neighbours, raised the interesting point of how we encourage people who have had money spent on them by the NHS to stay in the NHS, even if they are paying fees themselves, as my hon. Friend the Member for South West Bedfordshire (Andrew Selous) said. I would be open to a wide variety of methods for doing that, including forgiveness of part of or perhaps all student loans. We need to make radical changes.
My hon. Friend the Member for Broadland (Jerome Mayhew) quoted a startling statistic: £80 per head is spent on dentistry in the areas that have the best dental care, and only £39 in parts of the east of England. What annoys me more than anything else is that, outside London and the south-east, the east of England is the fastest growing area of the country. It contributes the most gross value added to the economy outside London and the south-east. That is an argument that MPs in Norfolk and elsewhere in the east of England have been making for many years. We have been saying for years, “Give us the infrastructure, give us the broadband, give us the rail connectivity and give us the mobile telephony that actually works, without the need to go 100 yards down the road, stand on one leg and hope there is an “r” in the month to get a mobile telephone signal. Then we will provide the economic growth.”
Going back to the Prime Minister’s points, I seem to remember that one of them is about economic growth. Here we are contributing so much to the economy and yet not getting our fair share back, when the opportunity in the east of England is unrivalled in the UK. A golden triangle could exist between the economic heat, innovation and intellectual firepower of Cambridge; the Norwich Research Park in my constituency, where scientists look at world-leading advances in genomics and plant science; and technology in Ipswich at the BT labs at Martlesham. That golden triangle represents an extraordinary opportunity for the whole United Kingdom.
I was recently at the Cambridgeshire Development Forum, where I heard people talking about east-west rail and comparing themselves with Boston and Silicon Valley, but saying that they do not have enough room to grow. I say to my hon. Friend the Member for Boston and Skegness (Matt Warman) that that is, of course, Boston in America. The obvious answer is, “You have got loads of room to grow. You have got the whole of the east of England.” To an investor from Dubai or Shanghai, it all looks like Cambridge. We have a huge opportunity, but we need not only the infrastructure but the world’s best medical and dental services.
Andrew Selous
In an uncharacteristic slip and momentary lapse of memory, my hon. Friend forgot to mention the world-leading research in Cranfield, which I am sure he was going to add to his golden triangle of opportunities in the east of England. I am sure that that slipped his mind accidentally.
Mr Richard Bacon
It might make it more of a pentagram, but I did mean to mention Cranfield, of course. My hon. Friend knows that in South Norfolk we speak of little else. I do not want to take up too much time, although we are slightly ahead.
My hon. Friend the Member for Boston and Skegness said that he is not technically in the east of England. I had a mad great-great aunt who lived in Brigg in Lincolnshire, and Lincolnshire has always been in the east of England, as far as I am concerned. He is very welcome at this debate, and I had a great interest in what he said. However, if it is true that the wilder fringes of the internet have got worse in recent years, and if my hon. Friend was responsible for 5G, to whom should we attribute the extra growth in the wilder fringes of the internet, if not to him? I only pose the question.
The hon. Member for Denton and Reddish (Andrew Gwynne) surprised me. I remember when he was shadow Secretary of State for the Ministry of Housing, Communities and Local Government portfolio. He mostly appeared at the Dispatch Box like an angry avenging angel. The fact that he is capable of sounding rather rational and sensible was a surprise to me. I am afraid he also confirmed my worst fears—
Sir Mark Hendrick (in the Chair)
Order. Can we confine ourselves to the issue of dental services, please?
Mr Richard Bacon
As the hon. Member for Denton and Reddish said, dentistry definitely needs to be improved. He has confirmed my worst fear, which is that if the Minister does not focus on this sufficiently, the hon. Member and the Opposition will. They will produce a solution which—whether it is delivered or not—too many people will find attractive, I fear.
Fortunately, we have in the Minister someone in whom several colleagues have reposed confidence, and have said so publicly. On one occasion, when we were both on holiday, I bumped into the Minister in a second-hand book shop in Hay-on-Wye. I know he is a cerebral fellow who thinks carefully about these issues, and I take seriously the assurances I have had from colleagues that he is looking at this extremely closely.
I say one thing to him in conclusion, and this is the acid test. If he produces a dental plan that can be delivered speedily, and if he negotiates successfully not just with his Secretary of State and east of England MPs, but with the Treasury, to produce the resources required to do that, he will quickly give our constituents reassurance that NHS dental provision can be a place where dentists want to work, thrive and have successful careers. If he can do that, he will make a significant contribution to our success at the next general election. Not to put any pressure on him, but I believe that getting this right—reflecting on what I said about the issue being such a salient one—puts on his shoulders the enormous burden of getting the right answer so that our constituents have dental provision that works.
Question put and agreed to.
Resolved,
That this House has considered dental services in the East of England.
Farmers, Supermarkets and Food Supply Chains
(11 months, 4 weeks ago)
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Sir Mark Hendrick (in the Chair)
I will call Gordon Henderson to move the motion and I will then call the Minister to respond. Unfortunately, as is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
I beg to move,
That this House has considered farmers, supermarkets and food supply chains.
It is a pleasure to serve under your chairmanship, Sir Mark. I start by paying tribute to farmers, in particular those in my constituency, for their contribution to food security in the United Kingdom.
Food security is becoming increasingly problematic. A combination of unprecedented events has culminated in many farmers facing unsustainable pressures on their businesses, which could have long-term implications for our domestic food production capacity and food security if measures to support British farmers are not taken immediately.
The huge spikes and uncertainty in energy prices since the end of 2021 have had significant cost implications for primary producers. Annual inflation measures are now understating the cost pressures facing businesses and consumers, given that inflation has been apparent for over a year. According to data from the Department for Environment, Food and Rural Affairs itself, compared to the 2019 average, farm input cost inflation stands at 42%, with wholesale energy prices being one and a half times higher.
The UK is seeing a significant decline in production, as horticulture businesses struggle with unprecedented inflation, most notably in energy and labour costs. There are also seasonal shortages of business-critical workers, particularly in the horticulture sector. In the first half of 2022 alone, at least £22 million-worth of fruit and vegetables was wasted, directly because of such gaps in the workforce.
Two of the National Farmers Union’s key asks for the horticulture sector are for a minimum five-year rolling scheme for seasonal workers and the inclusion of horticulture in the energy and trade intensive industries scheme, to help to remove uncertainty and inject confidence in production.
Declining self-sufficiency, coupled with supply chain problems abroad, has resulted in empty supermarket shelves, and the more that we become reliant on imports, the more likely it is that we will see the level of market failure that has led to images of empty shelves across the UK.
In the national food strategy, the Government outlined their ambition to sustainably expand the national production of fruit, vegetables, plants and flowers. British farmers and growers are ready to meet this challenge. However, to achieve that, the Government’s growth agenda must be twinned with reform in the marketplace that levels up the balance of power in the agrifood supply chain and delivers a fair and functioning supply chain.
Robin Millar (Aberconwy) (Con)
My hon. Friend has just said something very helpful: British farmers stand ready. My farmers in Aberconwy have made the point that they are ready to step forward. However, does he agree that supermarkets have a duty to support farmers, and that they should not put undue cost pressures on farmers? Farmers need to be there tomorrow in order to deliver tomorrow, and there is a role for supermarkets in promoting farming, not just for their own interests but so that it is there tomorrow.
Gordon Henderson
I can only assume that my hon. Friend has been reading my speech, because if he is patient he will find that I will come on to that point.
British growers want to deliver on the Government’s vision for climate-friendly and sustainable land management, but there is a significant risk to our shared endeavour if we do not address market risks in parallel. Only profitable businesses can be sustainable and continue to invest in productivity and environmental outcomes. It is critical that retailers support British farmers and growers to be sustainable, achieve meaningful environmental gains, and invest in innovation and new technology. Food producers should have an equal stake in the value chain, with food processors and retailers sharing risk, data on performance and value gain.
Farm costs are a significant driver of food price inflation. According to the results of the 2022-23 NFU farmer confidence survey, farmers’ primary concern over the next 12 months is input prices, with 88% expecting negative effects. Data released by DEFRA in March shows that agricultural inputs have risen almost 42% since 2019. Inputs closely related to energy have seen the biggest inflation: energy and lubricants are up 58%. Although wholesale energy prices are falling, they remain one and a half times higher than normal. Fertilisers and soil improvers are up 161%, and animal feeds are up 50%. That is directly linked to the disruption caused by the war in Ukraine.
