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Oral Answers to Questions
(10 months, 2 weeks ago)
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Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I regularly meet the senior judiciary, including the Lord Chief Justice, to discuss priority issues across the justice system, including prisons. We are delivering 20,000 additional modern prison places, the largest prison build programme since the Victorian era, ensuring the right conditions are in place to rehabilitate prisoners, cut crime and protect the public. We have already delivered 5,200 of these places, including at the brand new HMP Fosse Way, which opened last month and which I look forward to visiting later this week.
Mr Sheerman
The Secretary of State, for whom I have great respect, surely knows that there is enormous unhappiness in the prison estate. Recent polls show how low morale is and how many people working in our prisons doing that difficult job are fearful for their safety. Will he meet me and perhaps even the Chair of the Justice Committee, the hon. Member for Bromley and Chislehurst (Sir Robert Neill), to talk about how we can find a way forward for the young people—there are perhaps 1,000 of them—in prison under joint enterprise? That would help him with prison overcrowding and bring justice to so many young lives.
Alex Chalk
I am grateful to the hon. Gentleman and will be happy to meet him to discuss that. I am glad that he paid tribute to prison officers, who do spectacularly important work. One thing I am proud of delivering is body-worn video cameras for all of them, because that is so important for de-escalating volatile situations and potentially gathering evidence so that they can see justice done.
Joint enterprise is a sensitive issue. I know that the hon. Gentleman takes a proper interest in it, but it is the legal doctrine that ensures that the getaway driver does not avoid culpability, that the lookout of the armed robbery is also culpable, and that the person who supplies the murder weapon, knowing that it will be used in that offence, also cannot escape liability. The Court of Appeal has considered this at some length in the case of Jogee, and we have to be very careful before seeking to recalibrate it. However, I am happy to discuss it with the hon. Gentleman at a time of his choosing.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I am sure that the Lord Chancellor, as well as thanking the current Lord Chief Justice for his work, will welcome the appointment of Dame Sue Carr as the first woman Lord Chief Justice of England and Wales and look forward to working with her, too. Does the Lord Chancellor agree that one of the real areas of concern and pressure on prisons is the growth in the remand population? In January, before he was appointed to office, the Justice Committee produced a report on remand, from which some recommendations were accepted and some were not. Will he revisit some of those recommendations and see what more we can do to bear down in particular on the growth in remand for people who after all have not yet been convicted?
Alex Chalk
Those are excellent points. Let me begin by joining my hon. Friend in welcoming Dame Sue Carr, whose appointment has been hugely welcomed across the political spectrum, across the legal sector and beyond. I also pay tribute to Lord Burnett. I think I speak on behalf of everyone in the House in saying that there is nothing but regard and respect for the contribution that he has made.
On remand, my hon. Friend is absolutely correct. It is worth reflecting that, compared with the pre-pandemic period, there are between 4,500 and 5,000 more of those people in custody. As he rightly pointed out, they have not been convicted of any crime. Technology, such as electronically monitored tags, can be of assistance. It is for the bench or the Crown Court judge to decide whether there are reasonable grounds to believe that, if released on bail, that person would commit further offences or fail to surrender, but I know that the courts will want to bear the technological options in mind.
Ellie Reeves (Lewisham West and Penge) (Lab)
Over the past 10 years, more than 3,000 prison places have closed and community sentences have halved, and the three new prisons planned will not open before 2027 at the earliest. No wonder we have a prison capacity crisis, with the Government having to commandeer police cells and judges being told to jail fewer people. How can the public have faith that they will be protected and that crime will be punished when that is the Government’s record?
Alex Chalk
I am grateful to the hon. Lady. It is worth reflecting that the second biggest programme in Government after High Speed 2 is in prison building. I invite her to go and look at Five Wells or Fosse Way, or at the work taking place at Millsike. Those are modern, safe, rehabilitative, productive prisons. We make no apology for investing in our prison estate because, if we can bear down on the things that prevent individuals from getting back on the right side and putting crime behind them, that is good for society, good for the individual and good for the taxpayer.
Mr Speaker
Order. We are 10 minutes in and still on question 1. I want to make sure that we get everyone in.
Paul Holmes (Eastleigh) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
We are determined to ensure that domestic abuse victims secure access to justice and the protection of the law. The changes we are making to the legal aid means test mean that more than 2 million more people in England and Wales will be eligible for civil legal aid each year. Domestic abuse victims in receipt of universal credit will not be means-tested when applying for protective orders, effectively fast-tracking access to legal support and the protection of the courts.
Paul Holmes
I welcome the new policy, which means that domestic abuse victims who cannot access joint assets controlled by their abuser will no longer have those disputed assets counted towards their eligibility for legal aid. Does the Lord Chancellor agree that this will help to secure access to justice for survivors when their abusers try to continue to control them after they have split?
Alex Chalk
I agree wholeheartedly. My hon. Friend puts it well. Disputed assets such as the family home are by their nature illiquid and inaccessible. Worse still, they may be controlled by the abuser. By ensuring that those assets are not taken into account when deciding whether to grant legal aid, we are helping to ensure that victims of DA can access that vital legal support and, with it, the essential protection of the courts.
Andrew Gwynne (Denton and Reddish) (Lab)
Extending legal aid eligibility to 2 million extra people is great, but eligibility is not the same as access to legal aid services, which have been collapsing in the last 18 months. We have seen a 20% reduction in housing legal aid providers, 21% less mental health support, 27% less welfare support and 30% less immigration and asylum support. There is a crisis in access to fair justice. What is the Secretary of State doing about that?
Alex Chalk
I am delighted to say that we are expanding access to legal aid to more than 6 million more people in total. Let me pay tribute to legal aid lawyers, who have an exceptionally important role in ensuring that individuals have access to justice. What we will not do on the Government Benches is demonise legal aid lawyers. I was in practice as a legal aid lawyer. Charlie Falconer has admitted that he regrets that the Labour Government demonised “fat cat” lawyers. It was not true then, and it is not true now. We will support legal aid lawyers.
Christian Wakeford (Bury South) (Lab)
Ruth Jones (Newport West) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Through the rape review, we are making strong progress in our ambitions to increase the number of referrals to the Crown Prosecution Service, CPS charges and Crown court receipts for adult rape cases back to 2016 levels. Incidentally, 2016 levels are ambitious, given convictions in that year were 30% higher than in 2010. According to the latest quarter of data, we are on track not just to meet but to beat each ambition. Adult rape prosecutions continue to rise, up 44% in the last year, meaning that more people are being put on trial for this devastating crime than in 2010. There is further to go, but it is important and welcome progress.
Christian Wakeford
Is it any wonder that women do not come forward when they have been raped? Not only is there a 1% chance of the perpetrator being charged, but women have to wait nearly three years for a result. Recent figures from Rape Crisis show that victims and survivors of rape and other serious sexual offences wait the longest to have their experiences heard in court, with an average wait of 839 days from report to completion in court. The delays are having a devastating impact on victims and survivors, leading to deteriorating mental health and wellbeing and survivors attempting to end their life as a result. The Government have given up on protecting women and girls, have they not?
Alex Chalk
I regret that language. As a matter of fact, convictions are at or around the 2010 level. If the hon. Gentleman wants to suggest that rape was decriminalised in 2010, he is welcome to, but it is completely untrue. The number of prosecutions is higher this year than it was in 2010. Of course we must continue to invest in supporting victims—that is why we have 800 independent sexual violence advisers to accompany those victims on what can be a difficult and traumatic journey. How many were there in 2010? There were a handful.
Ruth Jones
There were 580 rapes recorded by Gwent police for the year ending March 2022. Given that, as we have heard, across England and Wales only 1.3% of rape cases result in a charge, will the Secretary of State tell me how many Gwent cases resulted in a successful prosecution and what is being done to increase prosecution rates?
Alex Chalk
The statistic that the hon. Lady just cited is completely wrong. Let me make a couple of points. The number of rape convictions is at or around the level it was in 2010. The number of cases passed by the police to the CPS for charge is up 130%. The number of cases charged is up more than 90%. The number of cases received in the Crown court is up more than 120%. Of course there is more to do. Of course work needs to take place, but the system is recovering very well. People are getting justice and those rapists are being convicted, punished and disgraced. Finally, the sentences they receive are around a third longer than the sentence they received in 2010. That is just deserts for wicked rapists.
Dame Maria Miller (Basingstoke) (Con)
My right hon. and learned Friend is absolutely right that support for victims has been essential in increasing the number of cases taken to court. As he said, the numbers have risen significantly in the last 12 months. Could he outline what more he is doing to speed up the time taken to get a case to court, because that time waiting can leave victims not only distressed but potentially walking away from a case that would otherwise come to court?
Alex Chalk
My right hon. Friend is absolutely right to make those balanced and fair observations. To try to assist victims, there are a few really important things. Rolling out section 28s ensures that individuals can get their account recorded on tape; that is done whatever then happens in the court process. The independent sexual violence advisers and the independent domestic violence advisers, whom I have talked about, make an enormous difference. Through the victims code, we want to ensure that individuals get the support they need from victims’ services, have the opportunity to go on court familiarisation visits, make victim personal statements and are kept updated by the officer on the case as it proceeds. All those things are critical to ensuring that victims are not spectators of the criminal justice system, but participants in it.
Edward Timpson (Eddisbury) (Con)
The section 28 achieving best evidence video interviews to which my right hon. and learned Friend refers are there to support vulnerable witnesses and to help to secure not only a charge but a conviction. However, yesterday, during a Justice Committee evidence session, we heard from senior King’s Counsel that there were incidents where such cases were being de-prioritised because of the backlog in the criminal courts, on the basis that in essence the evidence-in-chief had already been taken. Is my right hon. and learned Friend aware of that issue? If not, will he look into it further and report back to the Committee?
Alex Chalk
I am grateful to my hon. and learned Friend for raising that important point. As he knows, listing—prioritisation; which case gets called first—is a matter for the independent judiciary, but he raises important issues. I would be happy to look at them and to discuss them with him, if appropriate, in due course.
Giles Watling (Clacton) (Con)
Marco Longhi (Dudley North) (Con)
Rob Butler (Aylesbury) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Our prisoner transfer agreement with Albania came into force in May 2022. Between January 2021 and December 2022, 1,441 Albanian foreign national offenders were returned to their home country from custody and the community. To build on that, we announced a new arrangement with the Albanian Government in May 2023 to speed up prisoner transfers, with an additional 200 of the most serious offenders able to be sent back to serve their sentences in Albania—good news for the rule of law and good news for the British taxpayer.
Giles Watling
I am very grateful to my right hon. and learned Friend for his work on Albania, illegal migrants and returning offenders. We pay £40,000 a year to maintain a prisoner in their cell and we do that for foreign prisoners, too. Will my right hon. and learned Friend seek to make more arrangements with other countries to return their offenders, thus saving the taxpayer money?
Alex Chalk
My hon. Friend is absolutely right. It is an expensive business to incarcerate people. The UK has over 100 prisoner transfer agreements. We are working hard to ensure that existing PTAs work as effectively as possible and deliver value for money for the taxpayer by removing FNOs to their home countries. My Department also has ambitions to secure PTAs with new countries. We are engaging with our counterparts in target countries to advance that. I will update the House in due course.
Marco Longhi
May I, too, thank the Secretary of State and the Prime Minister for the difference the agreement with Albania is making in reducing arrivals? Germany, a member of the ECHR, refuses to even allow claims from Albanians. Will the Secretary of State therefore consider derogating from the ECHR, as German appears to have done and as we did over prisoner voting, to further build on that success?
Alex Chalk
My hon. Friend has raised an important point. In the five months to the end of May, Albanian small boat arrivals were down by 90% on last year, and we have returned 1,800 illegal migrants and foreign criminals to Albania. Thanks to changes in our asylum system, we have gone from accepting one in five Albanian asylum claims to accepting just one in 50, in line with other European countries such as Germany.
Rob Butler
I am grateful to my right hon. and learned Friend for the progress that he is making in the removal of Albanian prisoners from our jails. I know from my time in his Department that they make up a sizeable proportion of the foreign national offenders whom we have in custody here. Does he agree that, at a time when our prisons are so close to capacity, the return of foreign prisoners to their own countries is important to ensuring that our hard-working and skilled prison officers can focus their work on the rehabilitation of offenders who will eventually be released into their local communities here in the UK?
Alex Chalk
My hon. Friend is entirely right. I am glad that he has raised the issue of rehabilitation because, as he says, when prisons can run a full regime, the opportunities for rehabilitation are optimised. I recently visited HMP High Down to see prisoners being trained in a brand new, purpose-built warehouse. They are learning the skills that they need for life on the outside and that work is bearing fruit. The percentage of prisoners in work six months after release has doubled in the last year, and that means a better chance for them to go straight and a better chance for the community not to have to suffer from crime.
Andy Slaughter (Hammersmith) (Lab)
If the Secretary of State were doing a good job of returning foreign prisoners, we would expect to see overcrowding coming down, but on a recent visit to Wormwood Scrubs prison I found, increasingly, that two people were occupying a one-person cell without a shielded toilet, and that time out of cell was between one and two hours a day. If the Secretary of State is proud of his record, will he collect and publish those statistics? At the moment, his Department is refusing even to collect the time out of cell figures.
Alex Chalk
Those statistics are not published, but I thank the hon. Gentleman for going to HMP Wormwood Scrubs, because I think it is important for Members to visit prisons.
When it comes to the additional numbers in custody, the key element is the number of people on remand, which, as I have said, has risen by between 4,500 and 5,000 since the period before the pandemic. That is important, not only because those people have not necessarily been convicted of any crime and all Members should have some concerns about people being in custody for a long period, but because some have been recalled. Of course we will work to drive down the number of foreign national offenders, but, as I have said, the principal issue that we are facing at present is that of remand prisoners.
Jim Shannon (Strangford) (DUP)
As always, I thank the Secretary of State for his answers. I know that our Ministers and our Government always maintain the highest human rights standards, and the highest standards in respect of prison conditions. Can the Secretary of State assure me that, when it comes to the transfer of Albanian prisoners, those high standards will be maintained in respect of both prison conditions and human rights?
Alex Chalk
The hon. Gentleman is right to raise this matter. Yes, we will be robust, but we will also be fair, and being fair means ensuring that basic standards relating to human behaviour and the way we treat our fellow human beings are upheld. When, as part of our robust arrangements with Albania, 200 of the most serious offenders—each costing us about £40,000 a year—are transferred there, that will happen in a dignified and appropriate way, and they will be serving in conditions with which both the hon. Gentleman and I will feel comfortable.
Alison Thewliss (Glasgow Central) (SNP)
The UK Government are reportedly paying jailed Albanian offenders £1,500 to return to their country of origin as part of an early release scheme. Can the Secretary of State tell us how many of those whom he has sent back have been eligible for that money, and how—given that one of them has told the BBC that he plans to come back to the UK within days or weeks of his release—he can be sure that this scheme is an effective deterrent?
Alex Chalk
Let me begin by saying that I know the hon. Lady is standing in for the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), and we wish him an early recovery. I will write to her about specific numbers but, on the issue of early removal, it is absolutely right that, if individuals who have served a requisite period in our jails can be sent back to their home countries, we should send them there, because of the cost to the British taxpayer but also because the capacity is needed to run a full rehabilitative regime. This policy is not controversial across parties and we are committed to upholding it.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Minister of State, Ministry of Justice (Damian Hinds)
The number of IPP offenders in custody has fallen from 6,000 in 2012 to 2,916 at the end of March this year. That includes 1,561 who had been released but were then recalled. The Government are committed to helping IPP offenders to progress through their sentences, under the revised IPP action plan published in April, and towards safe release.
Chi Onwurah
At age 17, my constituent Danny Weatherson was convicted of shoplifting, with a recommended term of 15 months. Seventeen years later, he has only just been granted parole, in a justice system that seems too under-resourced to progress his case. Imprisonment for public protection is a complex area, and many who serve such sentences undoubtedly do present a threat to the public, but does the Minister agree that discussions on reform should take place on a cross-party basis, with the voices of victims and justice campaigners heard, and that a functioning probation system is a prerequisite?
Damian Hinds
I am grateful to the hon. Lady for the tone in which she asks about this issue. Obviously, the role of the Parole Board and the probation service is vital, and the Parole Board is regularly looking at cases. I welcome what she said about continuing to look at this matter, and the Government welcome the Justice Committee’s recent report, which was an important opportunity to take stock. The Lord Chancellor will speak further on this matter in due course.
Simon Baynes (Clwyd South) (Con)
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The Government remain committed to reducing the outstanding case load in the Crown court and are working with partners across the criminal justice system to do so. For two years in a row we have removed the cap on the number of days the Crown court can sit, in order to increase capacity. We are recruiting up to 1,000 judges across all jurisdictions this year, on top of the 1,000 we recruited last year. We have also extended the use of 16 Nightingale courtrooms and opened two permanent super-courtrooms in Manchester and Loughborough so that there are more courtrooms available across the court estate.
Simon Baynes
Will the Minister give the figures for the backlog in north Wales, where my constituency of Clwyd South is located, and for Wales overall? Will he also comment on any particular factors that are affecting those figures in Wales?
Mike Freer
As of December 2022, the outstanding case load in north Wales was 337 and the outstanding case load in Wales was 2,106—a 34% increase from pre-pandemic levels. As with every region, the outstanding case load in Wales has been impacted by the pandemic and the disruptive action by the Criminal Bar Association. As I have said, the Government remain committed to reducing the outstanding case load in the Crown courts, working with partners across the system.
Mark Pawsey
The Government have introduced the use of pre-recorded evidence in rape trials and are trialling an extension for other cases to allow parties to provide information while memories are fresh. My attention has been drawn to a case that predates the roll-out, in which those involved had to wait three years to give evidence. What assessment does the Minister have of the effectiveness of pre-recorded evidence in speeding up the justice process?
Mike Freer
My hon. Friend raises a good point. On the roll-out of pre-recorded cross-examination—known as section 28—to victims of sexual and modern slavery offences in all Crown courts in England and Wales, this has been available to children and vulnerable adults since November 2020. It is particularly important with those vulnerable witnesses to ensure that their evidence is taken while it is fresh. The impact of that on speeding up cases is important. Rolling it out across the whole estate may mean that the impact of that evidence is diminished. That is why it is part of a programme—not just section 28 video recording, but the work we are doing on capacity and judicial recruitment. It is a package.
Alex Cunningham (Stockton North) (Lab)
I wonder whether the Minister has considered the Magistrates Association report “Inaccessible courts: a barrier to inclusive justice”, which shows that magistrates courts in England and Wales have serious accessibility failings. It says that impacts on the efficiency and fairness of the justice system and undermines efforts to recruit a more diverse magistracy. One in five magistrates courts do not have level access. In 30% of courts, magistrates with a disability cannot sit in some or all of the courts in the complex. A third of courts do not have accessible toilets for them, and half do not have hearing loop systems installed or operating. Just what has happened to all that cash the Government claim to be investing? It certainly is not addressing the basics.
Mike Freer
The Government are committed to improving the whole court estate, not just magistrates courts. On diversity, we are investing £1 million. On the accessibility of our physical estate, I have taken a particular interest in ensuring that those magistrates who have specific needs are supported. I can reassure the hon. Gentleman that investment in our court estate will continue to address all the issues that we face.
Andrew Selous (South West Bedfordshire) (Con)
The Minister of State, Ministry of Justice (Damian Hinds)
We are committed to recruiting 5,000 additional prison officers across the public and private estate by the mid-2020s. We have seen recent improvements in recruitment, with 655 additional full-time equivalent officers appointed between December 2022 and March 2023 alone.
Andrew Selous
At risk of being potted, kettled or attacked with toothbrushes that have razors fastened to the end, the work of a prison officer is not for the faint-hearted, yet their role is essential to keeping us free. We have just celebrated Armed Forces Week, and rightly so—I say that as a former veteran—but it troubles me that we do not have a similar week to celebrate the work of prison officers. We do not do enough to recognise their service to keep us all safe and free, across society. Can we change that, please, and urgently?
Damian Hinds
My hon. Friend is right about the paramountcy of safety for our brave staff, which is why we have been investing in security, body-worn cameras, PAVA spray and so on. He is also right that prison officers are often hidden heroes in our society, and they do not always get the recognition they deserve. As it happens, this evening is His Majesty’s Prison and Probation Service staff awards, which I am looking forward to attending, and I am keen to find more ways to publicly recognise these incredible people for what they do. His suggestion of a Prison Officers Week is interesting. More generally, I hope all colleagues will take the opportunity to visit their local prisons and to speak directly to prison officers.
John Cryer (Leyton and Wanstead) (Lab)
According to the Prison Officers Association, the turnover rate among officers is still very high. What discussions has the Minister had with the POA about not only recruitment but retention?
Damian Hinds
I have spoken to the POA about recruitment and retention, as the hon. Gentleman would expect. We have recently seen about a 1 percentage point improvement in the resignation rate, which is significant, but we have to make sure that all aspects of the job are right. Of course it is about pay and conditions, but it is also about things such as safety and making sure prison officers have the right support for what can be, mentally, a very difficult and straining job.
Selaine Saxby (North Devon) (Con)
The Minister of State, Ministry of Justice (Edward Argar)
In the rape review action plan, we committed to expanding our victim support provision throughout the court process for victims of these dreadful crimes. We are more than quadrupling funding for victim and witness support services from 2009-10 levels, increasing the number of independent sexual violence advisers and independent domestic violence advisers to 1,000. We completed the roll-out of section 28 measures in September 2022, and we continue to deliver our enhanced specialist sexual violence support programme in selected Crown courts.
Selaine Saxby
Can my right hon. Friend confirm what measures are taken for sexual assault and rape victims in remote, rural or coastal communities, where trials may take place a long way from their home?
Edward Argar
I am grateful to my hon. Friend, who is a champion for rural and coastal communities in all aspects. The Government take seriously the experience of victims across the country, no matter where they live. In addition to the measures I have just set out, the Crown Prosecution Service supports victims of crime from remote and rural areas, with victims being able to claim back travel expenses when they need to travel far to attend court. We recognise the challenges of rurality, which is why the MOJ’s sexual violence service design and delivery team has regular engagement with the National Rural Crime Network and is a member of the NRCN’s domestic violence working group.
Anna McMorrin (Cardiff North) (Lab)
This week, it has been three years since the harm panel’s report found a serious risk of harm to victims of domestic abuse and their children in the family courts, yet we have seen that nothing has changed. Heartbreakingly, the experiences of victims in the family courts all read the same: the mother criminalised, the children ignored, the father excused. One 10-year-old girl disclosed to the guardian assigned to her case that her father had sexually abused and assaulted her. The guardian dismissed this and, instead, read a book to her, saying that her mother had made it up and her father had done nothing wrong. With no definition of rape or consent in statute in the family courts, when will the Government put a stop to this national scandal?
Edward Argar
I am grateful to the shadow Minister for her question. She will be aware that Lord Bellamy, whose portfolio covers the family courts, is looking at this issue carefully. Although it is not in my portfolio, I understand that two of the three limbs of the report she mentioned have already been implemented, and we anticipate implementing the final element later this year.
Catherine West (Hornsey and Wood Green) (Lab)
Alex Davies-Jones (Pontypridd) (Lab)
Liz Twist (Blaydon) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Tackling violence against women and girls is a driving mission of this Government, and we are delivering on it in three ways. First, we have created and are creating new offences, such as revenge porn, and coercive and controlling behaviour, so that abusers have no place to hide. Secondly, we are increasing penalties so that offenders are not just convicted and disgraced, but punished in a way that fits the crime and protects victims. Thirdly, we are supporting victims by quadrupling the funding for victim and witness support services.
Catherine West
Today, tragically, 300 women in Britain will be raped. Under this Government’s watch, in three of those cases there will be a charge. Under this Government’s watch, charging numbers have plummeted. What are the Government going to do about it?
Alex Chalk
What we are not going to do is come up with statistics that are completely untrue. This is incredibly important, because people listen to what the hon. Lady has to say and it is simply wrong to send a message out that people are not being prosecuted. Let me make one thing crystal clear: more people have been prosecuted for rape in the last year for which statistics are available than was the case in the last year of a Labour Government. That is an important point. If I may, I will read out something so that she understands this, because people are getting justice all the time. It relates to one of the new Nightingale courts that we have set up, in Cirencester. Let me tell her what happened when two victims spoke out as their rapist had been sent to prison for 25 years recently. Victim B said:
“I would just like to say how happy I am with the whole criminal justice system. I wasn’t sure whether to go”—
to the police—
“due to being scared and thinking nobody would believe me. If there is anyone out there with the same situation I encourage them go forward as soon as possible”.
Of course there is more to do, but people are being convicted, people are being put on trial and rapists are being punished.
Alex Davies-Jones
The Domestic Abuse Act 2021 is vital. It finally introduced a full statutory definition of domestic abuse and banned the horrendous cross-examination of victims by their abusers. However, the Act also rolled out controversial polygraph lie detector testing of high-risk domestic abuse perpetrators. Will the Secretary of State meet me and other members of the all-party parliamentary group on perpetrators of domestic abuse to discuss our concerns that polygraphs are pure pseudoscience and have no place in otherwise vital legislation?
Alex Chalk
The hon. Lady raises an important and sensitive issue. She is right to say that polygraph results have to be handled with care. That said, that testing has been shown to be one of a number of important risk management tools in monitoring the compliance of high-risk sexual offenders with their licence conditions. In the way it is used by the probation service, polygraph is 80% to 90% reliable when indicating deception. However, she raises this important point and of course I would be happy to meet her to discuss it further.
Liz Twist
It is two years since the Government’s rape review, which the Secretary of State referred to earlier, but too many rape victims are still being failed by the criminal justice system, at every stage of the process. Although it is good to hear those positive reviews, too many women are not experiencing this. So what more are the Government going to do to step up the work to ensure that dealing with rape is a priority?
Alex Chalk
The hon. Lady is absolutely right to talk about this issue, as indeed are all right hon. and hon. Members. All I respectfully plea for is some balance in the way we discuss this sensitive issue. Let me say something on the recovery that has taken place. The number of cases passed by the police, after having investigated the matter, to the Crown Prosecution Service for consideration of charge is up by more than 130%; the number of cases where the CPS decides to charge is up by more than 90%; and the number of cases that come to the Crown court is up by more than 120%. I am not suggesting that the job is done—of course it is not, and we need to support victims. That is why we invest in independent domestic violence advisers and independent sexual violence advisers; why we ensure that section 28 is rolled out; and why we have the specialist sexual violence support services in court. That is why we do all these things, and will do more: it is because we want to ensure justice for victims of this appalling crime.
Chris Elmore (Ogmore) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
Following a merger of IT systems, there is no current data on average waiting times, but the outstanding caseload has reduced from 48,000 in February to 41,000 in March this year because of an increase in the number of sitting days. As well as the increased sitting day allocation, we continue to support and reform the employment tribunals process and to make progress in reducing the backlog.
Chris Elmore
Members of my trade union, the Union of Shop, Distributive and Allied Workers, who submitted claims for a protective award in 2020, after being made redundant without consultation, are still waiting for the employment tribunal to hear their claim. They are owed thousands of pounds in respect of failure to consult before redundancy and it cannot be just that, three years on, they are still no closer to receiving compensation. Will the Minister look into the case, to ensure that their collective claim can be dealt with by the Tribunals Service as soon as possible, because it is not acceptable that it has not been dealt with three years on?
Mike Freer
The tribunals are operationally independent, of course, but I would be more than happy to investigate the case that the hon. Gentleman mentions and see whether there are any issues causing the delay.
Mr Philip Hollobone (Kettering) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Our prisoner transfer agreement with Albania came into force in May 2022. To build on that, as I have mentioned before, we announced a new arrangement with the Albanian Government in May this year to speed up prisoner transfers to Albania of the most serious offenders. The Government will energetically pursue bilateral agreements with EU partners and wider-world partners wherever possible.
Mr Hollobone
Will the Secretary of State confirm that out of a prison population of 85,000, about 10,000 prisoners—12%—are foreign national offenders? He said earlier that we have over 100 prisoner transfer agreements, but only a handful of them are compulsory, where we send prisoners back whether they want to go back or not. Can we have more compulsory prisoner transfer agreements with countries that have a large number of nationals in our jails?
Alex Chalk
I thank my hon. Friend for raising this issue consistently—he was raising it when I first came to the House in 2015, and he is absolutely right to do so. Yes, we will continue to work on the issue. At the risk of stating the obvious, those agreements have to be agreed to by the other nation, but I can assure him that those matters are getting very close focus and attention.
Ian Byrne (Liverpool, West Derby) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I am pleased to be able to say that we are committed to bringing forward legislation to enable offenders to be compelled to attend their sentencing hearing. Offenders who rob innocence, betray lives and shatter families should be required to face the consequences of their actions and hear society’s condemnation expressed through the sentencing remarks of the judge.
Ian Byrne
I have recently tabled an early-day motion to put it on record in the House formally the pain that the wilful absence of an offender at a sentencing hearing causes bereaved families. Will the Secretary of State explain why provisions cannot be included in the Victims and Prisoners Bill to change that? Will he meet me and Cheryl Korbel to discuss when legislation will be brought forward and how bereaved families can be at the heart of shaping a change in the law, to ensure that no bereaved family who has to suffer in the fight for justice will face that situation at sentencing ever again?
Alex Chalk
I thank the hon. Gentleman for raising this case and for rightly identifying the anguish, pain and insult that families feel when a cowardly defendant refuses to attend court. On his specific question, he will understand that there are issues of scope and all sorts of things as to whether legislative measures can be included within certain Bills, but of course I will be happy to discuss that with him. The central point, however, is that there is a cross-party belief that there needs to be some legislative progress—we are committed to that as well.
Ellie Reeves (Lewisham West and Penge) (Lab)
I have listened to what the Secretary of State has said, but the Government have had 13 years to compel criminals to attend courts to hear their sentences. The Government’s failure to do that has meant that in the last year alone the killers of Olivia Pratt-Korbel, Zara Aleena and Sabina Nessa have all avoided hearing their sentences, and avoided hearing the impact that their callous crimes have had on the families left behind. Will the Government urgently make this simple change, and stop cowardly offenders from evading their sentencing hearings?
Alex Chalk
The hon. Lady raises an important point by referring to those three cases. What concerns me is that one defendant’s actions could be copied by others, who take the view that that is somehow a way of getting away from the consequences of their actions. She makes it a political point—we are in the House of Commons, so I totally understand that—but I could equally make the point that the legislation was not changed pre-2010 either. We have seen the anguish caused by these actions, so let me make the point that I want to know that when an offender is sitting in a cell, trying to get to sleep when the rest of the world is getting to sleep, the judge’s words of condemnation are ringing in their ears. There are victims who find it hard to ever recover, so why should that defendant ever be able to sleep soundly in their bed?
Marion Fellows (Motherwell and Wishaw) (SNP)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
The Illegal Migration Bill will break the business model of people-smuggling gangs, deter migrants from making dangerous channel crossings and restore fairness to our asylum system. The Bill will provide a robust but fair legal framework to remove illegal migrants swiftly while ensuring that proper opportunity to appeal remains. I am working closely and regularly with Cabinet colleagues on the implementation of the Bill.
Marion Fellows
I thank the Minister for his answer. The Illegal Migration Bill would prevent UK courts from granting an interim remedy to delay the removal of an individual while their judicial review claim is heard. Is that not a fundamental attack on the rights of an individual to access the courts? Does he really believe that an asylum seeker will be able to participate effectively in a judicial review if they are already in Rwanda?
Alex Chalk
This is a fair country and we will always take what proper steps we should to ensure that individuals’ rights are upheld. I respectfully say this: as well as considering those migrants who come across the channel, the hon. Lady needs to think about those migrants on the north coast of France who are thinking about whether to put their lives into the hands of people traffickers. We need to send a clear message that they should not do so. I also say respectfully that she should think about the rights of the British people who are having to fund a great deal of this. We will be fair, but we will also be firm and make no apology for either.
Anna Firth (Southend West) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Since the last oral questions, I have brought forward measures in the Economic Crime and Corporate Transparency Bill to tackle strategic lawsuits against public participation—so-called SLAPPs—to give courts the power to dismiss lawsuits aimed at gagging campaigners and journalists who oppose financial misconduct. In the past week I have met victims and their families, including Georgia Harrison, to discuss new measures to tackle intimate image abuse, and Farah Naz, the aunt of tragically murdered Zara Aleena, to discuss compelling offenders to attend their sentencing hearing. I visited Snaresbrook Crown court, and HMP High Down where I opened a brand new DHL logistics workshop, which is supporting prisoners to learn the skills they need to turn their lives around.
Anna Firth
According to the Government’s own statistics, 18% of knife possession offences involve juveniles, which is of great concern to my constituents in Southend West. What consideration is being given to increasing the sentence for those supplying a knife to an under-18, which is currently only six months? Should that not be the same as possession of a knife, which is currently four years?
Alex Chalk
We keep all these matters under review and my hon. Friend will know well that the role of a knife in the commission of criminal offences is already reflected in the criminal justice sentencing rules. For example, the starting point for a murder that is committed with a knife that is brought to a scene is considerably higher than it is in other circumstances. We also wish to ensure that knives do not get into prisons, which is why, as part of our £100 million security investment programme, we have funded enhanced gate security in 42 high-risk prison sites. On the issue of sentencing, we keep all matters under review, and I would be happy to discuss that with my hon. Friend.
Steve Reed (Croydon North) (Lab/Co-op)
May I add my congratulations to Dame Sue Carr on her historic appointment?
When he was Chancellor, the current Prime Minister let the murderous boss of Russia’s mercenary Wagner Group, Yevgeny Prigozhin, bypass sanctions so that he could abuse our courts to silence a British journalist who was exposing his crimes. Why did the British Government side with this Russian war criminal over the British press?
Alex Chalk
No, no, no—that is to completely misrepresent the situation. As the hon. Gentleman knows, we have one of the most robust systems of sanctions; whether in an individual case money can be released is at the discretion of an arm’s length body. Of course the Chancellor was not seeking to do that, and to suggest that, I am afraid, is discreditable.
Steve Reed
What is disappointing is that the Government’s proposed reforms in the economic crime Bill would still allow warlords to use these tactics to silence journalists in the British courts, but there is another area of concern as well. Will the Secretary of State confirm—because this is an area of doubt—whether the reforms he is proposing would prevent wealthy tax dodgers from silencing journalists in court, as the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) threatened to do when he was Chancellor of the Exchequer?
Alex Chalk
I hope the hon. Gentleman will join me in welcoming the measures on SLAPPs, because it is very important to ensure that those people do not use their financial advantage to try to snuff out freedom of speech, legitimate investigative journalism and all the things we want to see in a free and fair society. By common consent, the measures we are introducing will make a very significant difference. We remain open to going further and to considering further matters, but we need to take it in stages. We are looking to manage the balance between freedom of speech and people’s right to access justice. These are important steps and have been widely welcomed, so it is right to see how they bed in.
Henry Smith (Crawley) (Con)
The Minister of State, Ministry of Justice (Edward Argar)
My hon. Friend is absolutely right to highlight this issue. We yesterday tabled an amendment to the Online Safety Bill that would create a new offence of encouraging or assisting serious self-harm, whether by verbal or electronic communications, publication or correspondence. That fills a gap in the law and, together with the broader regulatory measures in the Bill, it will help to protect people from such content. It remains our intention, however, when parliamentary time allows, to expand the offence to cover encouragement or assistance given by means other than such communications, which are currently out of scope of the Bill.
Alison Thewliss (Glasgow Central) (SNP)
Anyone’s Child has a mass lobby of Parliament today, calling for reform of the UK’s failed and outdated drugs laws. Will a Justice Minister be meeting anybody from Anyone’s Child to hear their case for supporting, not punishing, those who take drugs and their families?
Alex Chalk
I do not have plans to do so, I confess, but if the hon. Lady is to have those conversations, I invite her to consider writing to me afterwards; if there are matters we can take up, I would be happy to do so.
Sir Edward Leigh (Gainsborough) (Con)
Alex Chalk
No one is a more doughty defender of the people in his constituency who are concerned about matters relating to Scampton than my right hon. Friend. This is principally a Home Office matter, as he knows, but the points he has made will have reverberated not just in this Chamber but, I am sure, all the way down the road to Marsham Street.
David Linden (Glasgow East) (SNP)
Alex Chalk
We have already taken important steps to recalibrate disclosures so that they have to take place only when absolutely necessary, but the hon. Gentleman is right about employment. A prisoner who gets into employment is 10% less likely to commit an offence. I am delighted to see, through the huge efforts of employment advisory boards, employment advisers and employment hubs in custody, that the proportion of offenders in employment six months after release has doubled in the past year. A lot of work has been done, but of course there is further to go.
Karl MᶜCartney (Lincoln) (Con)
Earlier, the Minister was asked about the backlog of criminal court cases and answered at length regarding Crown courts. On behalf of magistrates and magistrates court staff, can we have an update on the situation with magistrates courts, please?
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The magistrates have continued to make good progress in reducing the backlog, and that is a testament to the work they do on our behalf.
Paula Barker (Liverpool, Wavertree) (Lab)
The Minister of State, Ministry of Justice (Damian Hinds)
The work that our probation service does is incredibly important and, like the work of prison officers, it often goes unseen. There have been recruitment challenges throughout society, as the hon. Lady will know, but we have been focusing particularly on recruiting into probation. I am pleased to report that, over the past couple of years, we have exceeded our target, which was already stretching to 4,000. In regions such as London, where recruitment has been particularly difficult, we have had encouraging signs, including, for example, 144 new trainee probation officers starting in London in 2022-23. Their ongoing training and professional development will be incredibly important over the next few years.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
I wonder what conversations the Lord Chancellor can have with the Chief Coroner about the poor performance of the Somerset coroner’s office, where the waiting time went up from 23 weeks to 31 weeks in 2022 against a decrease in the rest of the country. That involves worse things for individual constituents. Mrs Deborah Cox has been waiting nearly four years for the coroner to get on with the job of providing an answer. That is deeply distressing for families, and I wonder what can be done.
Mike Freer
My right hon. Friend has shown great interest in the work of coroners. They have judicial independence, but I am more than happy to raise his concerns with the Chief Coroner to see if any specific issues in Somerset are causing concern to his constituents.
Jeff Smith (Manchester, Withington) (Lab)
Damian Hinds
What the hon. Gentleman said is just not the case. He is absolutely right that securing accommodation on release is incredibly important—we have just had a similar conversation about employment, but accommodation underpins so much else, including the ability to get into work—but the tier 3 accommodation that he mentions had, by February of this year, already supported more than 5,000 people who would otherwise have left prison without a home to go to.
Andy Carter (Warrington South) (Con)
Further to the Minister’s comments about the progress made in magistrates courts, may I thank him for recently meeting members of the Cheshire bench who came to Parliament? Will he update the House on the decision to pause the additional sentencing powers granted to magistrates in 2022? Does he agree with me and members of the Magistrates Association that restoring those powers could free up about 1,700 extra Crown court sitting days each year?
Mike Freer
The change in sentencing powers was no reflection on the magistrates, whose work is highly valued. The Department continues to keep the sentencing powers under review. I give my hon. Friend the commitment that the issues raised in that meeting with his local bench are being progressed through the Department
Helen Hayes (Dulwich and West Norwood) (Lab)
Alex Chalk
The hon. Lady is absolutely right that people should have the opportunity to see justice done, and justice is done not simply by getting an injunction—important though that may be—but by ensuring that an abuser hears the clang of the prison gate in appropriate circumstances and if that is what the court orders. I do not know specifically what happened in that case, but I can say that, under the victims code, individuals have the opportunity to raise issues with the CPS. Supposing that they were seeking to drop a case, there is now a victim’s right to review—to say to the CPS, “Look again at this.” Equally, there is the opportunity for court familiarisation visits or special measures applications. That is all about ensuring that, where they want to, victims have their day in court and see justice done.