In recent months, the pressures in the horticulture supply chain have led to supermarkets rationing fresh fruit and vegetables. Soaring energy costs and the continued lack of people to pick crops pose a serious threat to the future of the UK’s fruit and vegetables industry. As a result, the industry is not able to mitigate the current supply chain shortages.
A report by Promar International in 2022 found that growers’ production costs increased by as much as 27% in the preceding 12 months, and that products such as tomatoes, broccoli, apples and root vegetables were most affected. The main drivers are energy, fertiliser and workforce costs. Farmers and growers across many sectors are doing what they can to mitigate rising costs, but they cannot be expected to absorb the additional pressure and risk in the supply chain alone.
Ben Lake (Ceredigion) (PC)
I am grateful to the hon. Gentleman for making such an important speech on what I consider to be a matter of strategic importance to the UK. He is right to point out that farmers and growers cannot continue to absorb the input cost increases. Does he share my concern about the fact that, according to the latest NFU survey, 40% of beef farmers and 36% of lamb farmers have already said that they expect to reduce production in the light of the rising input costs?
Gordon Henderson
I certainly agree with the hon. Gentleman, and it is not just livestock. In the garden of England—Kent—too many of our orchards have been dug up because they are not profitable any more. There is a growing lack of transparency in the communication received from retailers, in particular, and that leaves farmers in a vulnerable position. They have to absorb additional risk and are unable to plan and make important financial decisions during this extremely challenging period. If farmers and growers are unable to recoup costs, it will become unfeasible for them to run their businesses, resulting in a reduction in production. Ultimately, that will reduce competition.
I have spoken to a number of farmers in Kent, and I can cite examples of unfair practices by some retailers—particularly supermarkets. However, to do so would make it possible for those farmers to be identified, which they do not want for fear of losing business. That in itself is testament to the malign power of some supermarkets.
It is true that the groceries supply code of practice and the Groceries Code Adjudicator have had a transformative impact on the behaviour of buying teams and have helped to curb some of the worst abuses of market power. That is why I share the NFU’s view that any consideration of transferring the GCA’s functions to another public body, such as the Competition and Markets Authority, or removing it altogether, is misguided; that would have a hugely damaging impact on the groceries sector and, ultimately, consumers.
In my view, the farming industry is in crisis. In 2019, there were 149,000 registered agricultural businesses. In 2022, there were 142,000. That means that there are more than 7,000 fewer agricultural businesses today than in 2019.
Richard Foord (Tiverton and Honiton) (LD)
In the south-west of England, direct payments fell from 95% of total income from farming in 2016 to just 62% in 2021. Does the hon. Gentleman share my view that that is affecting not only regions such as Kent, but the south-west? Both have seen a dramatic reduction in total income from farming as a result.
Gordon Henderson
I do agree. We are all in this together. That is the old saying, and it is true. Farmers across the UK—not just in England or Wales—are struggling. Without sustained, consistent and responsible action from all parts of the supply chain, we risk deepening a crisis that will lead to a significant contraction in supply to the marketplace and reduced availability of British produce, ultimately leaving many farmers and growers with no other option than to leave the sector altogether, which is what is happening.
To create a fair supply chain that supports food security, the sector needs to ensure sustainable farm-gate prices. In all farming sectors, DEFRA lacks the data it needs to monitor the market sufficiently and ensure that it is working properly. Without better data, the Government are unaware of what is happening in the marketplace and are therefore in no position to assess the market effectively, as required by section 20 of the Agriculture Act 2020. The Government need to support and invest in sufficient market infrastructure to enable markets to work efficiently, equitably and in the interest of food security. DEFRA needs capacity and expertise to conduct investigations of actual and potential market issues, and farmers need a concerted joining up of policy across Whitehall to unlock growth in the sector.
Finally, I want to explain what the NFU would like the Government to do. I appreciate that the Minister probably knows, but, given the current crisis in farming, the wish list bears repeating. The NFU wants the Government to produce an enhanced, policy-focused food security report that looks beyond food supply and supermarket shelves to assess the short, medium and long-term health of the food sector. The report should be published annually, as opposed to the three-year commitment in the Agriculture Act.
The NFU wants the Government to use section 20 of the Agriculture Act to conduct an urgent value chain inquiry into market failure in the poultry, meat, eggs and horticulture sectors, and to use powers under section 29 of the Act to continue progress with the dairy contracts code, develop equivalent approaches for other sectors and ensure that all are fit for purpose before legislation is introduced.
The NFU wants the Government to cement the role of the Groceries Code Adjudicator and publicly set out their commitment to its independence and powers. The NFU also wants the Government to publicly commit to supporting the work of the Food and Drink Sector Council and deliver a clear mandate for Departments to support its ambitions for sustainable growth.
The NFU wants the Government to establish a regular food forum with the DEFRA Secretary and senior executives, to support business engagement across the food sector—a similar concept to the Prime Minister’s Business Connect platform. The NFU wants the Government to set out their plans to invest in agricultural technology and innovation centres that bring benefits to UK farming, for example by taking the opportunity created by the Genetic Technology (Precision Breeding) Act 2023.
The NFU wants the Government to ensure that food and farm businesses make a growing contribution to renewable energy generation and have affordable access to transmission infrastructure, improving the sector’s energy resilience and lowering greenhouse gas emissions from food. Finally, the NFU wants the Government to make changes to the planning system to permit development for the purposes of growing and processing fruit, veg, crops and livestock.
I thank Kent’s farmers and the NFU for feeding our nation. I assure them that they will always have my full support.
The Minister for Food, Farming and Fisheries (Mark Spencer)
It is a pleasure to serve under your chairmanship, Sir Mark. I thank my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) for securing this important debate. I draw attention to my entry in the Register of Members’ Financial Interests, which is a matter of public record.
Food is part of our local and national identity, and farming is vital to our country. The food and drink industry contributes £30 billion to our economy and employs over 4 million people. As the Secretary of State has said, we want to support our farmers and fishermen to grow their businesses and to help our rural communities grow and thrive. I have just returned from the Prime Minister’s UK Farm to Fork summit in No. 10, which brought together the Government and the whole food supply chain. It was a great opportunity to boost co-operation and promote all elements of our world-renowned farming and food industries.
I recognise that this has been a challenging year for farmers and consumers alike. Russia’s illegal war in Ukraine, aftershocks from the pandemic and a historic outbreak of avian flu are having a global impact. That is why we are supporting our farmers by reinvesting £2.4 billion per year into the sector through new farming schemes, and by paying direct payments in England in two instalments—the next one is due in July—to help farmers with their cash flow.
Responding quickly to global challenges, we continue to provide support through the energy bills discount scheme, and we have announced 45,000 visas for seasonal workers in the horticulture sector next year, to give security to those in the sector so that they can plan their business for the next 12 months.
Helen Morgan (North Shropshire) (LD)
It has been widely reported by farmers in North Shropshire, particularly dairy farmers, that although their input prices are astronomically high, for all the reasons the Minister has mentioned, they are being squeezed by supermarkets and their milk prices are starting to come down. Does the Minister welcome the announcement by the CMA this morning that it is going to look into price gouging by supermarkets, which the Liberal Democrats have called for over the last few weeks?
Mark Spencer
We will look with interest at what the CMA finds. That is something we have looked at closely ourselves. It will require food producers and farmers to come forward with evidence to support the CMA, but that is why we launched our own investigation into the dairy sector. We are due to come back any moment with our findings and recommendations for how to support dairy farmers.
We have also indicated that we are going to support the pork sector and ensure that contracts are fit for purpose. Once we have delivered on that, we will be keen to look at the horticulture sector and the egg sector to ensure that the marketplace is working fairly for all in the industry. That demonstrates how seriously the Government take these challenges and issues. We will step in when we feel the market is not working equitably for all involved.
Last June, we published the Government food strategy, in which we set out our vision for a prosperous agrifood sector that ensures secure food supply in an unpredictable world and contributes to the levelling-up agenda through good-quality jobs all around the country. In the last year, farmers have continued to put great-quality food on our plates. The UK Farm to Fork summit is the next step in growing the thriving food and drink sector, with the aim of seeing more British produce on supermarket shelves in the UK and around the world. The summit focused on how Government and industry can work together to bring great British food to the world, build resilience and transparency across the supply chain, strengthen sustainability and productivity, and support innovation and skills—many of the things that my hon. Friend the Member for Sittingbourne and Sheppey called for.