Jonathan Gullis (Stoke-on-Trent North) (Con)
My understanding of the law presently is that if someone is driving a motor vehicle and they kill an individual, their blood can be taken without their consent, but the blood cannot be tested unless the defendant gives their consent, and if the defendant refuses to give consent, that is accepted as guilt in the eyes of the law. That meant that Claire, the mother of six-year-old Sharlotte-Sky, who tragically lost her life in Norton Green due to John Owen, who was on drink and drugs, waited over a year before she got her day in court and justice. Will the Lord Chancellor back my campaign for Sharlotte’s law to be introduced?
Alex Chalk
My hon. Friend has been a doughty champion on this issue and he continues to raise it. I suggest that he and I have a conversation in due course.
Cat Smith (Lancaster and Fleetwood) (Lab)
When my constituent reported her rape to the police 14 months ago, she also revealed that the rape had been videoed by the perpetrator. The police are now in possession of the mobile phone that this has been recorded on, but she is still waiting for her justice and her day in court. Could the Minister say how long my constituent might expect to wait to get justice?
Edward Argar
The hon. Lady will appreciate that I am unable to comment on the specifics of a case, and it would probably be inappropriate to do so in the Chamber, but if she would like to write to me with the details that she cannot share on the Floor of the House, I am happy to look at them.
James Sunderland (Bracknell) (Con)
Waitrose is based in my constituency, and in recent meetings with the partners and with other supermarkets, it has raised with me the scourge of shoplifting. Organised gangs operating with impunity across the UK are engaging in retail crime. They are often inflicting violence against workers using weapons, and they are costing supermarkets a fortune. Can we do more work on the deterrent effect of greater sentencing, and may I urge the Minister to look at whether the provisions of the Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) Act 2021 could be rolled out in England too?
Alex Chalk
Let me make a couple of points. First, increasing the number of police officers means that there is more resource to try to ensure that the people who commit this crime—and it is not a victimless crime, by the way—are brought to book. Secondly, I am proud of the fact that we have doubled the maximum sentence for assault on an emergency worker, so that defendants can be properly punished where they have assaulted police officers, ambulance staff or potentially people who work in supermarkets, though I would query whether they are in scope.
Sarah Green (Chesham and Amersham) (LD)
One of the concerns raised with me by several victims of domestic abuse has been their experience of victim blaming in the criminal justice system. Can the Secretary of State outline what steps his Department is taking to tackle victim blaming and provide better support to survivors of domestic abuse and sexual violence?
Edward Argar
Significant work is under way across the system to tackle victim blaming and disproportionate attention on victim credibility. As part of that, we developed Operation Soteria, which ensures that officers and prosecutors are focusing their investigations on the behaviour and offending pattern of suspects, rather than on subjective judgments of victims’ credibility. I am happy to meet the hon. Lady if she would like to discuss this further.
Sir Robert Neill (Bromley and Chislehurst) (Con)
Will the Lord Chancellor confirm that it remains the Government’s intention to update and modernise our human rights law as necessary, but to do so while firmly remaining in adherence to the convention on human rights?
Alex Chalk
Yes, that is correct. Having carefully considered the Government’s legislative programme in the round, I can inform the House that we have decided not to proceed with the Bill of Rights, but the Government remain committed to a human rights framework that is up to date, fit for purpose and works for the British people. We have taken and are taking action to address specific issues with the Human Rights Act 1998 and the European convention, including through the Illegal Migration Bill, the Victims and Prisoners Bill, the Overseas Operations (Service Personnel and Veterans) Act 2021 and the Northern Ireland Troubles (Legacy and Reconciliation) Bill, the last of which addressed vexatious claims against veterans and the armed forces. It is right that we recalibrate and rebalance our constitution over time, and that process continues.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Rhianon Bragg, who was held hostage by her ex-partner, has faced multiple errors and omissions in her treatment as a victim. Given the catastrophic failings she has experienced in the criminal justice system, and with a parole hearing on 12 July, will the Secretary of State now review this case in full and support Rhianon’s call for an entire audit of the process from the victim’s perspective?
Alex Chalk
I am afraid that I did not get the first part of the right hon. Lady’s question, but if she writes to me, I will come back to her.
Rob Butler (Aylesbury) (Con)
I recently visited Aylesbury Prison, where I was very impressed with the excellent work that is being done at the establishment as it has transformed from being a young offenders institution to a category C adult jail. One particular challenge, though, is the prevalence of psychoactive drugs such as spice. What progress is my right hon. Friend making on combating this appalling and deadly substance?
Damian Hinds
I am grateful to my hon. Friend, both for the particular interest he takes in his local prison and for using his much broader experience across the system. He is right to identify the issue with keeping drugs out of prisons. Different substances come and go to some extent, but particularly for spice, the investment we have made in drug trace machines for post—I think there are now over 100 of those—has been very important.
Matt Rodda (Reading East) (Lab)
The Ministry of Justice has been trying to sell Reading jail to a commercial developer for some time, but our community hopes that it can instead be turned into an arts hub. Can the Minister update me on that sale, and will he meet with me and constituents on this important matter?
Damian Hinds
I am grateful to the hon. Gentleman for his question. He and I have met, along with the other MP for Reading, my right hon. Friend the Member for Reading West (Sir Alok Sharma). As he is aware, a sale is progressing, and of course there is commercial sensitivity attached to that, but I can assure the hon. Gentleman that assurances for purchase will be required by solicitors and all required due diligence will be undertaken. I will be happy to talk with him further.
Mike Amesbury (Weaver Vale) (Lab)
Louise and her family are facing unnecessary and quite challenging delays in the local coroner’s service in Cheshire. This seems to be happening far too often at the moment. What more can Ministers do to speed up that process?
Mike Freer
As the coroners are independent judicial office holders, we can continue to raise particular cases to find out what specific issues are holding back those cases. If the hon. Gentleman writes to me with the details of that case, I will ask the Chief Coroner to investigate.
Andy Slaughter (Hammersmith) (Lab)
Today, Inquest and 40 other justice organisations launch a campaign for a national oversight mechanism to systematically learn the lessons of inquests, inquiries and investigations from Grenfell to deaths in custody. Do the Government support that initiative?
Mike Freer
I am more than happy to look at any specific proposals to see how we can improve the process of inquests and inquiries. Of course, my door is open if the hon. Gentleman wishes to have a more detailed discussion.
Jim Shannon (Strangford) (DUP)
I am never one to miss an opportunity—thank you very much.
Does the Minister believe that there is a greater role for youth justice agencies to be involved at early stages, eliminating the need for repeated court dates if arrangements can be made with victims of crime and the offender support network to agree a mechanism of reparation and rehabilitation to reduce small offence cases in court? Do it simply—that is really what I am asking.
Alex Chalk
As always, the hon. Gentleman raises a really important issue. There can be some cases where reparation is exactly the right way to proceed, but it is case-specific. For some victims, peace and closure comes from meeting the defendant and understanding more about what prompted the crime, but other victims simply do not want that at all. It has to be taken on a case-by-case basis, but I will just make this point: one of the unnoticed things that has happened over the past 10 years is that the number of children in custody has gone down. We are diverting people from custody wherever possible so that they can have a crack at a decent future.
Illegal Migration Bill: Economic Impact Assessment
(10 months, 2 weeks ago)
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Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the publication of the impact assessment on the Illegal Migration Bill.
The Minister for Immigration (Robert Jenrick)
The Illegal Migration Bill is critical to stopping the boats. Its intent is clear: if someone comes to the UK illegally, they should be detained and swiftly returned to their home country if safe, or relocated to a safe third country such as Rwanda. The impact assessment published yesterday makes clear that inaction is simply not an option. The volumes and costs associated with illegal migration have risen exponentially, driven by small boat arrivals. Unless we act decisively to stop the boats, the cost to the taxpayer and the damage to society will continue to grow.
The asylum system currently costs £3.6 billion a year and £6 million a day in hotel accommodation, but that is not the true cost of doing nothing. As this impact assessment shows, the cost of accommodating illegal migrants has increased dramatically since 2020. If these trends continued, the Home Office would be spending over £11 billion a year, or £32 million a day, on asylum support by the end of 2026. In such a scenario, the Bill would only need to deliver a 2% deterrence in arrivals to enable cost savings.
The figure of £11 billion is an extraordinary amount of money—nearly 10 times the amount of money the taxpayer spent on the asylum system as recently as 2021—and anyone opposing this Bill needs to explain how they would pay those costs. Given the Labour party’s opposition to this Bill, it represents another £11 billion black hole in its fiscal plans.
The impact assessment suggests that passing this Bill could directly save the UK taxpayer over £100,000 for every illegal migrant deterred from making a small boat crossing. It also finds that the Bill could lead to a much wider set of benefits—including reducing pressures on local authorities, public services and the housing market—that could not be monetised, meaning that the savings will in fact be much greater.
The British public are clear that they want to stop the boats. That is why we must keep using every tool at our disposal to do just that and to secure our borders, and why this Bill must become law.
Yvette Cooper
I was going to ask if the Immigration Minister had seriously signed off this garbage of an impact assessment, which no self-respecting Minister could possibly think was serious, but actually the nonsense he has just said is even worse and even less coherent. This is not an impact assessment. According to the Government’s own guidance, it is supposed to include the
“costs, benefits and risks...and a consideration of a range of options.”
However, we have something that does not even include some of the most basic options to assess, such as speeding up the asylum system and making savings that way. Instead, it says that this impact assessment
“does not attempt to estimate any costs of implementing the Bill…or estimate the volumes of individuals that will be impacted by the Bill.”
Really, what is the point of it, given that the document itself admits that people “may not be deterred” by any of this, and it cannot answer the most basic questions? I have never seen anything more clueless and chaotic.
The impact assessment does provide evidence of the scale of Conservative failure. The cost for one person in the asylum system for just one night has gone up fivefold in four years. That is just the cost of Tory mismanagement. It has gone up faster than mortgages or energy bills, and it has even gone up faster than the price of cheese. It is all Tory Home Office mismanagement. It shows the shocking fact that people are now staying in the asylum system for four years, and there is no alternative to try to speed up the system or to look at that.
The Government do say that it will cost £169,000 per person to pay another country to take asylum decisions for us. So far, the Government have sent more Home Secretaries than asylum seekers to Rwanda, but how many people are they actually budgeting for? The Prime Minister says he wants to send everyone, so can the Minister tell us where the billions of pounds it would cost to send everyone to Rwanda this year will come from, and if not, can he tell us how many he is really budgeting for and what in fact is going to happen to everyone else instead?
The impact assessment says it costs £7,000 per person to keep someone in detention for 40 days. That is more than double the current average cost of keeping people elsewhere in the asylum system, so where are the hundreds of millions of pounds for the detention plan going to come from, and where are these detention facilities going to come from? The Minister has not attempted to cost speeding up the system and he has not attempted to cost what we really think will happen, which is that tens of thousands more people will be in indefinite detention or indefinite asylum accommodation. The Treasury bailed out the Home Office by £2.4 billion last year. How much is it going to be this year?
The Government have crashed the economy, and now they have crashed the asylum system too. We have an impact assessment that shows the Home Office does not have a clue and the Treasury does not have a grip, and the Prime Minister who claims to be Mr Fix-It is instead Mr Muck-It-Up. The country deserves better than this.
Robert Jenrick
The right hon. Lady misses the point entirely. The impact assessment bears out the cost of the current broken system and makes it clear that there is no option but to completely overhaul our asylum system and make it fit for the decades ahead. The reality, as those of us on the Government Benches see it, is straightforward: if people continue to cross in small boats, the cost to the taxpayer in one form or another will continue to increase and that is a completely unacceptable outcome—but it is the one that can be expected with Labour’s recklessly naive approach to border security.
When the right hon. Lady said that this document was “garbage” and “clueless”, I thought she was referring to her own five-point plan to tackle illegal migration, because we cannot grant our way out of the problem, we cannot simply arrest our way out of this and do nothing to dismember and dismantle the business model of the gangs. We cannot provide a safe and legal route to every single person eligible for refugee status or every economic migrant who views this country as a better place, and we certainly cannot reheat the tired old policies like the Dublin convention that she looks back on through her rose-tinted spectacles. Even members of the European Union have moved on from that, but not the Labour party. She cannot even bring herself to call these unnecessary and dangerous journeys what they are under British law: illegal.
The truth is that Labour’s do-nothing approach to stopping the boats is the fastest route to more crossings, greater taxpayer spending and more pressure on our communities. Left unchecked, the cost will spiral to £11 billion by 2026. That is the cost of a Labour Home Secretary; that is the cost of Cooper. Only the Conservative party will truly tackle the root cause of the problem, not just the symptoms. We are determined to secure our borders and stop the boats, and the British public can rely on us to do so.
Tim Loughton (East Worthing and Shoreham) (Con)
The Opposition seem to think that the Rwanda scheme is purely about displacing people who have entered illegally from Kent to Rwanda. In fact, it is about deterring them from coming in the first place and instead encouraging them to use the safe and legal routes that are now in the Illegal Migration Bill, because it will become a lottery whether someone ends up on a plane to Rwanda or in a hotel in Kent. Given that the French authorities admitted to the Select Committee on Home Affairs that when the Rwanda scheme was first announced there was a surge in migrants approaching the French authorities about regularising their position in France rather than hazarding the channel crossing, what discussions has my right hon. Friend had with the French and Germans, who have expressed interest in a Rwanda-type scheme, about having a joint multinational scheme to get this thing up and running?
Robert Jenrick
My hon. Friend is absolutely right. There is a view expressed by some, mainly on the left, that the UK is somehow an outlier in pursuing a policy like Rwanda. I can tell him, having spoken to our European counterparts and Home Affairs and Interior Ministers in north Africa and beyond, that leaders across the world are looking to the UK not as an outlier but as a leader in this field. They are looking to the Rwanda policy as one of the most innovative and comprehensive approaches to a problem that everyone is facing. In an age of mass migration, with millions of people on the move, it is right that the UK leads. We will invest in border security, and that is the difference between us and the Labour party. [Interruption.] The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) does not want to invest in border security; we do. We will pursue the Rwanda policy, we will secure our borders, and other countries will follow our lead.
Madam Deputy Speaker (Dame Rosie Winterton)
I call Scottish National party spokesperson.
Alison Thewliss (Glasgow Central) (SNP)
The Tory Illegal Migration Bill has almost completed its journey through Parliament and only yesterday did the Home Office deign to publish this ludicrous economic impact assessment, which is as revealing in what it omits as what it includes. There is nothing about the backlog they have created; it is all about the boats.
We know the cost of this cruel Tory ideology is £169,000 per soul deported, costing more than if people were allowed to stay. We know the figures for asylum processing claims, which are estimated to take four years, but we do not know the set-up costs for the wildly expanding detention estate or those left in immigration limbo or the staffing in the Home Office and the Ministry of Justice to deal with this.
The Government say that this will save money, because victims of modern slavery will no longer be entitled to support. How despicable. This is an egregious waste of public money in a cost of living crisis, and it fails to recognise the value of human potential. We have just celebrated the Refugee Festival in Scotland—an incredible experience that celebrates the contribution of those who come to our shores for sanctuary. It is increasingly evident that the only way that Scotland can uphold our humanitarian values is by regaining our independence. As Winnie Ewing would have it, stop the world, Scotland wants to get on.
Robert Jenrick
I am delighted that the hon. Lady celebrated Refugee Week. I do not know if any refugees came to it, because the SNP does not house refugees in Scotland. The point is that we are proud of our record as a country. Since 2015, under a Conservative Government we have welcomed into the United Kingdom more than half a million people seeking genuine sanctuary from war and persecution—individuals coming from Hong Kong, Ukraine, Syria and Afghanistan. SNP Members continuously pose as humanitarians, but we all know the truth is that at every single opportunity, they fail to live up to their fine words. If they cared about this issue, they would welcome asylum seekers into their own part of the UK, but they do not.
Sir Desmond Swayne (New Forest West) (Con)
When it works, it will be a bargain, won’t it?
Robert Jenrick
I agree with my right hon. Friend. Border security is the first priority of any Government. We understand that, and that is why we are investing in it and ensuring that we can stop the boats. I am only surprised that the Opposition care so little about our national security.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Chair of the Home Affairs Committee.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Two weeks ago, when the Home Secretary gave evidence at the Home Affairs Committee, I asked her when the impact assessment for the Illegal Migration Bill would be published. While I welcome the fact that it has been published today, or last night, it is after the Bill has completed all its stages in the House of Commons and is three quarters of the way through the House of Lords. That is wholly unsatisfactory for Parliament to undertake its role of scrutinising Government legislation. At that Select Committee sitting, the Home Secretary also said:
However, I would also say that to my mind it is pretty obvious what the economic impact of the Bill will be. We will stop spending £3 billion a year on our asylum cost. It is a Bill that will lead to the cessation of 45,000 people in hotels and £6 million a day. To my mind, those are savings that we cannot ignore.”
The Home Secretary told the Home Affairs Committee that those savings would happen. Can the Minister help me by pointing to where those savings are in the impact assessment? I am struggling to find those figures in the document that the Government have produced.
Robert Jenrick
The document makes it abundantly clear that, were costs to continue to rise on the current trajectory—we are in an age of mass migration and the numbers of individuals looking to cross, for example from north Africa to Europe, are extremely high so there is reason to believe that numbers will remain high for a sustained period—by 2026, which is just a few years away, the system would be costing an additional £11 billion. We cannot countenance such waste of taxpayers’ money. As we have seen in other parts of the world such as Australia, where systems of this kind have been implemented, by delivering this system and ensuring a genuine deterrent effect, we will ensure that we save the taxpayer that money. But, more important than merely saving money, we will save the British public the stress and the strain on public services, housing, integration and community cohesion that tens of thousands of illegal migrants bring to our country. That is a prize worth fighting for, and that is why we are delivering this Bill.
Jackie Doyle-Price (Thurrock) (Con)
May I just say to my right hon. Friend that in the past week we have seen arrests and convictions in Essex? One example was over the tragedy that befell the Vietnamese a few years ago, but another was a new gang that has been identified that is trafficking people to work in modern slavery locally, in Grays. Although the British public want us to stop the boats, the British public are also generous in spirit, and what they really want is to make sure that this country is not being taken advantage of. The responsibility to tackle that lies with the machinery of Departments, our criminal justice system and our law enforcement agencies. If they can all get a grip, will that not be a better solution than sending people to Rwanda?
Robert Jenrick
Our policy with respect to Rwanda is not the totality of our approach; we are also, as my hon. Friend has just noted, investing significantly in law enforcement at home and abroad. We have increased the number of illegal working raids by 50% just this year alone. We have signed two landmark deals with France and a memorandum of understanding with Italy. We have signed a returns agreement with Georgia. I have recently travelled to Belgium and met my counterparts there, where we spoke about that horrific incident with the Vietnamese individuals who died in the back of an HGV. We agreed to further deepen our collaboration and law enforcement co-operation. She has my assurance that we are working around the clock and tackling this issue from each and every dimension, and that is why I believe that the UK has the most comprehensive plan to tackle illegal migration of any country in the western world.
Sir Stephen Timms (East Ham) (Lab)
The Minister is proposing, according to the document, to spend eye-wateringly large sums—£169,000 per person—to process claims in Rwanda. He wants to spend that money to treat people with great cruelty. How can that possibly be justified?
Robert Jenrick
I usually have the utmost respect for the right hon. Gentleman, but he is wrong in each respect of that question. First, the figure that he quoted is a gross figure, not a net figure. Secondly, that figure does not relate to the Rwandan partnership, but is an indicative figure based on the Syrian resettlement scheme. We chose not to publish the commercially sensitive nature of our relationship with Rwanda for good reason, because countries and partners working together in good faith should not publish details that we said we would not. His last point, that individuals will be treated with great cruelty in Rwanda, is categorically untrue. I wonder whether he has been to Rwanda—I certainly have. It is a country that is safe and where we have a good working relationship. The High Court exhaustively analysed Rwanda’s safety and the treatment that it would propose to give to those coming from the United Kingdom, and the High Court concluded that the scheme was appropriate and in accordance with our legal obligations. We will shortly hear from the Court of Appeal, but I very much hope it will uphold the High Court’s judgment.
Sir Edward Leigh (Gainsborough) (Con)
What is nonsense is to deny that it makes economic sense to offshore. Nobody is going to spend thousands of pounds to a people smuggler just to be detained and sent back to Rwanda. In terms of deterrence, will the Minister accept that if someone is fleeing chaos in Syria or Iraq, they will not be deterred to come if they are going to be put up in a cosy, warm, former airman’s bedroom in RAF Scampton, rather than a hotel in bracing, cold Skegness? Is not the solution to get the Bill through and pass it into law and for the House of Lords to stop its silly games?
Robert Jenrick
I completely agree with my right hon. Friend, although not necessarily his comments about Skegness. The point is that we have to look at each and every one of the pull factors to the United Kingdom. The approach that we are now taking to accommodating asylum seekers is not an outlier within Europe. I have spoken to my counterparts in almost every European country in recent weeks, and they are all considering options such as barges and sites such as former military bases. Many are considering tents. Many are bailing people to no fixed abode with vouchers and essentially leaving them to sleep on the streets. We have to ensure that the UK is not perceived to be a soft touch, and I will never allow that to happen.
Tim Farron (Westmorland and Lonsdale) (LD)
Who would have thought that a policy designed for shallow political purposes would turn out to be an expensive embarrassment? It is not about what is in this assessment; it is about what is not. Where is the estimate of the savings if the Government chose competence over posturing and efficiently cleared the 160,000 backlog of asylum seekers? Where is the impact assessment for the effect of these proposals on the victims of modern slavery? Has the Minister made any assessment at all of the likelihood that people will still come to our shores by small boats but simply not claim asylum, slipping underneath the radar and ending up in slavery and criminality? Where is the comprehensive assessment of this ridiculous policy?
Robert Jenrick
On the hon. Member’s penultimate point, we have gone to great lengths to ensure that individuals do not arrive on our shores without our knowledge. That happens in only a tiny number of cases because of the good work of our small boats operational command. We meet individuals and ensure that they are properly security checked before they flow into the system. That is the right thing to do.
The costs to the UK taxpayer of the current levels of asylum seekers are extremely high. Then, as the impact assessment says, there are non-monetised costs such as the effect on the housing shortage and public services, and the challenge to community cohesion and integration. It is for all those reasons and others that we must get a grip on this challenge. I do believe that border security is worth investing in. The hon. Member may not, but I do, and I think that the British public do as well. They want us to secure our borders and they are willing to see us invest in that.
Mr William Wragg (Hazel Grove) (Con)
May I again caution my right hon. Friend against the Gerald Ratner approach to Government policy? Will he answer this direct question: how long did it take on average to process an asylum seeker’s claim five years ago, how long does it take today, and why?
Robert Jenrick
The last time my hon. Friend asked me a question, he said that we would not be able to produce a barge to house asylum seekers. Actually, days later we signed the agreement to do that, and that will be coming forward, so he knows that when we say things, we mean them and we will deliver.
With respect to the time it takes to process asylum claims, it is too long. However, that is the product not just of management within Government and the Home Office, but the sheer number of people crossing every year. I have spoken to my opposite numbers in France, Belgium, the Netherlands and Italy, and every one of those countries is struggling with backlogs of cases as much as we are—more so in some cases—because the asylum systems across Europe are being placed under intolerable pressure by the number of people making these dangerous and unnecessary journeys. That is why we have to instil deterrence, and the Rwanda policy gives us the ability to reduce the numbers and restore sustainability to the system.
Dame Nia Griffith (Llanelli) (Lab)
Instead of effective measures to tackle the people smugglers and speed up the processing of asylum claims to reduce the backlog, the Bill means that the Minister’s Department will need to requisition more and more accommodation, as it is doing with the Stradey Park Hotel in my constituency. In spite of promises of job opportunities from Clearsprings, his Home Office contractor, all 100 staff have had the devastating news today that they face redundancy. What will the Department do to help those staff and those who are in similar circumstances because of the Bill?
Robert Jenrick
The best thing that the hon. Member could do is support the Bill when it returns from the House of Lords to enable us to get the flights off to Rwanda so that we imbue the system with the deterrence that it requires. The impact assessment that we laid yesterday makes it clear that if we do nothing, the costs to the system will spiral by £11 billion a year. She, like other Labour Members of Parliament, writes to me day in, day out complaining that the way in which we accommodate asylum seekers is too rudimentary. They say it is not specialist enough, that we should be spending more money on asylum support, not less, and that a hotel is not good enough and needs to be more luxurious. We have the Labour leader of Westminster City Council saying that individuals being housed in a hotel in Pimlico were being poorly looked after and that they should have their own single ensuite bedrooms. How out of touch with the British public can they get?
Mr Philip Hollobone (Kettering) (Con)
Local residents in the Kettering constituency are appalled that two local hotels—the Rothwell House Hotel in Rothwell and the Royal Hotel in Kettering—are being used as asylum seeker accommodation. I am convinced that the answer is to get the Illegal Migration Bill through and to stop people crossing the channel in small boats. Is it not the case that we are spending £3.6 billion a year and that that will rise to £11 billion in just three years? Is it not the case that doing nothing is simply not an option?
Robert Jenrick
My hon. Friend is absolutely right. He and his constituents see every day the harm that doing nothing could cause, with the loss of more than one valued hotel in his constituency. We want to stop this once and for all, and the dividing line is between those who want to deal with the symptoms of the problem by tweaking the system and managing failure and those of us who want to transform the system, stop the boats, secure our borders and ensure that we have a sustainable system for an age of mass migration.
Andrew Gwynne (Denton and Reddish) (Lab)
We can tell that we are in the dying days of the Government ahead of a general election, because they always resort to dog-whistle rhetoric. Nobody on either side of the House wants open borders. We want a secure border around the United Kingdom, but what we do not want is more unworkable propositions from the Government. They have brought forward Bill after Bill after Bill, and none of it has worked. The impact assessment shows that this Bill will not work either. There is no attempt to estimate the total costs or benefits of the proposals. It uses the word “uncertain” 24 times in 40 pages and does not cover the costs that we need to know. Will the Minister tell us how much this will cost and where the money will come from?
Robert Jenrick
The difference here is that if we do nothing, we will see the British taxpayer spend billions of pounds. [Interruption.] That is not on us; that is on the Labour party. We are not doing nothing; we are taking forward the Rwanda partnership, which is one of the most innovative and novel approaches to tackling this issue of any country in the world.
Marco Longhi (Dudley North) (Con)
May I extend my most sincere thanks to the Minister for his words today in response to the urgent question? I have been very loud about exactly this matter in the Chamber since I was first elected, and this is without question what the British people voted for back in 2019. Does he agree that the Labour and the Lib Dem response of simply saying, “Oh, speed up the asylum system,” equates to saying, “Just let them all in”?
Robert Jenrick
I could not agree more strongly with my hon. Friend. There is a naivety to the Labour party’s position. If Labour Members think that they can solve the problem just by granting people asylum quicker, doing a few more arrests and trying to reinvent the Dublin convention, which even European leaders have moved on from, they do not know what we are dealing with. Just the other day, the shadow Immigration Minister, the hon. Member for Aberavon (Stephen Kinnock), supported a proposal to loan Ukraine the small boats that we have seized to help its citizens deal with the recent floods. Does he have any idea what these boats are like? They are the most unseaworthy craft that I have ever seen, produced by the most evil and ruthless people smugglers and human traffickers. That suggests that Labour Members do not understand the problem. If we are to beat the people smugglers, we need to take robust measures, and that is what we are doing.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Minister is claiming that, without the Bill, the cost of the current system will rise to £11 billion—by the way, that figure is not in the impact assessment. Will he confirm that his calculation is based on the idea that per-person accommodation costs will keep rising at the same pace as they have over the last few years as a result of his Department’s failure to get a grip both on the asylum system backlog and, as I have said before, on the rip-off merchants who are scamming the Home Office for billions of pounds of taxpayers’ money on dodgy contracts?
Robert Jenrick
I will always hold the providers to account for the quality of the service they provide for the taxpayer. I take that very seriously, as I have said to the hon. Lady in the past, but I am afraid that, like the shadow Home Secretary, she is missing the point. The more illegal migrants who come to the country, the greater the cost to the taxpayer. If we want to tackle the problem, we need to break the business model of the people smugglers. Tinkering around at the edges and trying to manage the system better, which seems to be the Labour party’s approach, will never work.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Residents in Stoke-on-Trent North, Kidsgrove and Talke are rightly outraged to see hotels used, people losing their jobs, levelling-up projects undermined and the hospitality and retail sectors destroyed. This is the right scheme because, like the successful Australian scheme, it will act as a deterrent to people coming to this country, therefore bringing down the need for hotels and the burden on the Home Office.
Sadly, the only plan we hear from the shadow Home Secretary is to process people quicker. That is amnesty in another name. We are currently accepting 70% of them, and the right hon. Lady will not even commit to getting down to France’s level of 18%. Is the truth not that the shadow Home Secretary may belittle the scheme but she does not say whether she would scrap it if she were Home Secretary? Ultimately, Labour is getting ready for another embarrassing flip-flopping U-turn.
Robert Jenrick
I do not know whether the shadow Home Secretary would scrap the scheme—I have heard all sorts of conflicting reports in that regard—but my hon. Friend is absolutely right that this a world-leading partnership. Time and again, I speak to Interior Ministers throughout Europe who look to it as an innovative approach. I would not be surprised if other countries follow us once we have operationalised it.
Marion Fellows (Motherwell and Wishaw) (SNP)
For the Minister’s information, Motherwell and Wishaw has been welcoming refugees for more than 100 years—Lithuanians, Vietnamese, Congolese and Syrians. Please do not make that mistake again.
The economic assessment says:
“By setting an annual cap this should reduce the inflow of people entering the UK and therefore reduce the cost associated with processing asylum claims”,
with secondary benefits—[Interruption.] I am sorry, Madam Deputy Speaker, I do not feel well.
Madam Deputy Speaker (Dame Rosie Winterton)
If it is okay with the hon. Lady, I will move on and I will come back to her if she wishes me to.
Sir Christopher Chope (Christchurch) (Con)
Will my right hon. Friend apologise for the delay in producing this impact assessment? Will he also explain to the House why the four countries of Scandinavia have been able to reduce the number of asylum applications from 239,000 in 2015 to 28,000 last year? Why have they been able to do that when we cannot? Why is our asylum process still taking longer than it ought to? The rate at which asylum applications are being dealt with is currently at its slowest ever.
Robert Jenrick
First, I am sorry that the hon. Member for Motherwell and Wishaw (Marion Fellows) is feeling unwell, and I hope she recovers quickly.
With respect to my hon. Friend’s question, I can report good news: we are making good progress on the pledge we made at the end of last year to eliminate the legacy asylum backlog. The number of caseworkers is rising rapidly and we are on course to achieve our ambition to double them. Productivity is increasing. We will see those results flow through very rapidly. That is the right thing to do, although it is not the totality of the response to this challenge, because the reason we have a backlog in cases is the sheer number of people crossing. We published the impact assessment yesterday. I hope my hon. Friend will read it and it will inform any further discussions we have in this House following their lordships’ deliberations.
Clive Efford (Eltham) (Lab)
The impact assessment illustrates the cost of the Government’s decisions. Nobody else is to blame. The Government have had 13 and a half years, but we are in this mess. On 25 May, when I asked the Minister about dealing with asylum claims, he told me that increasing the pace of dealing with asylum claims would likely increase the number of people coming across on small boats. He also said in answer to my hon. Friend the Member for Westminster North (Ms Buck):
“the faster the process, the more pull factor”.—[Official Report, 25 May 2023; Vol. 733, c. 439.]
Where are those statements borne out in the impact assessment?
Robert Jenrick
The point I made then and have made again today is that the Labour Party’s policy is merely focused on the symptoms of the problem. It is saying that, if we can grant the decisions faster, everything will be fine. That will not resolve the problem; in fact, it is dangerously naive. We are dealing with the most evil people smugglers and human traffickers, and highly determined economic migrants. That is why we need a much broader approach. At the heart of it has to be deterrence. The Rwanda policy is part of that. That is why we have brought forward the Illegal Migration Bill. The sooner we get it on the statute book, the sooner we can implement it.
Bob Blackman (Harrow East) (Con)
My right hon. Friend is clearly right that this is a multifaceted approach. We need to break the business model of the evil people smugglers, but also speed up the process of dealing with those people who have genuine asylum cases, and then remove those who do not. Will he join me in sending this signal: if someone enters this country illegally, we will remove them to Rwanda where their case will be considered and, if they have a case, they can return.
Robert Jenrick
My hon. Friend is absolutely right. We want to build a system whereby the UK is a generous and welcoming country to those in genuine need of sanctuary. That is why we have pursued the resettlement schemes that we have in recent years, and we want to do more in future. The Illegal Migration Bill envisages that through its clause on safe and legal routes. For those who come here in breach of our laws, breaking into our country in an irregular manner, we will pursue the most robust approach. They will be returned home if it is safe to do so, or to a safe third country such as Rwanda. That is a sensible and robust approach that will help us to create a sustainable migration system.
Kim Johnson (Liverpool, Riverside) (Lab)
The Minister was correct when he said that the system was broken—broken by this Government, which is why we are paying £6 million a day to house people fleeing conflict and persecution. Liverpool, as a city of sanctuary, has extended its support to people fleeing persecution, not illegal migrants, to the sum of 2,800. Will the Minister agree that it is unacceptable for the Government to expect us to rehouse 237 people from Afghan hotels with five months’ notice? Will he agree to meet me and other Liverpool MPs to discuss this matter and solve it urgently?
Robert Jenrick
I am happy to discuss that with the hon. Lady, or she can speak to the Minister for Veterans’ Affairs, my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), who is leading on the resettlement of Afghans. I respectfully disagree with her. Those individuals who came across in Operation Pitting under the Afghan relocations and assistance policy, to whom we owe a debt of gratitude, have in some cases been in hotels for approaching two years. That is not right for them or for the country. We need to help them now into sustainable forms of accommodation. That is why we have established a generous new scheme. We are working with local authorities, with dedicated triaging teams going into the hotels and helping those individuals into vacant service family accommodation, the private rental sector and social housing. I strongly encourage her to work with her local authority to do the same in Liverpool.
Henry Smith (Crawley) (Con)
The Immigration Minister is right that the current level of illegal migration is unsustainable, due to not only the billions of taxpayers’ money being spent but the pressure on public services and housing and, therefore, on our environment. Will he assure me that, in addition to the Illegal Migration Bill, we will always uphold the decisions of this Parliament and the British courts above those of the European Court of Human Rights?
Robert Jenrick
I am grateful for my hon. Friend’s support for the action that we are taking. This Conservative Government brought forward the Illegal Migration Bill, a robust measure that is probably the most significant change to our immigration legislative framework since the second world war. We believe that it is in accordance with our international law obligations. We are determined to tackle this challenge, and we will do whatever it takes to do that.
Patrick Grady (Glasgow North) (SNP)
I hope the Minister is prepared to correct some of his earlier claims, because Glasgow remains the local authority with the most dispersed asylum seekers per head of population; it has more than any other local authority in the country. If he does not believe me, he would be very welcome to come and meet some of the asylum seekers and refugees at the Maryhill Integration Network, people who trained as accountants, nurses and teachers. They do not want to cost the taxpayer money; they want to become taxpayers. But his failed immigration processing means they are not having their claims processed in time. Will he come and hear some of their genuine stories about why they had to flee their home countries in the first place, and the contribution that they could and want to make now?
Robert Jenrick
First, I agree that Glasgow is taking in a large number of asylum seekers. It is just a pity that nowhere else in Scotland is. That is the approach the SNP Government have established. Only last week, we approached the SNP Government to suggest that the vessel that has been housing Ukrainians in Leith be used to house asylum seekers. The SNP Government said that they did not think that that was a good idea—Ukrainians were welcome, but asylum seekers were not welcome. That is emblematic of an approach that is rhetorical and never backed up by reality. I would be happy to speak to the hon. Gentleman’s constituents, but the truth is that the SNP is letting them down.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Much of the media reporting this morning focused on the £169,000 cost of transporting an individual and processing them in Rwanda, but what are the alternative costs of ongoing open illegal migration, leading to problems with accommodation, access to public services, lack of infrastructure, increasing house prices and social integration? Could the Minister tell us more about the costs of those, please?
Robert Jenrick
My hon. Friend makes a very important point. Not only is maintaining a system without taking robust further steps like the Rwanda policy likely to be extremely expensive—that is detailed in the impact assessment—but there are non-monetised costs as well, which are hard to calculate with certainty, such as the impact on scant social housing and housing more broadly, the cost to public services and the fact that many of these individuals come to the UK speaking poor English. Many require great support by the British state to help them to integrate and build successful lives in this country. That is a very challenging situation. We have to be honest with ourselves about that. We need to take action to stop the boats, so we can ensure that the finite resources we have as a country are not directed at young men who are in a place of safety such as France, but can go to the people who really need it most in and around conflict zones: families and those people we would want to resettle in the United Kingdom.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Prime Minister claims he is ready to take tough financial decisions, such as not giving our NHS heroes a pay rise, leaving them struggling to pay ever-increasing mortgages and the cost of living caused by those on the Government Benches voting measures through and crashing our economy just a few months ago. The Rwanda scheme is set to cost even more billions than the already crashed asylum system, delivered by those on the Government Benches over there. So how can the Minister truly sit there and justify spending £169,000 to send one single asylum seeker to Rwanda? I accept that the Government are working with local authorities on housing in the private sector—deregulated housing in the private sector that cannot be given to any of our people. That is what he is doing. You cannot justify what is going on here. You’ve crashed it and you go on to—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Lady is experienced enough to know that she does not address the Minister directly like that, but through the Chair.
Robert Jenrick
The hon. Lady is wrong on a number of counts. First, the impact assessment does not say that it costs £169,000 to send somebody to Rwanda. The figure is an indicative one based on the Syrian resettlement scheme, as I said in answer to a previous question. The partnership with Rwanda is rightly commercially sensitive, so she is wrong to draw the inference that she does. With respect to accommodating asylum seekers, we want to ensure we bring those costs down and we want the best possible relationships with local government to do just that. But the truth is that the driver of those costs is the sheer number of people crossing the channel every year. Unless we take decisive action, I am afraid that will continue to rise. That is why she should support us when the Bill returns to the Commons.
Jack Brereton (Stoke-on-Trent South) (Con)
Clearly, the best way to reduce the costs of illegal migration is to increase deterrence, in particular with the Rwanda plan. Will my right hon. Friend confirm that he is doing everything possible to ensure that once the Court of Appeal has made its decision we can get on with the flights to Rwanda immediately?
Robert Jenrick
My hon. Friend is absolutely right. Deterrence has to be at the heart of our approach, whether domestically in terms of making it harder to live and work illegally in the United Kingdom, or internationally with the work we are doing upstream. The Rwanda policy is a critical part of that. The Home Secretary, the Prime Minister and I meet every week to ensure we are ready to operationalise the policy as soon as we have the ability to do so. We will await the judgment of the court. Of course, we hope it will uphold the very strong judgment we received from the High Court earlier in the year.
Alex Cunningham (Stockton North) (Lab)
The Government’s failing asylum seeker policy also impacts on local areas in the UK where large numbers of asylum seekers are accommodated. The Government promised not to increase the number of asylum seekers in the north-east, but the Minister told me in a letter this week that that would not stop a large barge being sited on the Tees. Is Teesside getting hundreds or thousands more asylum seekers, yes or no?
Robert Jenrick
I am surprised by the hon. Gentleman’s approach because he voted against every measure we brought forward to tackle this challenge. As a result, more people will come to the United Kingdom illegally on small boats. I suspect he cannot even bring himself to call these individuals illegal migrants. We are taking the tough steps we need to tackle this issue. We are also looking at new ways to accommodate people. Barges and vessels are options being pursued by the Irish, the Belgians, the Dutch and the SNP in Scotland.