The Prime Minister has been clear that growing the economy is one of his top priorities, and growing the food and farming sector is key to that.
Gordon Henderson
Does the Minister accept that farmers will only be able to help grow the produce if they are making a profit? Does he also accept that farmers are frustrated at retailers that too often force farm-gate prices down so that supermarkets can maintain their margins in the shops? We have to address that.
Mark Spencer
I understand my hon. Friend’s statement. It is right that we have a sharing of risk and responsibility in the supply chain and that primary producers get a fair price for their products. We also have to bear in mind that our consumers and constituents want to enjoy reasonable food prices. We do not want to drive food price inflation through the market, so it is important that we co-operate and work with retailers and those who manufacture in the food sector.
My hon. Friend referred to the Groceries Code Adjudicator and hoped that we would commit to keeping that as a separate authority. I can tell him that the Prime Minister announced this morning that we will keep the Groceries Code Adjudicator as a separate authority and it will not become part of the CMA, which I think is an indication of how important the sector is and that it requires its own Groceries Code Adjudicator.
Farmers should be paid a fair price for their produce. We have introduced new powers through the Agriculture Act 2020 to support the sector. We have made great progress in our reviews of the pig and dairy supply chains. We have recognised the impact of global events on the sectors in recent months, and the next reviews will take place in the egg and horticulture sectors, as I have already mentioned.
We can confirm, as I have said, that the proposed merger of the GCA will not go ahead. My Department has championed precision breeding, as my hon. Friend the Member for Sittingbourne and Sheppey indicated, through the Genetic Technology (Precision Breeding) Act 2023. Building on the successful passage of the Act, we will convene a working group to bring plant breeders, food manufacturers and retailers together to agree an approach that enables precision-bred products to reach the shelves as soon as possible.
We will also improve future support for horticulture by replacing the retained EU fruit and vegetable producer organisation scheme when it closes in 2026 with an expanded offer, which will include controlled environment horticulture as part of our new farming
schemes. We will help the controlled environment horticulture sector overcome barriers to accessing future support and make it easier to build new glasshouses through changes to national planning policy.
Robin Millar
I welcome the support that the Minister is outlining, including that farmers should be paid a fair price. Right now in Aberconwy, upland farmers are being told that their land is no good and that it would be put to better use if planted with trees to help the environment. They are being told that meat is not a good part of the diet and that they should not raise livestock. Does he agree that meat does form part of a balanced diet, that raising livestock is among the best of upland farming practices, and that supermarkets have a role to play in talking about that because they occupy a privileged position right next to the customer?
Mark Spencer
I hesitate slightly because agriculture is a devolved issue, so it would probably be better for my hon. Friend to lobby the Welsh Government, although I acknowledge what he says. The beautiful landscapes on Dartmoor, Exmoor and the North York Moors are created by the sheep that graze those uplands. We as consumers can play our role in eating the view, as it were. The view that we see is directly related to the food that we consume. If we want to eat beautiful, top-quality Welsh lamb, we must do our bit to support beautiful, rolling landscapes such as the Brecon Beacons—I call it the Brecon Beacons because I have no idea how to pronounce the name that it is now called.
Recent global events facing growers and the wider food sector underline the importance of working together at every stage of the food system, from farming to manufacturing, distribution and retail. Following productive conversations at the summit, I am pleased to say that food security is still at the heart of the Government’s farming agenda. Fulfilling the Prime Minister’s priority on economic growth, we will continue working with the industry to champion UK food and drink at home and abroad, helping more businesses to invest in domestic production and innovation.
I am grateful for hon. Members’ contributions to this important debate. It has been a stimulating debate and I am grateful for the support, comments and questions. Together we will support our great British farmers.
Question put and agreed to.
Corporate Profit and Inflation
(11 months, 4 weeks ago)
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Richard Burgon (Leeds East) (Lab)
I beg to move,
That this House has considered levels of corporate profit and inflation.
It is a pleasure to serve under your chairship, Sir Mark. I secured this debate because the discourse on inflation in Parliament, in Government and in the Bank of England has been dominated by the need to curb workers’ wages. Government policy has focused on driving down workers’ real wages. In the words of the Bank of England’s chief economist, people should just
“accept that they’re worse off”.
That approach has ignored the elephant in the room—the role that corporations are now playing in driving up inflation through price hikes designed to boost their profits. There is mounting evidence that such corporate profiteering is playing a very significant role in the latest wave of inflation. It has been called many things: price gouging, profiteering and, most commonly, greedflation. The US Senate Committee on the Budget has held a special hearing on this subject, but there has been very little focus on it in Parliament so far. Today, that situation changes. I believe that this is the first specific debate on greedflation in this House. It should not be the last one. Indeed, I hope that this debate kicks off a serious discussion in this House about how we tackle greedflation.
Of course, higher inflation since late 2021 has been affected by big problems in supply chains, as a result of post-covid trade disruption and the war in Ukraine. However, two excellent studies have highlighted how soaring profits are now having a big impact. The Institute for Public Policy Research and Common Wealth think-tanks have shown that profits were up 34% at the end of 2021 compared with pre-pandemic levels and that nearly all of that increase in profits was due to just 25 companies. As the IPPR has recently said:
“It’s time for policymakers to look at ‘greedflation’ and prioritise reining in corporate profits, instead of blaming workers’ wages for driving up inflation.”
Using the latest available figures for the largest 350 companies on the London stock exchange, Unite the union has shown how profit margins for the first half of 2022 were nearly double—89% higher—than for the same period in 2019, before the pandemic. Unite’s report finds that in the last six months company profits are responsible for almost 60% of inflation. As its general secretary, Sharon Graham, correctly states:
“Make no mistake, profiteering has resulted in the high prices we’ve all had to pay”.
I pay tribute to those organisations for bringing attention to this issue. For example, Unite the union has secured press coverage for its recent study. However, I fear that the Government, in their reply, will simply dismiss these studies as coming from left-of-centre organisations and will plough on regardless. Therefore, I want to use the next part of my speech to focus on how this issue goes well beyond the centre-left and is now a mainstream debate. The financial press, investor bodies and central bank officials are openly discussing how corporate profits are, in fact, driving inflation. It seems that it is just the Government who are ignoring this issue.
Let us look at some of the recent headlines in the financial press. One Financial Times headline said:
“‘Greedflation’: profit-boosting mark-ups attract an inevitable backlash.”
A Wall Street Journal headline said:
“Why Is Inflation So Sticky? It Could Be Corporate Profits.”
That article went on to explain:
“Businesses are using a rare opportunity to boost their profit margins.”
MoneyWeek, the UK’s best-selling financial magazine, had a piece entitled:
“What should we do about greedflation?”,
which noted:
“Companies’ price hikes have been driving inflation.”
Fortune said:
“‘Greedflation’ is the European Central Bank’s latest headache amid fears it’s the key culprit for price hikes”.
Meanwhile, an Investors Chronicle headline said:
“‘Greedflation’ is only making things worse”,
adding:
“Business using inflation as cover for unjustifiable price hikes are on borrowed time”.
Likewise, economists and investment strategists are openly saying that corporate profits are driving price hikes.
Kim Johnson (Liverpool, Riverside) (Lab)
I thank my hon. Friend for raising the issue of corporate greed. The spotlight has been shone today on the crisis of unaffordable baby formula, with parents forced to steal or settle for black market alternatives, putting the health of their babies at risk. Given that the revenue in the baby food segment of the UK food market is set to increase by £265 million, or nearly 15%, over the next four years, will my hon. Friend join me in calling on the Minister to put an end to the scandalous profiteering that takes money directly out of desperate parents’ pockets and into shareholder profits, fostering a public health crisis whose repercussions we will suffer for decades to come?
Richard Burgon
As ever, my hon. Friend makes the point about what is really happening out there. She gives a powerful example about baby food. I will come on to food and a policy suggestion for price caps later.
The chief economist of UBS global wealth management, Paul Donovan, has stated that
“much of the current inflation is driven by profit expansion. Typically one would expect about 15% of inflation to come from margin expansion, but the number today is probably around 50%.”
Albert Edwards, the global strategist at Société Générale, one of the largest financial services groups in Europe, tweeted:
“More Greedflation? When are government going to force a halt to this price gouging?”
Elsewhere, he explained how companies have
“under the cover of recent crises, pushed margins higher”.
In more technical language, but saying the same thing, Goldman Sachs economists said of the eurozone:
“Unit profit growth now accounts for more than half of GDP deflator growth, with compensation per employee growth explaining a little over a third.”
Central bankers are also raising concerns. In fact, the European Central Bank’s Fabio Panetta said that
“there could be an increase in inflation due to increasing profits.”
He has also said that
“unit profits contributed to more than half of domestic price pressures in the last quarter of 2022”.
Meanwhile, Lael Brainard, formerly of the Federal Reserve and now a White House official, said:
“Reductions in markups could also make an important contribution to reduced pricing pressures.”
Margaret Greenwood (Wirral West) (Lab)
I congratulate my hon. Friend on securing this debate and his excellent speech. He is reframing the whole debate, which is incredibly important.
According to the Office for National Statistics, during the 12 months to March the price of food and non-alcoholic drinks rose at its fastest rate in more than 45 years. Cheese was up 44% and the average price of bread and cereals increased by 19.4%. My hon. Friend is discussing what the economists are talking about now: greedonomics. Does he agree that that will chime with people out there in the shops, trying to feed their families? We all have casework involving people who simply cannot afford to put the food that their children need on the table.
Richard Burgon
As always, my hon. Friend makes an important point. I will come on to that in the remaining passages of my speech, because people out there are really feeling in their day-to-day lives the consequences of this greedflation and the opportunistic pushing up of prices by so many companies.
In the United States, an Economic Policy Institute study found:
“Corporate profits have contributed disproportionately to inflation”,
and that
“over half of this increase…can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal.”
Let us take a moment to note that a broad range of officials at UBS, Unite the union, Goldman Sachs, the ECB and the US Economic Policy Institute are all suggesting that over half of the current price mark-up is to do with profiteering.
Nadia Whittome (Nottingham East) (Lab)
My hon. Friend is making some excellent points. Is he aware of comments made last month by the International Monetary Fund’s chief economist, Pierre-Olivier Gourinchas? He said that he remains “unconvinced” that we should be worried about the risk of a wage-price spiral, highlighting that wage inflation continues to lag far behind price inflation, while profit margins have “surged”. Does my hon. Friend agree that the Government should be exploring all avenues to boost wages, including a £15 an hour minimum wage, above inflation public sector pay rises and, of course, scrapping anti-union laws?
Richard Burgon
I have to say—and this will come as no surprise—that I agree with my hon. Friend’s three policy demands. A £15 an hour minimum wage is more necessary now than ever before. When people first started talking about it, we of course supported it then. Fewer and fewer people can argue against that policy now. Of course, the anti-trade union laws need scrapping. It is wrong to suggest that it is workers’ wages that have been driving inflation. I hope this debate gets people in this place talking about what a lot of economists, who are certainly not on the left, have been talking about—namely, greedflation.
I will move on to some solutions. While workers’ real wages continue to fall, the Financial Times recently noted that across western economies, profit margins reached record highs during 2022 and remain historically high. It is increasingly clear that some corporations are hiking prices to gain those profits, and it is that, not wages, that is a major cause of the inflation crisis. What should be done about that? In the words of Robert Reich, the prominent economist and former US Secretary of Labor under Bill Clinton:
“To control inflation, we must take aim at corporate profits, not working people.”
I have three proposals. First, there should be an excess profits tax. The kind of tax we have seen on the super-profits of oil and gas firms should now be extended to all the other sectors of the economy making excess profits from this crisis at the expense of ordinary people. That would send a clear message to those companies that their profiteering must stop. There has rightly been a huge focus on the eye-watering profits of energy firms, though the Government’s windfall tax has failed to deal with that properly and should be amended to close all the loopholes.
Excess profits are in evidence in other sectors, too. The five big banks have reported soaring profits, as they take advantage of high interest rates. Supermarkets, food manufacturers and agribusinesses have benefited from profit spikes recently. The Treasury should set up a special unit for this excess profits tax that could go after all those companies that are blatantly profiteering, ripping off customers, fuelling inflation and deepening the cost of living crisis.
Margaret Greenwood
My hon. Friend is being very generous in giving way. Does he agree that it adds insult to injury that so many of these companies are not paying decent wages to their staff? On the one hand, they are making massive profits, essentially ripping off consumers, and on the other they are not paying the rates they should to the people who actually do the work.
Richard Burgon
That is absolutely right. It is scandalous when workers are not fairly paid, the public are being ripped off, and all this profiteering is causing the price crisis that we see. It is not for nothing that people call it greedflation.
On price caps, for all its obvious flaws in not being set low enough, the Government’s energy price guarantee, which was introduced last year, was an important break with the idea that the Government cannot interfere in market pricing to protect people. Surely such price caps should be extended to other sectors. It is very welcome that London Mayor Sadiq Khan has called for powers to allow him to impose private rent controls in London. Other countries do this, so why can we not do so here? On soaring food prices, the French Government have secured a deal with some of the country’s major retailers to place a price cap on staple foods to ease the pressure of inflation on consumers. Why not here?
Ian Lavery (Wansbeck) (Lab)
Is it not absolutely perverse that in the fifth richest economy in the world we are seeing, on the one hand, supermarkets and retailers making billions and billions of pounds and, on the other, parents criminalising themselves by stealing baby formula because they cannot afford to feed their newborns? What on earth has gone wrong in this country?
Richard Burgon
That is exactly right. That state of affairs is completely perverse in one of the richest countries on earth.
I mentioned that the French Government have secured a deal to place a price cap on staple foods to ease the pressure of inflation on consumers. Why can we not do that here? The public backs it. A poll last year showed that 71% of voters support price caps that place limits on what companies can charge for certain goods and services such as energy, housing and other essentials, including food. That 71% even included the overwhelming majority of Conservative party voters.
My final point is about the need for public ownership. Returning energy, rail, water and other key utilities to public ownership, to be run for people and not profit, is the best way of ensuring a permanent end to the profiteering that so many of these privatised companies are gratuitously engaged in. I hope the Minister will respond by admitting what all the leading economists and financial institutions say about greedflation, and I hope that today’s debate is the start of the Government listening and Parliament talking more about the fact it is greedflation, not workers’ wages, that drives inflation. Corporate giants are taking advantage in the most heartless way, using this crisis as an excuse to hike up the prices of essentials. As ever, it is ordinary people who pay the price.
Several hon. Members rose—
Sir Mark Hendrick (in the Chair)
Order. I remind Members that they should bob if they wish to be called in the debate. I can see at least four people bobbing.
Kate Hollern (Blackburn) (Lab)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate. In the short time available, I will echo many of the excellent points set out in my hon. Friend’s opening remarks.
The false narrative being perpetuated by the Government that wages are driving up inflation is misrepresentative of the reality facing many of my constituents in Blackburn. The Government have argued that workers should accept pay restraints to manage inflation, but substantial research suggests that corporate profiteering and so-called greedflation, not wage levels, are fuelling the inflation crisis. There is a clear disparity between the Government’s narrative and reality. Only today we learned that shareholders of the failed TransPennine Express received a £15 million bonanza last year, while people in the north-west could not get a train.
A report into profiteering by Unite the union in March revealed that the 2021 profit margins of the FTSE 350 jumped 73%. For the first half of 2022, they were 89% higher than the same period in 2019. Meanwhile, working people cannot afford to heat their homes or feed their families.
The huge recent profits of major oil and gas companies are well known. Leaked Treasury forecasts—they should not be leaked; they should be public knowledge—stated that producers and electricity generators could make excess profits of up to £170 billion over two years, yet time and again we hear the Government say we cannot afford many basic services. Meanwhile, 16.6% of households in Blackburn are living in fuel poverty. That is higher than the national average of 13.2% and the regional average of 14.4%. A proper windfall tax, which Labour would introduce, is urgently needed to address this. The Government’s actions do not go far enough, and it is disappointing that no Conservative Members are present to hear the shocking statistics that have been repeated today.