Sam Tarry (Ilford South) (Lab)
The Minister spoke earlier about investing in border security, but it was only in April that Border Force were on strike over pay and conditions. He also spoke earlier about humanitarian approaches to migration, yet I still have constituents in Ilford South whose families are in Afghanistan fleeing the Taliban and facing every day being murdered by the Taliban. The Government have failed to bring those people safely to this country. We then turn to the impact assessment on the Bill, which exposes what it is: an absolute dog’s breakfast. It is designed for one thing only: to try to win an election. It is nothing to do with serious migration policy. It is not properly costed. It is total nonsense. Mark my words, Madam Deputy Speaker, I doubt a single flight will go to Rwanda. It will be an incoming Labour Government who will, yet again, have to clean up this Government’s incompetent mess.
Robert Jenrick
Let’s see about that, shall we? I think we have the right policy. It is one we are pursuing. As soon as we have the ability to do so through the courts, we will get those flights off to Rwanda. On the hon. Gentleman’s suggestion that the UK is cruel or inhumane, I could not disagree with him more strongly. The facts bear that out. The fact that we brought more than 500,000 people to this country, including from places such as Afghanistan, on humanitarian visas shows that we are one of the world’s leading countries in that regard. One of the challenges we have, to be frank with him, about helping some people we would like to help from Afghanistan, or those who fled to neighbouring countries such as Pakistan to come to the UK, is the fact that so many people have come across on small boats from a place of safety such as France that they are putting intolerable pressure on our system. The sooner we stop the small boats, the more we can do for people who really deserve our help.
Mick Whitley (Birkenhead) (Lab)
The impact assessment confirms that the Government’s Rwanda scheme, which I have criticised previously in this House for its senseless cruelty, will also come at huge expense to the British taxpayer. Does the Minister accept that there is both a more humane and financially prudent alternative to the Government’s plans, and that should begin by allowing asylum seekers to seek paid work, which the Lift the Ban coalition estimates would lead to the Government receiving more than £366 million in tax and national insurance alone?
Robert Jenrick
I do not support allowing asylum seekers to work in this country. The approach that we are taking under the Illegal Migration Bill means that individuals who come here will be processed swiftly—in days and weeks, not months and years—and then either returned home or sent to a safe third country such as Rwanda, so that issue will not be relevant. Let me also point out that the hon. Gentleman recently opposed the proposal for a number of asylum seekers to stay in his constituency, despite having said that it was a place of sanctuary.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Excessive cost for nil result—does not that assessment sum up not just the Minister’s flawed Home Office plans, but the incompetence at the heart of the whole sinking Government?
Robert Jenrick
No. As I have said on many occasions, the approach we are taking is to introduce one of the most creative and robust systems of any country in the western world.
Jim Shannon (Strangford) (DUP)
I recognise that the Minister and the Government have a big illegal migration issue to sort out, but the economic impact assessment does not paint an accurate picture. Without foreign staff our NHS would collapse, and without the support of grandparents to help with children our workforce would collapse. The assessment does not do justice to the fact that we as a nation are infinitely richer thanks to those who choose to come here to work and raise their families, and who make the choice to be the best of British alongside those of us who were born here.
Robert Jenrick
The difference is that the people to whom the hon. Gentleman has referred come here legally. We welcome people who come here legally—as visitors on tourist visas, as workers on work visas, as NHS workers on NHS and social care visas—but it is very different if people break into our country, flagrantly breaching our laws. No other country in the world would tolerate that, and neither should we.
Madam Deputy Speaker (Dame Rosie Winterton)
That brings us to the end of the urgent question.
Alison Thewliss
On a point of order, Madam Deputy Speaker. The Immigration Minister told me earlier:
“I do not know if any refugees came to it”
—Refugee Week—
“because the SNP does not house refugees in Scotland.”
That statement seems to me to be as insulting as it is inaccurate, and I would like some clarification of it.
Let me say first that it is up to the Home Office, not the Scottish Government, to decide where people are dispersed. Glasgow supports about 5,000 asylum seekers, Scotland took well over its population share of Ukrainians, and every single local authority in Scotland took people as part of the Syrian resettlement scheme. The Minister also mentioned the luxury cruise ship in Leith that was contracted by the Scottish Government to house Ukrainians. The Ukrainians on that ship were afforded comprehensive wraparound support. I would be interested to hear from the Minister whether he would offer refugees the same comprehensive wraparound support on that basis, because if he would not, I would understand why the Scottish Government would be nervous about it.
Robert Jenrick
Further to that point of order, Madam Deputy Speaker. Perhaps it would be helpful if I sent the hon. Lady a copy of the letter that I wrote to the Scottish Government recently, which debunks many of the points that they had raised with regard to the vessel in Leith. If there is still time, the hon. Lady could ask them to change their mind, because if they are willing to accommodate Ukrainians, surely, given how strongly they feel about asylum seekers, they would want to do the same in this instance.
Madam Deputy Speaker
Order. Let me speak.
I am not entirely sure that anyone is asking me to do anything. It seems to me that we are slightly prolonging the exchanges on the urgent question, and I have to say that it is not for the Chair to adjudicate on two different points of view. I hope that if the hon. Lady wants to come back to this, there will not simply be a further exchange of views on what has already been said. A point of order should be directed at me, to ask me to do something, but the hon. Lady clearly wanted to put some points on the record. She has done that, the Minister has responded, and I think the House will now want to move on. I urge the hon. Lady, if she has something further to add, to ensure that it is relevant to the Chair. Otherwise, she might consider that she has put her points on the record.
Alison Thewliss
Further to the point of order, Madam Deputy Speaker. Thank you for what you have said, and I will be brief. The Minister implied, at the Dispatch Box, that Scotland does not take refugees. This is clearly a point of accuracy, because that comment was inaccurate, and I ask, Madam Deputy Speaker, whether the Minister could withdraw it.
Madam Deputy Speaker
Again, that is not a matter for the Chair. The hon. Lady has made her point. If the Minister felt that he had said anything inaccurate, or had inadvertently misled the House, he would be expected to correct the record at the first opportunity. I think we will leave it at that, because this has been quite a long extension of the previous exchanges.
Schools (Gender and Parental Rights)
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
13:48 - The House having divided: - Ayes: 34 / Noes: 40 - Question accordingly negatived.
Andrew Bridgen (North West Leicestershire) (Reclaim)
I beg to move,
That leave be given to bring in a Bill to prohibit the promotion of social transition practices in schools; to require schools to inform parents if their child has indicated an intention to pursue, or has commenced, social transition; to provide for a right for parents to access information about lessons in schools; to make provision about the teaching of the concept of gender identity in schools; and for connected purposes.
The issue that I bring to the House today needs a Bill, the very necessity of which is both grotesque and revealing of an absurdity: the turning of a blind eye to the real-world effects that seemingly good-faith legislation has had on our education system, on schools and on society as a whole.
So that we can all be clear about what the proposed Bill refers to, let me start by defining the terms that it mentions. “Gender identity” is the theory that, although we may be biologically male or female, the more important characteristic is what we actually feel like on the inside. “Social transitioning” is the conscious act of self-rejection of our biological reality.
Cases of that happening used to be one of the clearest examples we had ever seen of an exception that proves the rule, but I am sickened to say that, under all our noses, members of society who are either politically or educationally tasked with helping to bring up our children have turned raising the next generation into a science experiment, with consequences that break my heart.
In schools today, it is rapidly becoming taught that it is a normal and common experience not to feel at home in our own bodies, and that the reason we feel like that is likely to be because we, as a person, are simply trapped in the body of the opposite sex. In some schools, one in 15 children now identify as something different from their actual biological sex.
The exceptions that proved the rule are now becoming the rule. We have started to blur the lines of basic reality, and have turned what was already an extremely complex world for children to get to grips with into a more complex one. To paraphrase Douglas Murray, there is just about nothing more formative to our grip on reality than the realities of sex. The first, most basic, most instinctive thing we become aware of when we are growing up or even meeting someone new is simply that there are boys and there are girls. In dismantling that, we dismantle the world and pull out a foundational block of society. Who knows where the Jenga tower may fall? But one thing is certain: the tower will fall, and we should all be ashamed that we would doom our children to such a fate.
Social transition practices in schools have now become the norm in every classroom in the country. They are promoted as a normal and healthy response to natural feelings that children experience during the difficult period that we used just to call “growing up.” There is not a single child in our schools today who has not been exposed to these practices. They include the policing of language by mandating the use of a child’s preferred pronouns—referring to a boy as “she” or “her” instead of “he” or “him”, or vice versa—and the use of body alterations to reflect a transition to the opposite sex, which primarily take the form of surgical castration for boys, double mastectomies for girls, Frankenstein-esque genitalia being created from grafts of skin, and drugs to pause or halt puberty. Teachers, students or even parents who do not oblige are punished and ostracised. In Canada, calling a child by their “wrong pronoun” is already a crime.
The common consensus is that this gender-based ideology came from adolescents who are more inclined to adopt so-called progressive and liberal values, but that could not be further from the truth. The origins of gender ideology came from rogue academics in the 20th century who have since been discredited, laying the groundwork for future socialist thinkers to start making more and more wild claims about the nature of our societies.
George Bernard Shaw was one of those who opened Pandora’s box by coining anti-family rhetoric and promoting the rejection of societal gender norms. In 1928, Shaw wrote:
“The social creed must be imposed on us when we are children… It is quite easy to give people a second nature, however unnatural, if you catch them early enough.”
Those are chilling words, yet here we are, voluntarily following his playbook.
This did not come from our children spending more and more time in the echo chamber of social media; it has been clinically and systematically imposed on them from the top down. Gender ideology is a political ideology—one that is being, effectively, promoted in schools, and that therefore constitutes political indoctrination, which, under section 406 of the Education Act 1996, is strictly prohibited.
Any who would argue that gender identity is protected by the Equality Act 2010, and can therefore be discussed in schools, would have grossly misinterpreted the Equality Act, as gender identity is not a protected characteristic. There is a reason why we are careful what topics we broach with children and teach them at young ages. Why have we forgotten that?
If it were at all possible, it gets much worse. The public are rightly shocked when they learn just how graphic and extensive sex education lessons have become in our schools. Five-year-olds are being taught to identify different genitalia in class. Nowhere in the guidance on sex education lessons does the Department for Education discuss nine-year-old children being taught about masturbation or witnessing dolls simulate sex acts, or 11 to 12-year-olds being taught that they can feel pleasure from anal or oral sex. Does this depravity know no bounds?
Not only are these topics being broached, but pre-pubescent children are being encouraged to explore their own bodies in this manner. It borders on criminality when adults are suggesting that children as young as eight should engage in adult activities. We have a duty to safeguard our children, preserve their innocence and protect them from the complexities of adult life until they reach an appropriate age, when they are mature enough to engage with topics and fully understand them.
What is happening in our schools is unacceptable, and there is a need for immediate action. Classrooms should be a safe harbour. Inclusivity has become a double-edged sword, cutting through the very fabric of childhood. Every child has the right to innocence and immunity from the sexual perversions of adults.
When teaching sex education—a topic where a bridge should stand between parents and teachers—a barricade has formed. Parents have been left in the dark and even actively blocked from seeing the material taught to their own children. We must act now and hope that the damage already done will not be too long-lasting.
The Bill I propose today will prop up existing legislation aimed at protecting our children and put an end to this dark chapter. Social transition in children will be forbidden. The promotion of social transitioning and the discussion of social transitioning practices will be prohibited from appearing in any aspect of a school curriculum. Local authorities, governing bodies or headteachers shall immediately inform parents or carers of any child who indicates intent to socially transition or who has commenced the process of socially transitioning. Moreover, when the parents of a child who has considered socially transitioning have been informed, the relevant safeguarding policies shall be adhered to and the relevant safeguarding leads shall be notified.
Parents will be entitled to the right to consultation, the right to withdraw their children from sex education and the right to have access to the materials used as part of that sexual education. Schools will only be allowed to use published, citeable resources that are reliably available for public and regulatory scrutiny. The Bill will uphold and reinforce the provisions laid out in the Education Act 1996 and will forbid the promotion of gender identity. Where gender identity is taught, it will be taught alongside opposing views to allow for a fair presentation of political beliefs.
Relationships and sex education lessons and personal, social, health and economic education lessons were brought in to sensibly and safely inform our children about topics necessary to keep them safe from harm. Let us get a grip of the legislation and deliver on the original intended purpose. Our children are not guinea pigs; it is high time that this House took charge and stopped allowing ideologies passed down from mad scientists that treat them as such. My proposed Bill will protect children, reassure parents and offer certainty to teachers. I wish with all my heart that it was not necessary, but it is needed—and it is desperately needed.
Mr Ben Bradshaw (Exeter) (Lab)
I would like to make it clear to the House that I was not intending to speak in this debate when I came to work today, but I and a number of colleagues were so appalled by the Bill’s contents—as we were by that speech—that we felt it was important to send a clear message from this place, particularly to young LGBT people and their families, that this nasty Bill does not represent the views of Parliament.
Trans and non-binary people have always existed. Gender dysphoria has been an internationally recognised condition for decades. Coming out as trans or non-binary is never easy and often extremely difficult. That is why, historically, so many trans people have suppressed their gender dysphoria, leading to high levels of mental illness and, all too often, sadly, suicide. Better knowledge and a much wider acceptance of gender non-conformity in recent years, particularly among the younger generation, have thankfully made it easier for trans and non-binary young people to come out. Of course, that can pose challenges to schools, but schools have become very experienced at handling social transitioning with sensitivity and professionalism.
This Bill would turn the clock back to an age in which the very existence of trans and non-binary people—a tiny minority—was simply not acknowledged. It would force young people to continue living in the gender assigned at birth, even when, as in the vast majority of cases, they have the full support of their parents to transition and live in their chosen gender. Parents would face the impossible choice of forcing their child to continue living in the gender they no longer identify with—with all the negative, often devastating, impacts on that child’s mental health—or removing them from school and educating them at home. There is no evidence that the way schools currently deal with this very small number of cases is not working.
For young LGBT people whose families are not supportive of their sexuality or gender identity, the consequences of this Bill would be even worse: it would, in effect, force schools to out LGBT students. The National Society for the Prevention of Cruelty to Children says that young people should never, ever be outed against their will, except when serious safeguarding concerns require it. One third of homeless young people are LGBT people who have been rejected by their families. The Albert Kennedy Trust, a charity that does fantastic work with homeless young LGBT people, has seen a 70% increase in referrals in the last three years, and half of LGBT young people report that they would be worried about coming out to their families because of hostility from one or more family member.
This Bill is not about the welfare of young people, and it is not about the smooth running of our schools; it is about a cynical but completely transparent attempt, by a conspiracy theorist who is too right-wing even for today’s Conservative party, to stoke the culture wars on the backs of our most vulnerable minority and their families. It is despicable. I urge colleagues in this House to give it a resounding thumbs down.
Question put (Standing Order No. 23).
The House proceeded to a Division.
Madam Deputy Speaker (Dame Rosie Winterton)
Perhaps the Serjeant could make sure that everything is okay in the Division Lobbies.
Opposition Day
Mortgage and Rental Costs
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:26 - The House divided: - Ayes: 213 / Noes: 288 - Question accordingly negatived.
16:42 - The House divided: - Ayes: 283 / Noes: 198 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I inform the House that amendment (a), tabled in the name of the Prime Minister, has been selected.
I call the shadow Chancellor to move the motion.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That this House is extremely concerned that, under this Conservative Government, average mortgage costs will be increasing by £2,900 per year, with a typical household in the UK paying over £2,000 more per year than in France and over £1,000 more than in Ireland and Belgium, and that renters face huge increases in rent payments; condemns the Government for its slowness in acting to support millions of homeowners and renters and so alleviate the impact of its policies; calls on the Government to bring in mandatory measures, as the current voluntary measures could lead to around one million homeowners missing out on support, and to immediately adopt measures to ease the mortgage crisis and halt repossessions by guaranteeing support from lenders for struggling mortgage borrowers and strengthening the rights of renters; in particular calls on the Government to require lenders to allow borrowers to switch to interest-only mortgage payments for a temporary period, to lengthen the term of their mortgage period, to reverse any support measures when requested and to make mandatory repossession restrictions; and further calls on the Chancellor of the Exchequer to instruct the Financial Conduct Authority to urgently issue guidance that the credit score of borrowers should be unaffected by any temporary switches to interest-only mortgage payments or lengthening of their mortgage period and to introduce a renters’ charter that would end no-fault evictions immediately.
Throughout Britain, families are experiencing the harsh, rolling impacts of the Tory mortgage bombshell. Last autumn, the Tories’ mini-Budget crashed the pound; they trashed our economic institutions and left our country’s reputation in tatters, with higher mortgage rates as the consequence. The current Prime Minister and the latest Chancellor have not turned the situation around. For families across Britain, things are getting worse, not better. The Prime Minister is now lecturing the country to “hold our nerve”. It is easier to hold your nerve when you do not have to pay the price of the Tory mortgage bombshell.
What are the consequences? Millions of households will be hit by the bombshell, paying, collectively, a total of £15.8 billion more in mortgage payments by 2026. That will be an additional £240 per month, on average, for those re-mortgaging. In the constituency of the Chief Secretary to the Treasury, the right hon. Member for Salisbury (John Glen), the figure is higher still, with 9,700 households there facing payments, on average, of £280 per month more—or £3,400 per year. People can hold their nerve all they like, but how does the Minister think that is going to pay the mortgage or the rent?
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
My right hon. Friend is making a good introduction. Is it not the case that all this money that will be lost by households does not go to help anyone but the Tories’ friends in the banks, who, of course, have presided over those neo-liberal policies that trashed our economy?
Rachel Reeves
I thank my hon. Friend for that intervention. I will come on to the ways in which we can better protect people, but many banks are doing the right thing and trying to support their customers. It is important that all lenders take the action that is needed, which is why we need the Government to make that charter a requirement, not a voluntary agreement.
These devastating increases in mortgage rates will damage people’s plans for the future and deny many their dreams. In plenty of cases, they will mean more lives and hopes ruined. Citizens Advice said this week that many of its clients with mortgages have seen their finances “fall off a cliff”, with more and more people struggling to afford the essentials, such as food and heating. But it is not their fault: they have done nothing wrong.
For James, from Selby, the Tory mortgage bombshell is going to cost him and his family £400 more each month. That is nearly an extra £5,000 a year, but he cannot find that money and so he and his family have no choice but to sell their house and downsize. He has just told his children that they are going to have to start sharing bedrooms because they cannot afford to live in their home. Can the Minister explain why James and his family are having to pay the cost of this Tory Government’s failures?
Margaret Greenwood (Wirral West) (Lab)
My right hon. Friend is making excellent remarks. Does she agree that this situation is having a devastating impact not only on people with mortgages, but on renters, because landlords are passing on the costs to them? Does she agree that we need no-fault evictions to be scrapped immediately?
Rachel Reeves
I very much thank my hon. Friend for that intervention. She is absolutely right: the people being hit are those who are having to re-mortgage; those who are on floating rates and are just seeing their payments automatically go up; first-time buyers who want to be on the housing ladder but, because of this bombshell, are not able to get on it; and renters, who are paying the higher mortgage payments of their landlords. She is right to say that we need Labour’s renters charter, in order to do a number of things, including ending no-fault evictions.
Families facing the increasing squeeze from their rising mortgages are now having to confront that stress and anxiety day in, day out. For many, this will mean that their family holidays are cancelled this year; they will watch hard-earned savings drain away; and they will decide that they can no longer afford to spend money on days out with friends and family. For others, it could be much worse, with them not moving up the housing ladder, but slipping down it, through no fault of their own. The scale of the impact of all of this is devastating.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Lady and the Labour party for bringing this debate forward. Every one of us, including my constituents, is dealing with the same problems. Some people contacted me last week to say that their mortgage rates are going up from £400 to £800, while others have said that theirs are going up from £600 to £1,200. It is just impossible to find that amount of money. Does she think that perhaps the Government—I look to them when I say this—should be looking at mortgage tax relief? That is one direct method of helping people to retain their houses and their dream of home ownership, and to survive this crisis.