We have talked about food poverty. Only today, when faced with a question about the fact that the cost of making a cheese sandwich at home has risen by 37%, we heard an ex-Conservative MP respond by saying, “If you cannot afford a cheese sandwich, don’t make one.” That is so out of touch with the reality of how families are struggling to feed their children. It is disgraceful.
The Trussell Trust’s annual statistics paint a dark picture. In 2022-23, almost 350,000 food parcels were delivered in the north-west. That is up significantly from approximately 200,000 in 2017-18. The most recent survey carried out by the Bakers, Food and Allied Workers Union found a shocking increase in food insecurity among members. It reported an increase in food bank usage from 7% to 17%, while those who reported relying on friends and family went from 20% to 34%. Some 55% said they have skipped meals to feed their children. The survey points to a clear disparity between supermarket profits and the experience of those working and shopping at supermarkets.
Profits have clearly not been reflected in workers’ wages. While for many the pandemic was a time of extreme anxiety and, in some cases, tragic loss, the Resolution Foundation estimates that the top 10% each gained £50,000 during the pandemic. Similarly, new analyses by economists at the Institute for Public Policy Research and the Common Wealth think-tank show that the profits of the largest non-financial companies were up 34% at the end of 2021 compared with pre-pandemic levels, rising significantly faster than inflation and wage growth, so companies are getting richer and people are getting poorer. The problem is systemic and must be addressed at a policy level, with windfall and wealth taxes to ensure that those with the broadest shoulders pay their fair share.
Zarah Sultana (Coventry South) (Lab)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate and giving us an opportunity to shine a light on the lie that it is workers’ wages that are driving inflation, rather than the profiteering of big business. The truth is this is not just a cost of living crisis. There is no doubt that it is a crisis for the working class and for millions of people struggling to make ends meet across the country, but it is not a crisis for big businesses and the super-rich. For them, it is record profits, a record number of billionaires and record wealth for the top 1%. It is a cost of living crisis for the many, but a bonanza for the few.
An investigation by Unite the union found that the profit margins for FTSE 350 companies rocketed by 73% between 2019 and 2021 and were up an even more staggering 89% in the first half of 2022. From the well-known, obscenely high windfall profits of the oil and gas giants BP and Shell to the supermarket chains Tesco, Sainsbury’s and Asda, which saw a 97% increase in profits between 2019 and 2021, big businesses have seen their profits soar, but that is just one side of the coin.
On the other side are soaring prices for our constituents: energy bills through the roof, roughly doubling in 12 months; food prices up nearly 20%; rent inflation at eye-watering record levels; and mortgage payments continuing to rise. It is no wonder that living standards are set for the biggest fall since the 1950s, with the real value of wages falling at the fastest rate on record.
Let me be clear: wages have been lagging well below price rises, so they cannot be their fundamental cause. This is not wage-price inflation. It is something else, and that something else is greed inflation—inflation driven not by workers’ wages but by corporate greed. Big businesses are exploiting droughts and wars, post-pandemic demand and supply-side shocks from climate breakdown. That is, in effect, what even the likes of the International Monetary Fund and the European Central Bank have said. They both asked whether wages were driving higher prices, and both found that explanation wanting. Instead, the ECB found that profits contributed to two thirds of the rise in inflation in 2022 alone, having been responsible for just one third in the previous two decades.
The next time we hear policymakers call for pay restraint or see Tory Ministers hit out at greedy workers for fighting for pay restoration, let us ask: why do they not call for profit restraint? Why do they not condemn chief executive officers for taking record pay packages, or complain about companies handing out hundreds of millions in dividend deals? With the Tories, why is it always workers who make the sacrifices while the rich reap the rewards?
Ian Byrne (Liverpool, West Derby) (Lab)
It is an honour to serve under your chairship, Sir Mark. I thank my hon. Friend the Member for Leeds East (Richard Burgon) for securing this incredibly important debate.
Two thirds of my constituents in West Derby are having to cut back on hot water, heating and electricity. One in three in my city are in some kind of food poverty, and 3.7 million children across the UK—one in five—have eaten less, skipped meals or gone without meals for an entire day. Meanwhile, Unite the union’s analysis of the industries that together have the biggest impact on inflation has found industry profit increases of over 20,000% for the big eight shipping firms, 366% for oil refineries, 255% for giant agribusiness food corporations and 84% for the big four energy companies. While many of my constituents have been forced into fuel poverty, oil and gas company BP has made a record $28 billion profit and doubled the salary of its CEO to £10 million. The immorality of this position—leaving the most vulnerable hungry while corporations are awash with profits—shames this place.
Let me touch on corporate profits and food poverty specifically. In the past 12 months, there have been extreme rises in the cost of staple foods: cheese is up 50%, two pints of milk is up 40%, eggs are up 28% and white sliced bread is up 21%—and there are locks on baby formula milk. Tragically, the rises affect the poorest households most of all, because they spend a larger percentage of their household income on food. The poorest fifth of the population would need to spend 43% of their disposable income on food to afford the recommended healthy diet in the Government’s “Eatwell Guide”. With so many other pressures, that is simply not achievable.
Unite the union highlights:
“Despite the rise in wholesale prices, Tesco, Sainsbury’s and Asda still managed to increase their profits by an astonishing 97% in 2021…Profiteering is happening right along the food supply chain”.
Eight of the UK’s top food manufacturers made a combined profit of £22.9 billion—up 21% since before the pandemic. The four giant agribusiness corporations ADM, Bunge, Cargill and Louis Dreyfus made $10.4 billion, which is up 255%—absolutely staggering profits.
In the food industry, the workers who grow, distribute and supply our food are left unable to purchase the very food that they produce. The latest survey from the Bakers Food and Allied Workers Union found that four in 10 food workers are forced to skip meals, and over 60% of respondents said that their wages are not high enough to meet their basic needs. One worker wrote:
“I don’t have running hot water, so I can’t wash my hands thoroughly. Either trying to keep warm in bed or running on the spot. Staying at work longer to keep warm.”
In a letter I received this week, the Minister for Food, Farming and Fisheries told me:
“It is not for the UK Government to set retail food prices nor to comment on day-to-day commercial decisions by the companies.”
That is a cowardly response.
However, at a recent Environment, Food and Rural Affairs Committee session, we heard evidence from the United Nations special rapporteur on the right to food, who told us that corporations have a significant amount of power in markets, and there is not much being done to hold them accountable. Food prices are at the mercy of speculation, but Governments have the tools to stabilise prices. The inequality and levels of profiteering we are seeing are not inevitable. They are a result of a political decision by this Government—a Government that could intervene if they had the political will to do so.
It is one of the gravest and most frightening crises seen in our lifetimes, and yet many of my constituents tell me that they feel abandoned and ignored by a Government who are supposed to protect them. The situation cannot go on. I urge the Minister to heed the advice of the United Nations special rapporteur and use the tools to tackle this injustice. Do not leave the most vulnerable at the mercy of the greed and morality of those corporations.
Claudia Webbe (Leicester East) (Ind)
It is a pleasure to serve under your chairship, Sir Mark. I congratulate the hon. Member for Leeds East (Richard Burgon) on securing this important debate.
The UK economy was already facing a crisis of high inflation driven by corporate greed, which was squeezing living standards and forcing millions deeper into poverty, but while large corporations have exploited the crisis and the Government’s inaction to make record profits and pay hefty dividends to shareholders, the Bank of England has again increased rates, which punish ordinary people who are not the cause of inflation the Bank supposedly wants to bring down. Worse than that, the Bank knows that people and wages are not driving inflation. Even the Governor of the Bank of England, Andrew Bailey, admitted at the press conference to announce the latest crippling interest rate hike that he knows that wages and renumeration are not causing high inflation. Instead, he said that the main drivers are the high prices being charged for food and clothes—two essentials that people have no choice but to spend money on.
Anyone would think that the workers of Leicester would be wealthy, such is the scale of the food and garment factories in the area, clothing and feeding the nation. However, 42% of children in my constituency of Leicester East are living in poverty. According to the ONS data from 2022, the median annual wage of workers in Leicester East is £19,960, compared with averages of £25,837 in the east midlands and £27,756 in the rest of the UK. There is no union recognition in those factories to protect workers from the profiteering supermarkets and billionaire garment-brand owners.
What is the interest rate hike meant to do? Is it meant to force people to eat less and wear rags or cheap, unsustainable garments? When all they have is an interest rate hammer, ordinary people—even the poorest—look like a nail. The Government need to force the Bank of England to work with them to bring about an effective approach to controlling inflation by capping prices. That would hit companies in their profits when they stoke so-called greed inflation, not hammer innocent ordinary people over and over.
Last week, former Monetary Policy Committee member, Danny Blanchflower, said that the Bank of England was guilty of terrible group-think and incompetence, and should just quit, because its decision to raise interest rates was so appalling. Corporations, brands and retailers are abusing the people of this country for the sake of profit. The Bank of England is attacking the wrong people, and this Government are failing in their primary duty of protecting the people. When are the Government going to step in and end this greed-driven, greedflation madness?
John McDonnell (Hayes and Harlington) (Lab)
I want to try to take the argument on from the discussions that have taken place so far. My hon. Friend the Member for Liverpool, West Derby (Ian Byrne) spoke about food, which is such a basic need. If we cannot control the supply and price of food, to be frank, we lose control of our overall economy and our society itself. The food increases that my hon. Friends have spoken about relate partly to short-term issues such as the breakdown of the supply chain post covid and the Ukraine war, and partly to two seemingly more permanent issues. The first is the impact of climate change, which is undoubtedly impacting the supply of food, and the second is the almost permanent installation into our economy of profiteering. That is why the Unite report, which introduced the concept of greedflation, is so important.
My hon. Friend cited several instances of greedflation, but food is a good example. There has been a 97% increase in supermarket profits, and a 255% increase in the profits of agribusinesses themselves. Unless we can develop policies to tackle climate change, including by accommodating to it in some areas, and get greedflation under control, these rises will be a permanent factor that will undermine the quality of life of all our constituents in the long term.
This debate is not just an exposition of the problems; it has to be a way for the Government and Opposition parties to talk about solutions to address the immediate problems and look at the long term. My hon. Friend the Member for Leeds East (Richard Burgon)—I congratulate him on securing this debate—mentioned some. The first is the need for immediate action, which must mean price controls. Price controls on basic foodstuffs have been introduced in this country in the past, particularly to deal with short-term problems. I do not think that permanent price controls are effective, but on a temporary basis—12 months, for example—they can be. Other countries, including Switzerland and Hungary, are already developing price controls, and France has introduced its own mechanisms for negotiating prices down on the basis of the expectation of price levels.
My view is that price controls are needed because of the urgent situation our constituents are facing. I think the Unite report said that there has been a 57% increase in the number of households that are restricting their food intake, and in which parents are choosing not to eat so their children can. Unless we can do something urgently to assist them, we will be inflicting human suffering on our society. To be frank, my generation has not seen that before; it is almost reminiscent of the ’30s.
Secondly, let us just talk about excess profits. I want to quote a senior Conservative Minister, who introduced excessive profit taxes across the whole of the economy. He said:
“At a time like this sacrifices should be equally borne. We are not prepared to see excessive profits”.—[Official Report, 11 March 1952; Vol. 497, c. 1289.]
He introduced a new levy, which was charged on the amount by which current profits exceed standard profits. That was Rab Butler in the 1950s, who introduced a model that we could draw upon now. It would extend across the whole economy and would expose and properly tax those who are exploiting the current economic situation.
The other issue is something I have raised in previous debates. During the banking crash—some of us were here at the time—we witnessed a shift in investment from the crashing mortgage economy. The crash at one point brought our banking system to a halt, and almost did something more fundamental, in terms of destroying confidence in the financial system. Money moved out of property, where prices were crashing, and into food speculation, and we saw rapid increases in food prices. In fact, in some areas of the globe, we even saw famine as a result.
Then, on a global basis, an agreement was reached and we inserted into the regulatory regime after the banking crash certain controls on food speculation—for example, how much food wealth could be owned by a particular speculator. The Government at the moment, in their Financial Services and Markets Bill, are removing those protections. Already food speculation is taking place and causing some of the profiteering that is happening, but we are inviting even further speculation, which I think in the short and medium term will result, in the same way it did after the banking crash of 2007-08, in people going hungry and famines occurring in parts of the world.
My final point is that if the Government are not willing to act so decisively with price controls, regulation of speculation or an excess profits tax, the minimum that we should ask for is an inquiry into the anti-competitive market practices taking place in certain sectors. I would like to start with the food sector. We are seeing this demand being met in the US now; an investigation is taking place into the anti-competitive market practices that are happening. The US is at the moment looking at the fertiliser and agricultural business sector. In this country, we need an investigation into the profiteering and greedflation in particular—that is the No. 1 issue—that is taking place in the food and agricultural sector.
We cannot stand by and watch people line their pockets and corporations make excessive profits while our people, in some of our constituencies, are actually starving—they are actually going hungry. That is why, in this period, special measures are needed. They are measures that we have used in the past, that people are using in other countries and that have proved to be effective. If nothing else, if they were even temporary measures, they would alleviate the situation that our constituents face. This is a matter of urgency. That is why I keep repeating time and again, in as many debates as I possibly can, the need for action.
I will just say this to my own party: this crisis of greed inflation, combined with the climate crisis, means that when we take over and go into government next year—as soon as possible, I hope—we will have to address this issue. We will have to have the radical solutions that need to be put forward; otherwise, we will not be fulfilling our historic mission of looking after working-class people in this country.
Sir Mark Hendrick (in the Chair)
Now we move to the Front-Bench contributions. I call the spokesperson for the SNP.
Ronnie Cowan (Inverclyde) (SNP)
I congratulate the hon. Member for Leeds East (Richard Burgon) on securing the debate. Profits can be good if they are used wisely—if people reinvest them in their workforce and to pay their employees proper salaries. The question is: how big do profits have to be, and how were they created? Were they created on poor wages and poor working conditions? Were they created on inflated prices in the first place?
It was Thatcher who told us that greed was good. She saw it as a driver—something to push people hard to make them generate bigger profits. People would be “fulfilled” by their ability to gather more—more money, more houses, more cars, more wealth. We see this in our society today; it did not end with Thatcher, unfortunately. We have kings and queens in gold coaches, wearing diamond-encrusted crowns, flashing orbs and swords dripping in jewels, and being dragged through the streets as exemplars of what our society should be looking up to. Currently, money makes the world go round. A few people possess the most, and the message to those without is, “Money makes you happy.” It is an insecurity that these people have—how much is enough? If someone is a millionaire, do they need two million? Do they need five million? Do they need a billion? How big is their insecurity if they think money and wealth is going to fill that hole for them? Corporations push for more and more, while many are being left behind by this greed attitude. It is not new, but years of Tory austerity have increased the number of people living in a precarious fashion.
We need to reset the goals. Rather than measuring success in money and incentivising profits over people, we need to prioritise wellbeing, and promote a four-day working week and a universal basic income. As artificial intelligence advances and the gig economy takes hold, tinkering around the edges will not solve the problems. The land belongs to the people; the water and the trees belong to the people. We need a return to community. We need government closer to the people.
The Beveridge report in 1942 was a clarion call to create a fairer society, and it is as true today as it was 80 years ago. While this Government curtail the powers of the trade unions, and suppress the right to strike and the ability to vote, they are propping up the greed in society. That is unsustainable; history has taught us that. If we are to create a fairer society, we need to reprioritise the aims of this Government. We must be prepared to put people before profit.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate.
As I think everyone in this House will know, working people are facing the biggest hit to living standards since records began. Real wages are lower than they were 15 years ago, with families in the UK going into the cost of living crisis significantly poorer than those in comparable European countries. The price of everyday essentials has risen by an eye-watering £3,500 since 2020 and there have been 24 tax rises since 2019 alone, with working people facing the highest tax burden in 70 years.
After the former Prime Minister crushed the economy last year, the resulting rise in interest rates and economic instability has added hundreds of pounds a month to first-time buyers’ bills. Whether it is stagnant wages, rocketing prices and bills or sky-high taxes, at every turn it is hard-working people in our constituencies who are paying the price of economic instability. The Opposition have been calling for policies to support people with the cost of living crisis and rampant inflation. For example, since last August we were calling for a fairer deal for those paying a premium on energy prepayment meters. The Chancellor finally gave in in his 15 March Budget—after months and months of lobbying from the Labour Benches.