Rachel Reeves
The hon. Gentleman speaks powerfully and I recognise those stories of people seeing their mortgages double because of what is happening. I will come on to the solutions proposed by the Labour party, but it is important that money is not injected into the economy at this time. If that happened, interest rates would go up even more, crippling the hopes and opportunities of exactly those we want to help. I will come on to the solutions that we propose shortly.
Over the next few years, 7.5 million families will be hit by the Tory mortgage bombshell, month after month after month. That is why it is essential that greater mortgage flexibility and support from lenders must be mandatory, not voluntary as the Government have put forward.
Consumer champion Martin Lewis warned the Government about mortgage market issues last year, and he now says “the timebomb has exploded”, yet under the Government’s scheme, 1 million households are missing out. What is the Government’s response to them? Tough? It is up to the discretion and the goodwill of their lender? That is not good enough.
Although it is welcome, as I said, that many lenders are stepping up and doing the right thing, the scheme cannot be voluntary. That is why, when Labour set out our mortgage package last week, we made sure that that would be compulsory, across the board, and required of lenders. That is right: required of lenders. Without that clarity and confidence, families are rightly anxious about what comes next and how it will affect them.
Imran Hussain (Bradford East) (Lab)
My hon. Friend is making an excellent speech, highlighting the real situation facing many of our constituents as we sit here today. In my constituency, 9,000 families will see a mortgage increase of up to £1,400, on top of struggling to put bread and butter on the table and keep up with energy costs. All we hear from the Prime Minister is that they should hold their nerve. Frankly, that is rich coming from somebody who is never going to be in that position. Does my hon. Friend agree with me that rather than finding solutions, what this Tory Government and the Prime Minister are demonstrating is that they are completely out of touch with people’s real problems today?
Rachel Reeves
My hon. Friend speaks powerfully on behalf of the people of Bradford East, a constituency that I know well and that I know will be badly affected, not just by the Tory mortgage bombshell but by the cost of living increases as well.
Catherine West (Hornsey and Wood Green) (Lab)
My constituent’s mortgage has gone up from £1,950 to £3,000. She spent an agonisingly stressful time waiting for that deal to come through, but if she had made the deal today, it would have been £3,500. Does my hon. Friend agree that that is too much stress for one family to take?
Rachel Reeves
My hon. Friend is absolutely right. People who live in Hornsey and Wood Green, where house prices are high, will see a big increase in their payments. When rates go up from below 2%, which is what many people were paying, to above 6%, there will be huge increases. It is through no fault of my hon. Friend’s constituents, or any of our constituents, that they are in that position, which is what is so frustrating.
I remember a time—you may as well, Madam Deputy Speaker—when the Tory party used to preach personal responsibility, yet this Government are taking no responsibility for the devastation that they have caused. Where is the apology for the Tory mini-Budget? Where is the apology to those paying hundreds of pounds more a month in mortgage payments, or to those at risk of losing their homes? There is nothing.
Let us just imagine for a moment that a group of people working in an office, a supermarket or a factory burn the place down. Everyone else who works there is told that they have to pay to clean up the mess and that that payment will carry on for years. The next day, the arsonists turn up to work again, expecting to be paid as normal and, not only that, they are furious if someone even brings up the incident of the fire with them. That would be preposterous and outrageous, and yet it is precisely what the Government are doing. “Inflation? Oh, that was nothing to do with us. It was all global events. It was those public sector workers asking for a pay rise. It was the Bank of England. It definitely was not anything to do with us.” That is what we hear from this Government. Well, we know what the Tories did last autumn was totally outrageous. The country will not forgive or forget the scale of the harm that the Tories have caused to the economy and to families up and down our country.
The Government say that this is happening everywhere, so let us look at what is happening in Europe. The latest data comparing interest rates among our European neighbours show that a household in Britain, with a £200,000 mortgage, is now paying over £2,000 per year more for its mortgage than in France, over £1,000 a year more than in Ireland or Belgium, and £800 more than in Germany. That impact on families in Britain reflects the choices made by this Tory Government.
To make matters worse, after 13 years of the Tory Government being in power, average real wages are still lower than they were in 2010. Many families have faced one financial pressure after another. Energy bills are twice as high as a year ago. The weekly food shop is astronomical. On top of all that, higher mortgages and higher rents are the last thing they needed. No one is reassured by the suggestion from the Prime Minister that he is “100% on it”. After 13 years in power, it is clearer by the day that the Tories are the problem, not the solution.
The truth of the matter is that we have the highest inflation in the G7, with core inflation rising and interest rates rising too. We are in a weaker position than many as a consequence of Tory choices that have left our economy lacking resilience and security in the face of shocks, including global ones. Banning onshore wind, closing our gas storage facilities and scrapping the home insulation programme have all contributed to higher bills, higher costs and less security.
A patchwork Brexit deal full of holes is making goods such as food more expensive, with the prospect that that could get worse at the end of this year, with new import checks and costs. What is the Government’s latest idea? One of the Chancellor’s economic advisers called last week for the Bank of England to “create a recession”, adding:
“They have to create uncertainty and frailty."
Will the Minister tell us whether the Chancellor agrees with that advice from his advisers? If not, why is taking advice from them?
A Labour Government would be built on the firm foundations of economic responsibility, with strong fiscal rules. We would negotiate a bespoke British food and farming agreement with our trading partners, while staying out of the single market and customs union. We would lift the ban on onshore wind and reform antiquated planning rules, working in partnership with businesses and trade unions to invest in the jobs and industries of the future, protect our energy security and reduce our energy bills. That is what is needed to get our economy on sustainable and stable path, so that families are not grappling with a cost of living crisis created by this Tory Government.
If ever there were proof that the Government do not have the answers that our country needs, it is what is happening on housing. The Conservatives once claimed to be the party of home ownership: not any more. Home ownership is falling. It is not because of just their failure to require lenders to provide mandatory support for mortgage holders, although that would certainly help today. Incredibly, the Prime Minister has scrapped house building targets in the face of pressure from some of his councillors and Back Benchers. The consequence of the Tory Government’s policy is now to push the prospect of home ownership for young people and families starting out in life even further away.
Kim Johnson (Liverpool, Riverside) (Lab)
My right hon. Friend is making excellent points, particularly about young people being priced out of the property market. Does she agree that we need to overhaul the housing system to include better rights for renters and more council housing?
Rachel Reeves
My hon. Friend makes a really important point, because the Tory mortgage bombshell is experienced whether people have a mortgage or not. Renters are seeing huge increases in their rents—on average 10% in the last year—in Liverpool and around the country. That is why Labour’s renters charter is so important right now.
Treasury Ministers remain ignorant or indifferent to the plight of the renters whom my hon. Friend spoke about. A Labour Government would bring in a renters charter, ending no-fault evictions, and introduce a four-month notice period. Renters right now are exposed to their landlords passing the higher costs of their mortgages on to their tenants. Yet it is not clear whether the voluntary package, which the Chancellor described yesterday, includes buy-to-let mortgages. Will the Government tell the House and the country what they think the consequences of that will be? Labour would rebalance the housing market towards first-time buyers and towards renters. We would bring in a comprehensive mortgage guarantee scheme, stopping overseas investors buying whole developments off plan, and introduce our tough private renters charter.
The Tory mortgage bombshell could not come at a worse time for family finances—right in the middle of a cost of living crisis. Our country is being made to pay the growing price of Tory economic failure. People cannot afford this Tory Government. We have seen mistake after mistake, wrong decisions taken for the wrong reasons, and the Government never standing up for working families and refusing to take responsibility for the problems that they have created. The only thing that the Tories have to offer is desperate excuses for the state of the country after 13 years of their Government.
At the next election, people will be asking this question: are me and my family better off after 13 years of Conservative Government? The answer to that is a resounding no. The last thing that our country needs is this Tory mortgage bombshell. The country needs security for working people. That is what Labour will deliver. We are on to the third Prime Minister of this Parliament. If this Government had any decency, they would call a general election and let the people decide who they want to stand up for them and lead our country.
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 drive to halve inflation, grow the economy and reduce debt; particularly welcomes the Government’s new Mortgage Charter which has been agreed by 85 per cent of the residential mortgage market and will provide support to mortgage holders through new commitments and flexibilities to help borrowers who are anxious about rising interest rates; notes the extensive package of cost of living support to help families with rising prices, worth an average of £3,300 per household including direct cash payments to the eight million most vulnerable households; and further believes that Labour’s policies to manage the economy would be inflationary, lead to higher interest rates and put more pressure on mortgage holders and renters.”
After two decades of low inflation, the world has been confronted with a bout of fast-growing prices, and we are not alone. As a result of rising prices, central banks around the world, including in the United States, Japan, New Zealand and the European Union, have been raising interest rates in order to force down the rate of price rises. As all Members will be aware, last week, the Bank of England’s independent Monetary Policy Committee raised rates to 5%. Let me say at the outset that the Bank of England and its Monetary Policy Committee has the full support and confidence of this Government, and will continue to do so as it takes whatever action is necessary to return inflation to the 2% target in the medium term. As the Chancellor was clear when addressing this place yesterday, he will not take action that undermines the Bank of England’s monetary objectives.
Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister will be aware that the latest data on mortgage rates specifically shows that, since the mini-Budget, they have increased faster here in the UK than in the US. That gap in mortgage rates means that someone here with a mortgage of £200,000 will be paying £1,000 a year more than in the US. What is the Minister’s explanation for that?
John Glen
I am here to account for what has happened in the UK. Obviously, there are differences—[Interruption.] If I may answer. There are differences across the EU and the US. What I am telling the House, which is quite transparently clear, is that inflationary pressures are affecting all economies at the moment, and it is my responsibility to account for what we are doing as a Government.
John Glen
I wish to make more progress.
Where there are non-inflationary measures that we can take to relieve the anxiety faced by families, we will do so and we will do everything we can to address the situation. That is why, on Friday, the Chancellor met the UK’s principal mortgage lenders, alongside senior representatives from the Financial Conduct Authority and UK Finance, to agree new support for those struggling with their mortgage payments.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I am grateful to the Minister for giving way. Can he give an answer to my right hon. Friend the Member for Leeds West (Rachel Reeves), who asked whether the mortgage charter, which the Chancellor announced yesterday, will cover buy-to-let mortgages? Why exactly has the Chancellor not made that mandatory?
John Glen
I will come on to set out in detail what arrangements we have made. As the Chancellor set out pretty clearly yesterday, we will hear in the next couple of weeks the details of that agreement, which includes a growing number of lenders—it currently covers 85% of lenders in the country.
John Glen
I wish to make some more progress and then I will take some interventions in a moment.
At that meeting on Friday, the Chancellor secured agreement from lenders to a new mortgage charter, which we published yesterday. It sets out what support customers will receive. We are proud to say that, over the weekend, more lenders signed up to the charter, and we encourage further lenders to join that 85% of mortgage market providers.
The charter provides support for two groups of people in particular. The first group is those who are worried about their mortgage repayments. If they want to switch to an interest-only mortgage or extend their mortgage term to reduce their monthly payments, they will be able to do so with the option of switching back to their original mortgage deal within six months without a new affordability check or affecting their credit score.
For most people, the right course of action will be to continue to make payments on their current mortgage. Keeping up full repayments means that they will pay less interest overall. But this new measure means that people will be able to opt for a lower-cost approach for six months with full reversibility, giving them the peace of mind of knowing that they can try out a new approach and still change their mind later on.
Paula Barker (Liverpool, Wavertree) (Lab)
I thank the Minister for giving way. He is being very generous with his time.
With not all the mortgage market covered by the charter, there is a worry that around 1 million households could miss out on the support. Can the Minister guarantee that the measures that were outlined will be available to everyone struggling with their mortgage payments, not just those who happen to have a mortgage with one of the banks that is on the list of those that have cosy chats with the Chancellor?
John Glen
I hope that more and more lenders will be added to those 85% of providers. The details will be known in the next few weeks. This comes on top of the FCA’s rules around lenders having to take an individual approach to the circumstances of their customers, especially those trying to find a way through when they fall into difficulty.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Will the Minister give way?
John Glen
No, I wish to make a bit more progress. I will come back to the hon. Lady in a moment.
This measure will take effect in the next few weeks and it means that a homeowner with £100,000 outstanding on their mortgage over 15 years can change their payments—with no impact on their credit rating—by extending the mortgage term by 10 years, which could save them over £200 a month, or by moving to interest-only payments, which could save them more than £350 a month. A further measure for this group of customers means that, if they are approaching the end of a fixed-rate deal, they will have the chance to lock in a new deal with the same lender up to six months ahead. However, they will still be able to apply for a better like-for-like deal with the same lender, with no penalty, if they find one when their current deal ends.
Emma Hardy
I understand why the Minister wants to have a voluntary charter, but does he agree that what we are actually seeing from the banks—this was raised on the Treasury Committee—is that they are very quick to raise interest rates on mortgages, but not so quick to raise them on savings? The difference between the interest rates being raised on mortgages and those being raised on savings is around 50%, which is completely unfair. When the Chancellor meets the banks, will he also add to the conversation the unfairness that exists when it comes to interest rates on savings? That is why I am reporting back to the Minister on the need to mandate this—because we cannot always assume that the banks will act in the interests of their customers.
John Glen
I thank the hon. Lady for her point. As the Chancellor said yesterday, he did raise that with lenders on Friday. We will continue to work closely with them on those disparities where they exist. My colleague the Economic Secretary to the Treasury, who is responsible for the relationship with financial services institutions, will also be attending to this issue. It is right that, with interest rates rising, banks should be looking to put as much of that rise as possible on to the savings rates that they offer to consumers.
Imran Hussain
Time and time again the Minister seems to be ducking the central issue in this debate, which is that the charter the Government have proposed will not cover millions of people and will not provide support. Why will he not instead subscribe to the Labour position today and require all lenders to do it, so that everybody can get support? Answer the question Minister.
John Glen
I appreciate the passion with which the hon. Gentleman presents his point, but we have made an agreement with the FCA and with lenders, and in the next couple of weeks the details will be available for consumers and mortgage holders up and down the country. As I say, we have already moved from three quarters to 85% of lenders and I expect others to join in due course. We will continue to have dialogue with the FCA and to look at further ways to help consumers.
The purpose of our intervention is to provide people with more flexibility and optionality to find the best deal for their circumstances. Mortgage arrears and defaults remain at historically low levels, with less than 1%—I think it is 0.86%—of residential mortgages in arrears in 2023, a lower level than just before the pandemic.
Paul Holmes (Eastleigh) (Con)
We heard the shadow Chancellor outline the utopian elements of her compulsory scheme. Can the Chief Secretary outline which scheme goes further—our scheme, which is not mandatory but delivers 12 months before repossessions happen, or the Labour Party’s mandatory scheme?
John Glen
My hon. Friend makes a wise point, and I will come on to talk about some of the other measures in a moment. For those families involved, it is extraordinarily distressing to lose their home, so we will do all that we can to support people who find themselves in such a challenging financial position.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will the Minister give way?
John Glen
No, I am going to finish answering the previous point.
As part of our strong regulatory framework for mortgage holders, banks and lenders already provide tailored support for anyone struggling, and they deploy highly trained staff to help those customers. Support offered includes temporary payment deferrals and part interest, part repayment, as well as extending mortgage terms or switching to interest-only payments. To supplement that, we agreed as part of the mortgage charter on Friday that, in the extreme situation in which a lender is seeking to repossess a home, there will be a minimum 12-month period from the first missed payment before there is a repossession without consent. I believe that that goes rather further than what the Opposition were suggesting.
Barbara Keeley
This crisis is already having an impact on renters too, and the Chief Secretary is not touching on that in his speech. I have a constituent on a rolling private tenancy who is worried sick that her landlord is going to evict her. She is worried about ending up in a hostel with her teenage daughter. She works full time and pays her way. That situation is shared by so many. Does the Chief Secretary not agree that there should be support for renters, and that the way to achieve it is to back Labour’s renters charter, including the halt to no-fault evictions and a four-month notice period for landlords?
John Glen
I do not accept that, but I do accept that there are challenging situations for our constituents up and down the country. That is why this Government have intervened and are working in this way with lenders to find a constructive package of interventions to meet the situation those constituents are in.
Anyone who is worried that they could be in those difficult situations should know that they can call their lender for advice without any impact whatsoever on their credit score. Lenders will also provide support to customers who are up to date with payments to switch to a new mortgage deal at the end of their existing fixed-rate deal without another affordability test, and provide well-timed information when their current rate is coming to an end. Taken together, those measures should offer some comfort to those who are anxious about the impact of high interest rates on their mortgage and provide support to those who get into extreme financial difficulties.
Catherine West
May I return briefly to the point made by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)? Last time I asked the Economic Secretary to the Treasury about the number of renters estimated to be impacted by this situation, he did not have an answer. Do Ministers on the Treasury Front Bench have an answer today on how many renters will be affected by this crisis?
John Glen
The interventions we have made provide significant scope for assistance. To find an accurate number would be very difficult, but we will continue to work with industry and with lenders to find maximum flexibility and interventions to support them at this difficult time. While we roll out those measures, tackling inflation remains the No. 1 priority of the Prime Minister and the Government. Inflation makes every person in this country poorer and it has to be tackled head-on.
Notwithstanding that, I am fully alive to the fact that some people remain in real distress. I assure hon. Members and their constituents that we will always stand ready to help where we can. That is why at the Budget we announced that the energy price guarantee would be extended for a further three months. That extension was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to those very high oil and gas prices, caused by global circumstances—including, of course, Russia’s invasion of Ukraine.
Alongside holding down energy bills, freezing fuel duty, increasing universal credit and raising the national living wage and pensions, we are giving up to £900 in cost of living payments to households on means-tested benefits. Taking those measures together, the Government are already supporting families with one of the largest support packages in Europe, worth £3,300 per household on average.
The Government’s approach makes targeted interventions to protect the most vulnerable, while maintaining a laser-like focus on tackling inflation. I believe that that stands in sharp contrast to some of the policies offered by opposition parties. The Liberal Democrats are calling for a £3 billion mortgage protection fund, which would simply pour fuel on the fire of inflation, making it harder to bring prices down. That would be such a damaging move that it is apparently even too extreme for those on the Labour Front Bench to contemplate.
However, I would say that the Labour party is not without its own flaws when it comes to offering unfunded inflationary policies. The media reports that the right hon. Member for Doncaster North (Edward Miliband) has had his wings clipped by the Leader of the Opposition for his excessive spending proposals, but in reality the shadow Chancellor is only slightly delaying Labour’s £28 billion spending spree to the second half of the next Parliament—an amended timetable, but the same reckless policy.
We said that we would halve inflation, not because it was an easy thing to do, but because it was the right thing to do. History and the best economic insights that we have today tell us that the best way to beat inflation is to stick to our plan, backing the Bank of England’s monetary policy decisions. We will stick to the plan, because it is the only way we can give relief to families and reprieve to businesses. As we have done before, we will face down these economic challenges while supporting the most vulnerable and setting us up for economic growth.
Since a Conservative Government came into power in 2010, the UK economy has grown more than those of major countries such as France, Italy, or Japan, and about the same as Europe’s largest economy, Germany, which is now in recession. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We will now overcome this inflationary period, and offer a helping hand to those who need it as we do so.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the SNP spokesperson, I think I will have to give some firm guidance about time limits. My initial guidance would be six minutes, just so the first speaker on the Government side is aware.
Stewart Hosie (Dundee East) (SNP)
The right hon. Member for Leeds West (Rachel Reeves) raised the spectre of those commentators who are suggesting that we crash the economy into recession as a way of tackling inflation. Others have commented on that over the past week or so. The more that I think about it as a serious proposal, the more hideously grotesque it appears that, in the midst of all this, there are people out there, swarming around with daft ideas, suggesting that poverty and penury are actually an economic tool.
The Minister spoke in support of his Government’s amendment (a), which starts by welcoming
“the Government’s drive to halve inflation, grow the economy and reduce debt”.
Inflation is not halving; it has stayed at 8.7%. Core inflation has gone up to 7.1%, real gross inflation is at 18%, and the debt to GDP ratio has hit 100%. I know that politics is politics and that there are things Ministers will have to say, but if they bear little resemblance to reality, they are unlikely to believed.
I am thinking of some of the very early contributions to debate. The hon. Member for Eastleigh (Paul Holmes), who is no longer in his place, referred to other people’s plans. I think it is just extraordinary to listen to Tories being critical of anyone who simply thinks that people having a warm, dry and affordable house for themselves and their family is anything other than a rather sensible ambition.
According to Moneyfacts, the average two-year fixed-term mortgage is now sitting at 6.23%, not far off the post-mini-Budget peak of 6.6%. Although it is true that, on Friday, the UK’s biggest lenders signed a deal that included, as part of this new mortgage charter, a commitment to give homeowners a 12-month grace period before their home is repossessed—I welcome that and the other measures—the deal actually forms a rather limited relief package that certainly will not offer help to everyone who needs it. That came after the Bank of England raised interest rates to 5%—the 13th consecutive rise, and a larger-than-expected increase—meaning that we now have the highest interest rates in 15 years.
I support 100% the operational independence of the central bank, but I wonder whether that was the right approach. We all know that there is a lag between interest rates going up and the impact of driving inflation down being demonstrated. I wonder whether we are repeating a mistake that we have seen many times in this country: interest rates not rising quickly enough at the beginning, and continuing to rise too late at the end, turning a bad situation into a recession, or making a recessionary situation worse than it need be.
The pledge on forbearance is one of the main measures in the agreement struck with lenders. The lenders that have agreed the pledge include NatWest, Lloyds, Santander and Barclays, which, as the Chief Secretary to the Treasury said, control 75% of the market—that figure has increased to 85%. As we have heard today, as well as in yesterday’s statement, that agreement does not cover all the lenders, nor does it cover all mortgage-holders, some of whom are in very specific circumstances. We heard from a colleague yesterday about people who have residual Northern Rock mortgages and are tied into specific deals. It would be helpful to find out, for example, whether they will be able to take advantage of the opportunities that the charter allows for. The SNP welcomes what has been said so far, but it is clear that the mortgage charter will offer limited relief to the millions of households across the UK who are facing soaring mortgage costs.
Let us look at the detail. As I said, the average two-year fixed-term mortgage is now sitting at 6.23%, not far off the 6.65% peak. The average five-year fixed-term mortgage is at 5.86%. Those rises mean that, at the two-year rate, repayments on a £150,000 mortgage—not far off the £184,000 average price of a house in Scotland—are now £990 a month, compared with £660 a month on the average rate available in December 2021, before the hike in borrowing costs began. From £660 a month to £990 a month is a 50% rise in two years. That is a huge amount of money: it amounts to an increase of £3,900 a year compared with December 2021. We know that wages have not kept pace with inflationary costs, and that the people who are struggling with this have also been struggling with soaring energy bills over the past 18 months. People are really hurting.
I feel for people who have done the right things: those who are earning reasonable wages but are not rich, who managed to save a 5%, 10% or 15% deposit, and who capped their mortgage at maybe three times their earnings and did not borrow excessively. I do not know anyone in the real world who has a spare £3,000, £4,000 or £5,000 a year to sling at the increase in their mortgage costs after facing all the other inflationary pressures over the past year.
For many, the measures announced will be of limited relief. We know, for example, that lenders will be quite selective about who they allow to take the interest- only option. David Hollingworth, associate director at L&C Mortgages, noted:
“Going interest-only can work but only for the right kind of borrower, someone with a good financial history of repayments, someone with plenty of equity in their home who is just looking for some breathing space.”
That does not cover a lot of our constituents, who may not have a lot of equity at all and may, for one reason or another, have found themselves missing a payment here or there because of other pressures.
The president of the Resolution Foundation highlighted that the approach of consecutive UK Governments to managing the economy and the housing market has led to lower levels of home ownership, with those who own their homes feeling “intense pain” as a result of rising interest rates. He said:
“There is a group of several million people who could be seeing their mortgage costs rise by about £3,000 in a year and that is a lot for a middle-income household to bear. So it is going to be tough for them. Conservatives believe in the property-owning democracy”—
although they are doing rather a good impression of trying to destroy it. He went on:
“We’ve seen tragically a narrowing of homeownership over the last decades. That in turn means that if you’re trying to use interest rates, mortgage rates to drive disinflation, you’ve got a smaller group to operate on and they feel more intense pain.”
The Resolution Foundation also noted that more than four in 10 low-income households are spending more than 40% of their income on mortgage repayments. That is extraordinarily stark. When one considers that something in the order of 116,000 households are coming off fixed-term deals every month—perhaps the Chief Secretary to the Treasury can confirm that number—those people who are already spending more than 40% of their income on housing costs will find things extremely tough indeed if they are hit with a 10%, 15%, 20%, 30% or 40% rise in their mortgages this coming year.
The Resolution Foundation also warned that 31% of low-income mortgage holders say that their fixed-rate mortgage will come to an end between now and the end of the year, and that a large number of that group are already spending more than 40% of their income on their mortgage, as I said. It was critical of the fact that the Bank of England does not have a duty to consider the implications that its actions might have on the housing market or mortgage holders. I have asked the Government a number of times recently about reviewing whether an inflation target is the right primary target for the central bank, and whether the tools that the Bank has are appropriate. I wonder whether we should have a growth target, for example.
In New Zealand, considering the impact of rising rates on the housing market is part of the central bank’s remit. The housing market is such a big part of Britain’s economy that I am sure the Bank of England will have considered the impact of rate rises, but it is also clear that its job when setting interest rates is to focus entirely on getting inflation back to 2%, and it has no obligation to look at the impact on the housing market. I wonder whether we should review the targets that the central bank has and the tools it is given.
We know that soaring mortgage costs do not just impact on mortgage holders; the costs of increased mortgage payments are also passed on to renters. In Scotland, we have offered some protection through the rent cap, but such a measure has not been introduced down here. It is interesting that Matt Downie, the chief executive of the homelessness charity Crisis, has said that hundreds of thousands of people could be left unable to cover their rent and at risk of losing their homes:
“Low income renters face a catastrophe—they can’t rely on housing benefit as it’s been frozen since March 2020 and is completely inadequate. There isn’t nearly enough social housing to go round and over a million households are on waiting lists for the few genuinely affordable homes we do have.”
The mortgage crisis and the inflationary crisis have thrown into stark relief the absence of a proper housing policy, particularly from this Tory Government, the size of waiting lists and the costs associated, even now, with getting a rental. Official figures this week showed that private rental costs rose at an annual rate of 5% in April—the sharpest pace on records dating back to January 2016—while rents outside London surged at the fastest rate on records going back to 2006. The Institute for Fiscal Studies also warned that interest rates hitting landlords’ borrowing costs were part of the reason for the very large increases in rents.
The pain is being felt across the board—well, almost across the board—for renters and mortgage holders, on top of all the other inflationary pressures we have seen. The message should be clear to the Government: whether you are a mortgage holder or a renter, holding your nerve will not pay the bills; holding your nerve is not a policy to fix these problems.
Suzanne Webb (Stourbridge) (Con)
I rise to oppose the motion in the name of the official Opposition and to support the Government amendment. The Labour motion is narrowly worded. Yet again, it tries to invoke hysteria and crisis and to undermine those we serve, and it completely misses the facts. We cannot allow the electorate, especially young people, to be indoctrinated by the sort of nonsense contained in the Opposition’s motion, which claims that it is all the Government’s fault.
These are the facts. First, on mortgage rates, the impact of the global financial crisis under Labour back in 2007 meant that the base interest rate fell to its lowest level for 300 years. Starting at 5.7% in July 2007, rates had fallen to 0.5% by March 2009, with a further fall to 0.25% in August 2016. There was a very slight rise back to 0.5% in November 2017, and then in 2021, as covid-19 loosened its hold on us all, globally we were met with persistent inflation caused by a worldwide supply chain crunch and, of course, Putin’s war. Those are the simple truths.
Suzanne Webb
I am going to make progress, because the Minister was very generous in taking interventions, and I want to ensure that everybody gets to speak.
The Bank of England, not the Government, pushed the rate up to 0.25% in December 2021, to 0.5% in February 2022 and then to 0.75% in March 2022—the highest it had been since the summer of 2018. That has continued, and we are now at 5%. I must agree with the Chancellor that there were flaws in the Bank of England’s economic forecasting. As the Governor himself has said, the Bank’s forecasting has not been accurate. It was for the banks to assess the financial competence of those applying for mortgages in the first instance. Banks would have understood that interest rates were artificially low—the lowest in 300 years of history—and that at some point they would naturally go up again, and they did. It took the huge global fiscal shock of a pandemic and a war in Europe to push interest rates up to where they are now, but such interest rates were common under Labour before it crashed the economy in 2008. We should not forget that.
If we look at the rates before the economy crashed and before Labour bled our economy dry and left no money, it keeps the interest rates “crisis” that Labour likes to talk about in perspective—or, to put it more succinctly, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said in the note he left to his successor in 2010,
“Dear Chief Secretary, I’m afraid there is no money. Kind regards—and good luck!”
That about says it all, and I will never tire of repeating it to remind people what they could be voting for.
Now for more facts. The employment market is strong. I recently visited my local jobcentre in Stourbridge. Those who worked there told me that the local job market is buoyant and that young people in particular are finding jobs. According to the International Monetary Fund, the OECD and the Bank of England, the prospects for the UK economy are bright. Even on mortgages—the subject of this debate—defaults remain at pre-pandemic levels, and the proportion of disposable income spent is almost half what it was in the 1990s. Banks around the world are raising interest rates to fight rising inflation caused primarily by Putin and a global pandemic. This is a global problem. Interest rates are higher in the US, Canada and New Zealand.
I absolutely cannot allow the Labour party’s economic incompetence to go unchallenged. Black hole after black hole after supermassive black hole is unearthed by my colleagues and I, as Labour seeks to twist and turn into whatever position of opportunism it favours in any given week. My right hon. Friend the Chief Secretary to the Treasury has uncovered another casual £3 billion from the shadow Chancellor’s U-turn on the digital services tax. That is in addition to another black hole 10 times the size—£30 billion, simply gone—from Labour’s plans to scrap business rates without replacement. Naturally, I look forward to whatever reply my right hon. Friend receives, but I doubt it will be forthcoming.
Perhaps the Opposition could tell us how Labour’s £90 billion of unfunded spending commitments would lead to lower inflation and interest rates—I await that with interest—or how Labour’s plans for £28 billion of borrowing would lower inflation and interest rates. The Institute for Fiscal Studies certainly does not think it would, and neither do I. We should also be mindful of not dragging language to the extreme. In Labour’s language, everything is a “crisis” these days—cost of living crisis, energy crisis, mortgage crisis. It cheapens the term and undermines all we serve.
I support the Government amendment, although I do not think we needed to use the word “charter”. I think this is just banks doing the right thing for their customers, nudged by a fiscally responsible Government. I will finish as I started, by saying that we cannot allow the electorate, especially young people, to be indoctrinated by the sort of nonsense contained in the Opposition’s motion, which tries to claim that it is all the Government’s fault. It is not. I will be supporting the Government amendment.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
The next speaker will have six minutes, but after that I will have to reduce the time limit to five minutes.
Derek Twigg (Halton) (Lab)
Every day I hear from constituents, as many of us do, who are facing hardship as the cost of living crisis spirals out of control. It is truly extraordinary that in Britain today, people across our communities are having to worry about whether they can afford to heat their homes or feed their families, which is a major worry that we will see again as the weather cools down and we come into autumn and winter this year.
We now face another crisis, courtesy of a Conservative Government who seem entirely clueless as to a solution: a mortgage bombshell that leaves homeowners wondering whether they can even keep a roof over their heads. Let us be clear about the scale of the mortgage bombshell. In Halton, there are currently 9,600 households with an average mortgage payment increase of £1,600 a year. I hear from constituents who have lost mortgage deals and simply do not know what to do. Young people trying to buy their first home have been cruelly disappointed; for many, the dream of their first home will not be realised any time soon. That is another way this Government are failing young people. Others tell me that their mortgage costs are rapidly becoming unaffordable.
Worse still are the heartrending stories I hear from constituents who are about to lose their homes altogether. In Halton, the waiting list for social housing is huge, with over 4,000 households on it. Halton Borough Council is doing everything it can to help those in desperate need of a home, but as in so many other parts of the country, its services are stretched to breaking point.
Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)
Time and again I meet people in my surgery who can barely afford to feed their family, let alone afford rent hikes. Does my hon. Friend agree that people in communities across the country cannot afford to pay the price of a Tory Government?
Derek Twigg
My hon. Friend makes an important point, and she is absolutely right. Places such as my constituency, with some of the highest rates of poverty in the country—which I will come to shortly—are finding it particularly difficult.
There are homeless children from my constituency living in hotels out of the area, who are struggling even to continue to attend their local schools. Recent figures from the End Child Poverty coalition show that 30.9% of children in Halton are living in poverty, but at Widnes food bank donations are now falling below demand. That food bank is purchasing food using monetary reserves. Food inflation has adversely affected the ability of people who had previously donated food to do so—what a disgrace in this modern age. This is at a time when rising numbers of people in my community need to turn to food banks because they cannot afford the essentials that we all need to survive. The situation is becoming unsustainable.
I have been contacted by an increasing number of constituents whose landlords are being forced to sell up as they cannot afford their own mortgages. Nearly 200 households in my constituency are classed as priority homeless, and less than a handful of social housing properties become available each week. There is little point in telling those people to look into private renting, as local housing allowance falls even further behind the spiralling cost of rent. In Halton, local housing allowance for a three-bedroom home is £593 per month, but the current lowest private rents are £750 per month. Local housing allowance for a two-bedroom home is £498 per month, with the current lowest private rents at £650 per month. More and more of my constituents face the nightmare of homelessness, and more and more cannot afford the essentials needed to survive.
What is truly shocking is that this did not have to happen in this way. Last autumn’s mini-Budget, founded on unfunded tax cuts and pushed through without proper scrutiny, was an exercise in economic recklessness that has left hard-working people having to shoulder yet another burden. There is also the impact of inflation, of course, and the fact is that this Prime Minister, when he was Chancellor—I challenged him on this at the time—did not take inflation seriously enough. We know the impact that inflation is having on the cost of interest rates and, therefore, mortgages. The Government have created this catastrophe, and they need to take more urgent steps to address it.
Labour’s five-point plan could help to ease the crisis. I urge the Government to consider the measures that we are putting forward—requirements that would cover the whole mortgage market, unlike the Government’s charter with selected banks. Local housing allowance must be increased if we are to stem the tide of evictions that threatens to completely overwhelm housing services across the country.
This is Government incompetence, plain and simple. It is hurting hard-working people, and it is high time that the Tories stop thinking about how they can grab cheap headlines and instead focus on doing more to really help the many people who are about to lose their homes. The fact remains that this country is worse off under the Tories—people feel worse off themselves. We are seeing failings across public services of a sort I have never seen in my lifetime, and the fact is that this Government need to go now.
James Wild (North West Norfolk) (Con)
It was Margaret Thatcher who said that
“inflation is the biggest destroyer of all—of industry, of jobs, of savings”.
As ever, she was right. That is why the Prime Minister put halving inflation as his top priority at the beginning of this year, along with growing the economy, because if inflation is not squeezed out of the system, everyone will become poorer.
Like central banks across the world, the Bank of England is raising interest rates to combat high inflation, and it is worth noting that rates are actually higher in the United States, Canada and New Zealand. However, the combination of high inflation and interest rates means that people are facing higher mortgage payments, which is causing concern for my constituents. In North West Norfolk, 24% of homes are owned with a mortgage or loan, compared with a national average of 30%—I declare an interest as one of those homeowners—and those families facing higher monthly payments are having to make difficult choices about their household spending, as indeed are people who are renting. That is why the Government are right to have put in place £94 billion-worth of support, a package worth on average £3,500 per household—one of the most comprehensive in Europe.
However, it is equally the case that the Government should not take action that would add to inflationary pressure: for example, by borrowing an extra £28 billion each and every year, as the Opposition are committed to do. The Institute for Fiscal Studies has said that the effect of such action would be to increase inflation and drive interest rates even higher. That is the damaging reality that Labour’s plan would lead to. Instead, along with the cost of living support package—I welcome today’s news that 95% of the disability payments have already been made—we need to take action to ensure that banks and building societies treat people fairly and introduce new protections.
As such, I support the measures in the new mortgage charter. It will help people who are worried about making their monthly mortgage payments by adding an option to switch temporarily to an interest-only mortgage, or to extend the term in order to reduce their monthly payments. The Chancellor gave the example that on a £200,000 mortgage that could lead to a saving of £350 a month, which is material. Importantly, people will be able to switch back to their original term within six months.
People who are approaching the end of a fixed-rate deal will of course be concerned about the rates in the market. Those people will have the opportunity to lock into a rate earlier, and then to change that at any point up to the new deal coming into effect. We have heard about repossessions. Where constituents have fallen behind with mortgage payments, it is incredibly worrying for them to think that they might lose their home. There are already strong protections in place to ensure that that is an absolute last resort, but in the current circumstances it is right to strengthen those protections. Now there will be a minimum period of 12 months from the first missed payment before any such action can be taken—double the period that the Labour party has proposed.
We in this House should be responsible and offer practical support, and the best advice for anyone who is worried about meeting their payments is to talk to their lender. Two weeks ago, I was in my local branch of the Nationwide building society, talking to the team there about the cost of living advice that they are giving to help my constituents. I welcome the fact that Nationwide is one of the lenders that has signed up to the charter. I hope that the rest of the market will also do so and, importantly, will tell customers about the new flexibilities, in order to reduce any concerns they might have.
Curbing inflation is not easy, but it is vital to relieve pressure on family budgets. In his column in The Sunday Times this weekend, the respected commentator David Smith looked at the prospects for inflation and the need for monthly consumer prices index increases to be smaller than a year earlier. He pointed out that from May to December last year, CPI rose by 4.7%, driven by higher energy costs caused by the illegal war in Ukraine. In the year prior to the pandemic, the increase in the same period was just 0.6%. He noted that a rise of just under 2% in CPI from now until December would deliver an inflation rate of 5% by the end of the year. I hope he is right, because getting inflation down must be the priority, and the target remains to halve it by the end of the year. That is what businesses and families want.
Throughout covid, the Government supported people, and in the face of current higher costs, support for the most vulnerable continues. Now, with the additional measures in the charter, people will see their mortgages better protected in the face of higher interest rates. That is the practical action that this Government are taking. The alternative put forward by the Opposition parties—more borrowing and more spending—would simply make inflation higher and everyone poorer.
Peter Dowd (Bootle) (Lab)
In advance of today’s debate, I read the contents of yesterday’s statement by the Chancellor on the mortgage charter. The answers he gave went from bad to worse, and beyond. Besides not answering many of the questions put to him, those he did answer—I use the word “answer” loosely—were answered nonchalantly. Then, when he agreed with the right hon. Member for Wokingham (John Redwood) that it was all the fault of a lack of productivity, above all in the public sector—that nurses, doctors, teachers, social workers, border staff, local government staff and the other 5.8 million people who work in the public sector are causing misery and problems for themselves—I realised that the nonchalance was simply a cover for incompetence at best, or ineptitude at slightly better.
Peter Dowd
I will not, because I do not want to take up too much time at this stage.
Clearly, the Chancellor has lost the plot. What about the productivity of the Government—the most unproductive Government in my lifetime? There was no mention of that in his statement. In that exchange, the issue of supply-side responses was also referenced. If either the Chancellor or the right hon. Member for Wokingham had read page 12 of the Library’s briefing yesterday, that would have confirmed to them that supply-side pressures and bottlenecks are easing and the cost of shipping has come down to pre-pandemic levels, but of course, that is a fact that the Government do not want to listen to.