Since this crisis began, Labour has been calling for a windfall tax on energy giants to support working people with their energy bills. After months of the Prime Minister dismissing our proposals as “disastrous”, he was forced into a U-turn in May last year. But even after his party supported our idea of a windfall tax, the Government still did not adopt a comprehensive windfall tax as we have been suggesting. By refusing to backdate the tax to January 2022, end the investment allowance tax loophole and raise the rate in line with other countries, the Government has left £10.4 billion on the table, leaving working people to foot the bill.
The Labour party will always put ordinary families first, which is why we would: reverse the expensive cash giveaway to the wealthiest pension savers and introduce specific measures to keep doctors in work; scrap the unfair non-dom tax status, which cost the UK over £3 billion a year, in order to pay for free breakfast clubs and the biggest ever expansion in the NHS workforce; and slash business rates for small shops—paid for by properly taxing online giants—to cut the eye-watering cost of everyday items.
With the ONS figures confirming that 2022 was a record year for North sea oil and gas profits, Labour would prioritise the needs of working people by introducing a proper windfall tax to raise an additional £10.4 billion. We would use the additional funds to cut energy bills for domestic food manufacturers and processors to bring down food prices for people across the country.
Fundamentally, we understand that the UK needs a long-term economic plan to boost living standards for working people and bring down the prices of everyday essentials. The crisis has exposed structural problems in the British economy, and our constituents have been trapped in a cycle of stagnant growth, low wages and high tax. If our growth rate stays where it has been over the past 13 years, families in the UK will be poorer than those in Hungary and Romania by 2040.
That is why a Labour Government’s first mission will be to secure the highest sustained growth in the G7 and to create well-paid jobs in every part of the country. We want to achieve that through an active partnership with business and our modern industrial strategy, while our green prosperity plan will drive bills down and let British businesses and workers compete in the global race for the jobs and industries of the future. The US has passed the Inflation Reduction Act, and the EU has its own Net Zero Industry Act. The UK has fallen behind. In contrast, the Labour party’s economic plan will get the UK growing again. Our new deal for working people will ensure that they benefit from that growth by boosting living standards and wages across the country.
That is why I hope the Minister will listen to all the comments made in this debate and, in his closing remarks, finally commit to putting working people before the energy giants and lend his Government’s support to Labour’s windfall tax to help tackle inflation and the cost of living. More than that, I hope he will reflect on everything he has heard today from colleagues across the Chamber and get behind Labour’s mission to secure the highest sustained growth in the G7.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a great pleasure to see you again in the Chair, Sir Mark. I congratulate the hon. Member for Leeds East (Richard Burgon) on securing this well-attended debate, and for his valiant attempt to leave his mark on the lexicon on this topic. I thank all Members for their contributions. Clearly, the issue of high prices and inflation is affecting everybody across the country—all our constituents, who send us here—and I welcome the opportunity to respond on the Government’s behalf.
The reality is that costs in the UK have primarily risen because of Putin’s illegal invasion of Ukraine and global supply pressures post covid. The right hon. Member for Hayes and Harlington (John McDonnell) was the only one of the eight contributors we heard from, including both Front-Bench spokesmen, to even go so far as to mention those two unprecedented facts.
Andrew Griffith
I stand corrected. I was being diligent and attentive, but I was clearly so taken by the force of the arguments made by the hon. Members that I missed that.
John McDonnell
Will the Minister explain the role that Putin played in ensuring that Tesco, Sainsbury’s and Asda increased their prices to such an extent that they have increased their profits by 97%?
Andrew Griffith
If the right hon. Member lets me make some progress, I will address precisely his point. Domestic inflation pressures have risen. The UK labour market has remained very tight, reflecting a real cost headwind to employers. There have been real challenges, as we saw in the labour figures today, in getting people off welfare and into work. That has pushed up the cost to firms, including Tesco and others, of producing goods, which has resulted in inflation. The UK is not alone, and I hope Members will reflect on and understand that. We are seeing high inflation in all major global economies. Food inflation in Germany is above 20%.
Margaret Greenwood
Will the Minister come back to the question from my right hon. Friend for Hayes and Harlington? Why have profits increased so much?
Andrew Griffith
With respect, I have not heard an awful lot of analysis in the debate. I have heard many mentions of Unite the union, and I am familiar with its work, but I did not hear any analysis from Members. Let us talk about food prices for just a moment.
Andrew Griffith
I will give way because it is the hon. Member’s debate, but I will talk about food prices, if that is what I am being asked to do.
Richard Burgon
The Minister said he heard very little analysis from Opposition Members other than reference to research by Unite the union. Does he accept, however, that as well as Unite the union, officials at UBS, Goldman Sachs, the European Central Bank and the US Economic Policy Institute all suggest that more than half of the current price mark-up is to do with profiteering? If so, what are his Government going to do about it?
Andrew Griffith
I listened to the citations and I will go away and inform myself about them, but one can find a million citations in support of any argument, however spurious.
Let us get to the heart of food inflation. After reading the report from Unite the union earlier today, I went and did some research. I am keen to understand the level of alleged profiteering that we see, so I looked into costs at the Co-op, a mutual organisation that I believe supports many Opposition Members. I compared the alleged profiteering by our major supermarkets with what is happening in an organisation that I hope we can all agree—and join hands across the House—is not indulging in profiteering. The cost of four pints of milk at the Co-op is 20p more expensive than at Tesco. I have a wonderful chain of Co-operatives in my constituency and it serves our rural community magnificently, so I pay great tribute to the Co-op, but six eggs in the Co-op cost 35p more than at Tesco. The Co-op was retailing the same loaf of white bread for 56p more, and chicken breasts for £1.70 more, than Tesco. The Co-op is retailing butter, tea and Heinz baked beans for 40p more than Tesco—I would be very happy to give Hansard the details of this. I will stop at the emotive category of baby milk: an 800g pack of Cow & Gate baby powder retails for £10.50 at Tesco, but the same product retails for £11.50 at the Co-op.
I put it to you, Sir Mark, that we are seeing either a vibrant and competitive market in food retail—which includes the Co-operative mutual organisation, although its prices seem a little higher—or a level of anti-competitive practices. But if it is the latter—right hon. and hon. Members should be enormously careful about this—those anti-competitive practices and that profiteering extend to no less an organisation than the Co-operative mutual society, which supports Opposition Members. If any of them want to intervene on me, I would be very interested to hear their view of the Co-operative’s business practices.
John McDonnell
Let me explain this to the Minister. There is such a thing as the Co-op party, of which some people on this side of the House will be members, and there is such a thing as the Co-op store. The Co-op store is not related to the Labour party; it is a completely separate commercial entity. The Co-op party is separate completely, so there is no relationship between the Members here and the Co-op store, although some of them might shop at it.
Sir Mark Hendrick (in the Chair)
Order. John McDonnell has made a good point, but for clarification, as a Labour/Co-op MP—
Sir Mark Hendrick (in the Chair)
I do declare an interest. What you call “profits” for the Co-op actually get reinvested in it; they are not given out to shareholders in dividends. That is the difference.
Andrew Griffith
As I said, the Co-operative, as a food retailer, is a marvellous organisation. My point is that we should be very cautious about simply making the assumption that an increase in the prices that consumers are paying, which is spread across very different parts of the producer sector, automatically leads to the sorts of outcomes that we heard from Opposition Members.
We have strayed quite a long way away from the topic of debate. I would dearly love to be a fly on the wall, or a passenger on the train as it returns to both Leeds East and Leeds West, because there is some dissonance in my mind about the position of the Opposition today. We have had a very refreshing debate that has been honest and open in its candour. We have heard about the need for the minimum wage to increase to £15 an hour, the need to scrap all anti-trade union laws and to give an above-inflation pay rise to workers, the need for an excess profits tax and for wealth taxes, the need for private rent controls, the need to impose price controls on food staples—there is lots of nodding, so please intervene on me—and the need to return to public ownership every water, rail and energy company. These points were all raised in the debate—
Sir Mark Hendrick (in the Chair)
Order. Because of the Divisions, we have run short of time.
Written Statements
(11 months, 4 weeks ago)
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Contingencies Fund Advance: Companies House
(11 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The Economic Crime and Corporate Transparency Bill will reform the operations of Companies House by setting out new objectives for the Registrar of Companies, including additional powers to query and amend the register where it is suspected that there is fraud or error, as well as scope to proactively share intelligence on criminal activity across Government to combat economic crime. These provisions will help Companies House do more to tackle criminals, terrorists, and corruption, strengthening the UK’s reputation as a place where legitimate business can thrive, while driving dirty money out of the country.
The legislation enables further investigation and enforcement activity to be undertaken against corporate entities. In readiness for this responsibility we propose to ensure Companies House has the right staff and systems in place to deliver the Registrar’s new powers.
Parliamentary approval for additional resource of £425,000 and capital of £37,000 for this new service will be sought in a main estimate for the Department for Business and Trade. Pending that approval, urgent expenditure estimated at £462,000 will be met by repayable cash advances from the Contingencies Fund.
[HCWS773]
Farm to Fork Summit
(11 months, 4 weeks ago)
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The Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
Today the Prime Minister and Department for Environment, Food and Rural Affairs Ministers will meet representatives from across the supply chain at the UK Farm to Fork summit to discuss further opportunities to boost growth, innovation and sustainability in the food sector. The event will build on progress made since the Government’s Food Strategy was published last year, in which we committed to broadly maintaining the current level of food we produce domestically, while sustainably boosting production in sectors such as horticulture and seafood.
The Government have set out a new package of support for farmers to strengthen food security, boost trade and exports, unlock new technologies and support the long-term resilience and sustainability of the sector today.
The Government will protect the interests of farmers by making sure they get a fair price for their produce. We are already using new powers under the Agriculture Act 2020 to improve transparency and contracts in the pork and dairy markets. We are now announcing additional reviews into the horticulture and egg supply chains, in light of the impact of global challenges on these sectors in particular. In addition, we have listened to feedback from the sector and we will not be merging the Groceries Code Adjudicator with the Competition and Markets Authority, in recognition of the importance of the code and the adjudicator in ensuring fairness in the UK food supply chain
The Government will unlock the benefits of innovative technologies to strengthen our food security, cementing the UK’s leadership in this field. We will invest up to £30 million to drive forward the use of precision breeding technologies. This will build on the £8 million already invested over the last five years and the passing of the Genetic Technology (Precision Breeding) Act 2023 earlier this year. We will also create a new working group—bringing together plant breeders, food manufacturers and retailers—to get produce from farms to the shelves.
The horticulture sector is worth £5 billion across the UK and the Government will support the industry to boost production. We will improve future support for horticulture by replacing the retained EU fruit and vegetable producer organisation scheme when it closes in 2026 with an expanded offer as part of our new farming schemes. Given the important role that controlled environment horticulture (CEH) plays in UK food production, the Government will investigate what more can be done to support the sector. This will include assessing where sectors such as CEH struggle to provide the necessary data to qualify for current support under the energy intensive industries (EII) exemption scheme. At the UK Farm to Fork summit we announced that:
To increase domestic horticulture production and extend the growing season, the Government will consider the unique needs of controlled environment horticulture, which includes glasshouses, in their development of industrial energy policies to allow this sector to benefit from decarbonisation and better access to renewables, including in the upcoming consultation on Phase 3 of the IETF in June.
We will explore how we can increase the resource efficiency of the sector, and help to create a circular economy, by utilising industrial and power sector waste heat as a thermal source of energy for glasshouses and looking at options for co-location to improve energy efficiencies.
To ensure that farmers have access to the labour they need, the number of seasonal workers available in 2024 will again be 45,000—plus 2,000 for poultry—an uplift of 15,000 compared to what was available to businesses at the start of 2022, with the potential for a further 10,000 visas should the demand be proven. We will build on this and set out an action plan for the horticulture sector in the autumn, when we will also respond to the Labour review.
Building on the Plan for Water announced last month, the Government will accelerate work on water supply infrastructure, make abstraction licences more flexible, create national and regional water resource management plans, and support farmer-led groups to identify local water resource schemes to support farmers with the access to water they need to be productive.
The Government will give formers greater freedoms to make the best use of their existing agricultural buildings and support the wider rural economy by launching a review of the planning barriers to farm diversification later this year.
This Government will boost trade and export opportunities to get more British food on plates across the world, building on the £24 billion a year generated by our food and drink exports. Farmers’ interests will be put at the heart of trade policy through a new framework for trade negotiations, committing to protect the UK’s high food and welfare standards and prioritise new export opportunities. We will invest £2 million to boost our programme of global trade shows and missions, provide £1.6 million for the GREAT food and drink campaign, and introduce five additional agri-food and drink attachés. We will extend funding to promote seafood exports around the world with an extra £1 million between 2025 and 2028, and create a new bespoke £1 million programme to help dairy businesses, particularly SMEs, to seize export opportunities, particularly in the Asia-Pacific region.
Fulfilling the Prime Minister’s priority on economic growth, the Government will continue to work hand-in-hand with the industry to champion UK food and drink, both at home and abroad, helping more businesses to invest in domestic production and innovation.
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Information Orders Code of Practice: Consultation
(11 months, 4 weeks ago)
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The Minister for Security (Tom Tugendhat)
The Proceeds of Crime Act 2002 (POCA) contains a comprehensive package of measures designed to make the recovery of unlawfully held assets more effective. The operation of certain powers within POCA are subject to guidance in various codes of practice issued by the Home Secretary, the Attorney General and the Advocate General for Northern Ireland, the Department of Justice Northern Ireland and Scottish Ministers.
A new code of practice needs to be made to reflect possible changes made to POCA by the Economic Crime and Corporate Transparency Bill (ECCT Bill) [1]. Subject to its commencement, the ECCT Bill will make amendments to part 7 of POCA to create additional Information Order powers that will assist the National Crime Agency (NCA) with operational analysis of information that is relevant to money laundering or suspected money laundering and/or terrorist financing or suspected terrorist financing. It will also assist the NCA with strategic analysis identifying trends or patterns in the conduct of money laundering or terrorist financing, or systemic deficiencies or vulnerabilities which have been or are being likely to be, exploited for the purposes of money laundering or terrorist financing. For clarity, the title of ‘Further Information Orders’ in this part of POCA, will be replaced with ‘Information Orders’.
It is also intended that the additional Information Order powers will be replicated in part III of the Terrorism Act 2000 (TACT).
POCA and TACT provide that before a code of practice is issued, I must consider any representations made, modify the code as appropriate, and subsequently lay the code before Parliament for approval.
I am today launching a consultation on the following code of practice:
Code of practice issued under section 339ZL to the Proceeds of Crime Act 2002 and section 22F to the Terrorism Act 2000 about certain Information Orders.
A copy of the consultation document and the draft code of practice will be placed in the Libraries of both Houses and published on www.gov.uk.
Following this consultation, I intend to lay a statutory instrument to issue this code of practice under the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000 (TACT) to reflect changes as a result of the Economic Crime and Corporate Transparency Bill.
[1] This is subject to powers being inserted into POCA by the Economic Crime and Corporate Transparency Bill being passed by Parliament and receiving Royal Assent.
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Local Government Finance
(11 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)
Following the local government finance settlement statement made on 6 February 2023,1 am today announcing a further £3 million in grant funding for 2023-24 to support 15 local authorities severely impacted by the increase in levies from internal drainage boards. This increase is being driven by the unprecedented rise in energy costs that impact particularly energy-intensive services including internal drainage boards. As this has been an exceptional year for the rise in energy costs, this will be an exceptional one-off payment to help ease this additional financial burden on councils. The Government will not provide additional grant to local authorities for these levies on an ongoing basis. Councils and internal drainage boards should continue to take action to deliver efficient services and good value for money for the public. Local authority Allocation (£) Bassetlaw £181,977 Boston £318,890 East Cambridgeshire £104,160 East Lindsey £927,373 Fenland £177,281 Folkestone and Hythe £32,043 King’s Lynn and West Norfolk £205,451 Lincoln £141,926 Newark and Sherwood £239,690 North Kesteven £143,975 North Norfolk £35,265 South Holland £298,739 South Kesteven £87,761 Swale £41,388 West Lindsey £64,082 Total £3,000,000
The 15 local authorities in scope are those whose internal drainage board levies account for over 3% of their average core spending power over five years. The allocations listed in the table below are based on 2023-24 internal drainage board levy increases.
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