My initial assessment proved to be correct as the debate wore on. In response to a question from my hon. Friend the Member for Sefton Central (Bill Esterson) about the reasons why many people in Europe are paying significantly less in mortgage payments than in this country, the Chancellor defaulted to the answer he gave to the previous question from my hon. Friend the Member for Chesterfield (Mr Perkins). He went from turgid to orotund and then back to turgid, with a little bit of circumvention in the middle. I thought I was listening to the Radio 4 programme “Just a Minute”, but without the humour.
The fact is that having a roundtable with the banks is all very well and good—a bit of finger wagging, a wink and a nod here, knowing looks there—but while the Chancellor looks for a solution or tells the banks in no uncertain terms that it is an issue that needs to be resolved, he is doing little to ease the pressure on millions of our constituents who have a mortgage, and there are millions of them. He said it needs a solution, and of course it does—I think we can all agree, without any contradiction, with that pearl of wisdom from the Chancellor. My cat Gilly knows there needs to be a solution. The only problem is that the Chancellor did not present us with one—unless, of course, that part of his statement was left out of Hansard.
I will not go into too much detail about how the current mortgage crisis sits alongside the cost of living crisis, the mental health crisis, the health crisis, the housing crisis and the many other crises inflicted on the country by the Conservative party—they have been covered on other occasions, including yesterday and today—but there are many thousands in my constituency, and millions across the country, who will be paying thousands of pounds more in mortgage payments as those fixed-term deals come to an end. What about the thousands of mortgage prisoners, many in my constituency, who have been hit even harder without Government intervention?
I want to bring to the attention of the Minister, and vicariously to the attention of the Chancellor, an article in the Financial Times today by Helen Thomas—I hope she will forgive me if she feels I am cherry-picking from the article, which I am not. She makes excellent points, and these are issues that have to be addressed by the Chancellor sooner rather than later. She says:
“This crisis should prompt longer-term questions about the peculiarities of the UK market”—
meaning the mortgage market—and that
“with little lending at above five years fixed and essentially none above 10 years, the UK looks an outlier even in Europe”.
In her final paragraph, Ms Thomas says:
“This interest rate shock will prove uncomfortable for many. But it should also prompt fresh debate on what might create a less dysfunctional mortgage market in the future.”
The question for the Chancellor is whether he is up to the challenge in effect laid out in that analysis. Were any of those points raised in his roundtable with the banks on Friday, and what commitments did he get from the banks in relation to easing the pressures on my constituents? Crises are years in the making, and the longer this Government stay in power, the longer this crisis will continue, so it is time for the Tories to go.
Owen Thompson (Midlothian) (SNP)
During the French revolution, the Queen of France supposedly said, “Let them eat cake”, after being told that her subjects were starving with no bread. Today, as the country faces a mortgage meltdown, our multimillionaire PM tells people that
“we’ve got to hold our nerve, stick to the plan and we will get through this.”
I am not sure whether he is looking to model himself as a modern-day Marie-Antoinette, but whether or not that was his intention, his gall is quite beyond belief. I will leave it to others to say that the Prime Minister is guilty of projecting
“an extraordinary, Orwellian, meaningless, evasive word salad”
when he speaks. Nor will I say that the PM is
“as much of a mendacious, narcissistic sociopath as his previous boss”.
These things are much better delivered by Ben Elton himself.
However, I will say that we are past crisis point. The Bank of England has raised the base rate 10 times since December 2021, from 0.1% to 4% as of February. Meanwhile, figures from the Office for National Statistics show that average weekly earnings have fallen in real terms in the year to December 2022 by 3.1%, which is one of the largest falls in growth since comparable records began in 2001.
Scottish homeowners are suffering for Westminster’s failure. As a result, independence becomes ever more necessary for ordinary Scots, so that they can stop paying the price for UK Government self-inflicted messes. Stronger direct action is needed to protect vulnerable homeowners from soaring mortgage costs. Like my right hon. Friend the Member for Dundee East (Stewart Hosie), I welcome the limited action that has been taken so far, but a purely voluntary scheme that stops repossessions for 12 months and allows for lower payments for six months is not enough to protect many householders from this disaster.
My constituency of Midlothian is especially vulnerable to this Westminster-triggered chaos. Midlothian’s population is growing, placing increasing demands on services that aim to tackle poverty. Just under a quarter of Midlothian’s children—4,400—were living in poverty going into the pandemic and the cost of living crisis. Midlothian has higher rates of economic activity and lower rates of unemployment than the Scottish and UK averages, but we also have lower average wages across some groups, in common with many other former coalfield communities. The falling value of real wages will hit many residents hard, and the higher than average house prices in Midlothian suggest a vulnerability to economic downturn and other cost of living pressures, particularly mortgage hikes. The average price of a house in Midlothian in October 2022 was £243,500, compared with the Scottish average of £193,730. This combination of higher house prices and lower wages could spell disaster for many.
The Chancellor’s mortgage charter is really a sticking plaster on a broken arm, and my constituents deserve better. These residents have been forced to stretch their budgets to get on the housing ladder in the first place, and are now utterly vulnerable to rising costs and labour market turbulence. It is hard to believe that the Tory party was ever seen as a bastion of high finance and fiscal propriety. Del Boy and Rodney could do a better job. In Scotland, we are fortunate that we have an alternative way out of this mess, and now more than ever we need to make sure we cast this PM and his ultra-rich cronies into the dustbin of history by forging ahead with independence.
Naz Shah (Bradford West) (Lab)
The Tory mortgage bombshell is the latest Tory-created crisis to hit hard-working families, adding to the litany of errors over the last 13 years made by an economically arrogant, incompetent and ignorant Tory party. According to the financial data provider Moneyfacts, the average two-year fixed residential mortgage rate has risen to 6.23%, up from 6.19% just last Friday. This is the highest since last November, when the property market was thrown into utter chaos after the Tory mini-Budget, otherwise known as the Budget that broke Britain. Because of the mess they have created, banks are now withdrawing mortgage deals, and the average household is facing a hike of almost £240 a month more on their mortgages.
In my constituency, this latest hike in interest rates will impact nearly 7,500 households, with an average increase in payments of £1,300 a year. As Opposition Members have stated already, these increases come at a time when families are already living hand to mouth. The sad reality is that Conservative Members just simply do not get it. Mortgage payments are up—by £1,300, if not more—while energy prices are up by thousands of pounds per household, supermarket food prices are up by 15% this year, council tax is up by 5% and car insurance is up on average by 43%. Again, they just do not get it.
The Prime Minister probably does not understand much, but who can blame him when he is sitting in his private plane, wearing his £3,000 suit and sipping coffee out of his £180 mug, with his head stuck in the clouds. Meanwhile, back down here on earth, in places in the real world such as Bradford West, hard-working families are being forced to skimp on daily necessities such as three meals a day and are on the brink of collapse. The UK economy’s ever-worsening crisis is not a recent misfortune. It is the consequence of a total abdication of economic prudence by the Tories over the last 13 years. The poor state of the UK economy today cannot be solely pinned on a global crisis. We need to call it out loud and clear that our ailing economy has been orchestrated by a string of Tory self-inflicted policy errors.
Every country faced economic impacts due to the pandemic, but our economy bounced back at the slowest rate of any G7 nation, with our GDP at the beginning of 2023 0.5% lower than at the end of 2019. Every country faced the economic impact of the global financial crisis, but reckless Tory austerity since 2010 has resulted in more than £0.5 trillion of lost public spending and a weaker economy. All the G7 nations faced the effect of rising energy prices caused by the war in Ukraine, but the UK’s over-reliance on energy, coupled with the Tories depleting our ability to generate our own energy, has left us the most poorly equipped to deal with rising energy prices.
The Tories’ disastrous 13 years in charge will be remembered for crashing the economy, poor growth, sky-high inflation, worsening living standards and the disastrous management of Brexit. Each of those alone has battered hard-working families, who have been plunged into poverty, but the combined litany of self-inflicted, delinquent and scandalous errors has left the UK a whole lot worse than in 2010.
We must hold the Conservatives to account, and the worst thing is they were warned. Martin Lewis, the finance expert, has said he warned the Government about mortgage market issues last year. He said about the current mortgage shock:
“Yet now the time bomb has exploded and we're scrambling about what to do.”
That is what the Tories do: they sleep at the wheel, then try to deal with the wreckage after the crash, and then blame everyone else.
On action on mortgages, it was Labour’s announcement that forced the Government to take urgent steps. However, Labour has called for mandatory measures to be placed on banks so that no one is left without support; the Government measures are completely voluntary and do not cover all of the mortgage market, with some 15% of the market for main residences missing out and no buy-to-let coverage.
Recently, the former Prime Minister fell off his tightrope. Now the Tory party has got rid of the clown, it is time to get rid of the circus. Give us a general election.
Gareth Thomas (Harrow West) (Lab/Co-op)
The rise in interest rates last week to a 15-year high will be profoundly worrying for many of my constituents, particularly the many homeowners with a mortgage, but also those privately renting who are worried that their landlord might now put up their rents at a time when it is very difficult to find a genuinely affordable home to rent in my constituency. It is estimated that there are 8,900 households in my constituency facing an average increase in their annual mortgage payments of £5,400. In the neighbouring Conservative-held seats of Harrow East some 7,800 households face an estimated annual mortgage payment increase of £6,200 and in Ruislip, Northwood and Pinner 9,500 households face an average annual increase in mortgage payments of some £7,000.
Harrow has one of the highest rates of home ownership and owner occupation in London. Families move out to Harrow because family homes have traditionally been more affordable than in inner London, and we have excellent schools and very good transport links. The Tory party’s mortgage bombshell threatens the dreams of too many Harrow families—dreams of owning and investing in their own homes, of being able to always afford the rent for the home they live in, of being able to provide a stable and secure place to bring up their children and to look after older family members and still to be able to afford a good quality of life with good holidays and trips out. Those ambitions are much tougher now for even more families in my constituency because of the Conservative mortgage bombshell. In short, close to 18,000 households in the London Borough of Harrow face an average increase in mortgage payments of between £450 and £580 a month.
Those figures are devastating for family finances. Ever more mortgage deals have been withdrawn by the banks. Moneyfacts data suggests that the typical rate on a two-year fixed rate loan have increased to almost 6%, double the rate of a year ago, and the independent Resolution Foundation estimates that by 2026 some 6.5 million households across the country will have been affected by the post mini-Budget rise in mortgage rates. It is not just homeowners who are going to be hardest hit: charities and property experts are understandably warning that the rapid rise in borrowing costs is not just having an impact on owner-occupiers but is contributing to record rent increases.
I am fortunate in Harrow to have a community that is determined to do what it can to help those in real need. Harrow food bank, London’s community kitchen, My Yard Harrow and Soul Kitchen Harrow provide an impressive and dedicated offer to families in dire need. They should not have to do that, but energy bills and food prices are already high, and if mortgage costs continue to feed through into rent increases, the pressure on lower-income families will be even more profound and disturbing.
Conservative Members like to claim that what is happening here is part of a global crisis or is just down to the Bank of England’s incompetence. There are of course global factors in play and it is also true that the Bank of England has questions to answer, but the disastrous mini-Budget last year and 13 years of economic failure have left our economy far weaker than it should have been, and the mortgage crisis is clearly worse in the UK than in other European countries. As my right hon. Friend the shadow Chancellor of the Exchequer said, mortgage rates in Germany, France, Ireland and the Netherlands are typically lower than here.
I strongly support the plans set out by my right hon. Friend. She has forced the Chancellor to take some action, but it does not go far enough to help those renting and those facing fast-rising mortgage costs. Mandatory action is required to support mortgage holders. It should not be up to the banks and those offering mortgages to decide whether they want to do the right thing; they should be forced to comply and to help, and we must certainly end no-fault evictions straight away.
The British people deserve better than they are getting from the Conservative party. Homeowners in Harrow should not be suffering the ever-increasing burden of higher mortgage costs. Ministers could do more to help. They should not be leaving 1 million people unprotected; they should back Labour’s plan today and then they should call a general election.
Helen Hayes (Dulwich and West Norwood) (Lab)
Ever since I was first elected in 2015 I have seen the pressures of the cost of living increase in my constituency. I meet regularly with the manager of our local food bank, and every time she tells me that the number of parcels it is delivering has reached a new record, that the challenges that result in people needing emergency help are becoming more complex and intractable, and that some Government policy decisions have directly contributed to a step-change in the level of need.
We have long seen spiralling private rents, unacceptably low pay and punitive changes in the benefits system creating terrible pressure on household finances, but the past nine months have seen a further increase in cost of living pressures, which are causing even previously comfortable household finances to buckle and break. People have seen their energy bills rocketing, the cost of essential food creeping up week by week, and unfeasibly high childcare costs. Now, thanks to a Prime Minister and Chancellor who have delivered more damage per day in their short tenure than any of their predecessors ever did, many of those same people are now staring down the barrel of imminent unaffordable mortgage increases.
In my constituency, 9,400 households will face a mortgage cliff edge this year, and they are expected to face an average payment increase of £6,300 a year as they negotiate new mortgage deals. This is a cause of profound distress and anxiety. Some of my constituents are worried that they stand to lose all that they have worked for—the material security that underpins their family life.
What is the Prime Minister’s response to this calamity and the profound distress it is causing? “Hold your nerve”, he says. That might be appropriate advice for one of his investor pals looking at some spreadsheets that are having a rocky ride, but it is a totally tone-deaf response to my constituents who are looking at their bank accounts and finding that the amount of money coming in simply will not cover all the bills they are required to pay. A voluntary agreement that covers some, but not all mortgage providers and offers only short-term measures is also of little comfort to my constituents and mortgage holders across the country, who will be left anxiously waiting to find out whether their provider is one of those offering support and worrying about what they will do when the mitigation measures come to an end and the cliff edge is still there.
The Government’s measures, cobbled together under pressure, simply do not touch the sides of the problem. They are voluntary for the banks and do not cover all mortgage providers. While the focus of the Government’s piecemeal plans is homeowners, there is nothing at all to protect private renters. I am seeing a huge increase in the number of my constituents who are facing section 21 eviction notices—a practice that the Government promised to outlaw years ago—linked to increasing rents. Some of that is due to the increased mortgage costs faced by buy-to-let landlords, who are excluded from the Government’s measures and are passing their own increased costs directly on to their tenants, but some of it is simply unscrupulous landlords taking advantage of the current economic climate to hike up rents once again.
I speak with private renters in my constituency every week. They are beside themselves with worry due to the insecurity of their tenure and the risk they live with that at any moment they could face a devastatingly unaffordable increase in their rent. The legislation that private renters urgently need has been yet another casualty of the chaos and uninterest of this Government and their contempt for the public they are elected to serve. It is not for the want of time—this House has regularly been concluding its proceedings early in the day in recent weeks—but due to the lack of political will to drive forward urgently needed legislation, and that is shameful.
Labour has set out a comprehensive plan to ease the Tory mortgage penalty that would provide meaningful help to homeowners, whatever their mortgage provider, and protections for private renters. Without such a robust package of support, communities across the country face a catastrophic increase in housing insecurity and homelessness, destabilising families, affecting mental health and wellbeing, making it harder to hold down employment and causing deep hardship. My constituents urgently need more leadership, more urgency and more meaningful action from their Government. If this Conservative Government are too weak, out of touch and preoccupied to act—and they certainly are—it is time they stepped aside for a Labour Government who will be committed to delivering the change our country so desperately needs.
Tahir Ali (Birmingham, Hall Green) (Lab)
I will start by saying how serious this mortgage crisis is for many of our families. If we reflect on how the Government Benches are empty compared with the Opposition Benches, it demonstrates the seriousness with which the Government take this issue. No wonder the Prime Minister said, “Hold your nerve.” The contributions from Government Members on this issue, which affects millions of people, again demonstrate their lack of empathy and the lack of seriousness with which they take this important situation.
We are in this mortgage crisis because of the mini-Budget. Imagine for a moment if that had not been a mini-Budget, but a full Budget—what other crises would we now face after 13 years under Tory Government, when they have broken this country for millions of our residents and constituents? Overnight, damage was inflicted, with increased payments for millions of mortgage holders. Mortgages were withdrawn overnight and house sales were cancelled. Mortgage rates went up and payments went up for millions of our constituents. In my constituency, 7,700 households are affected by that decision, with an average increase of £2,700 a year. Many of those households are run by key workers—the very workers we were clapping. Today, we are slapping them in the face by saying, “We will not help you with a decent wage increase. We will not help you with mortgage increases. We will not help you with the cost of living crisis.” That is the reality we are facing.
People should not be fooled by the words of Government Members when they say this is a global crisis. Look at their 13 years in office. Where are we with mortgage rates now? Under the previous Tory Government, where were we with mortgage rates then? They were at 15%, and we had record repossessions. This is a repeating of history and of what the Tories are good at: making sure that the poor get poorer and the rich get richer. That is what they stand for. I challenge Government Members to tell me—I see one shaking their head—how many of their constituents and households are affected by this mortgage increase and what the average increase is. I will give way to the hon. Member for Totnes (Anthony Mangnall) if he knows the answer.
Tahir Ali
My heart bleeds for those people. The Government have denied millions of workers in this country a decent pay increase, which would have allowed them to deal with the cost of living crisis. But no, what does the Prime Minister of this country say? He asks the public to hold their nerve. This is not about nerve; it is about the basic fact that life has become unaffordable for millions of people as a direct result of the Government’s failed approach. Instead, the responsibility falls on ordinary hard-working people. Meanwhile, the Government continue to sit back and watch the chaos unfold.
What about the renters? Yesterday, the Chancellor failed to mention renters in his speech at all, showing the Government’s complete disregard for this mounting issue. Renters face an unsustainable increase in rents as landlords deal with mortgage costs. Renters cannot continue like this. The Government are not in a position to help ordinary hard-working families. They should give way and call a general election.
Marsha De Cordova (Battersea) (Lab)
It is an absolute pleasure to follow my hon. Friend the Member for Birmingham, Hall Green (Tahir Ali), who made an outstanding speech.
We are living in through a Tory economic crisis made in Downing Street and paid for by the British people—Members on the Treasury Bench would do well to listen. After 13 years of this Government, this country is left with the biggest fall in living standards since records began. We have weak growth, low pay and the highest inflation in the G7, and Brexit is continuing to cause harm to our economy through reduced productivity, trade and investment. If that was not enough, people are now being hit by the Tory mortgage bombshell, which is having a devastating impact on households across the country.
Many people have told me that they are at breaking point, especially as this bombshell comes after the pandemic and the cost of living and energy crises. The Prime Minister’s patronising advice at the weekend that people should just hold their nerve shows how out of touch he is with the mortgage struggles of people across the country, including my constituents. Battersea is one of the 25 worst-affected constituencies in the country, with 9,300 households facing an annual mortgage payment increase of £8,400. Average house prices in Battersea are already 15 times the average salary, and the increase in mortgage costs will put owning a home even further out of reach for many.
Under the Tories’ watch, housing affordability has got worse and worse, with the ratio of house prices to earnings reaching record levels in England. It is not just homeowners who are suffering; almost 2 million private renters will be hit by rent increases as landlords pass on those higher costs to them. That is even more worrying for low-income renters, who cannot rely on housing benefit to help meet that wage shortfall. As we already know, local housing allowance is not sufficient and currently does not cover much of the rent. We can wonder why the Government are not doing more to lift up LHA payments.
The Government are not offering any support for renters. The Chancellor failed to mention them once in his statement yesterday, and the Chief Secretary to the Treasury also failed to mention renters in his speech.
Marsha De Cordova
Well, he did not mention a renters charter and ending no-fault evictions—that is what he should have talked about.
The Government need to follow Labour’s lead by bringing in a renters charter to end no-fault evictions and introduce four-month notice periods for landlords. Why would they not? They will try to blame global factors for their mortgage crisis, but the cost of borrowing is higher here than in any other developed economy. Homeowners are paying thousands of pounds more than Europeans for new mortgages, as interest rates soar. Research shows that even before the latest hike, a new mortgage cost a typical household over £2,000 more a year than in France.
There is no question about who is to blame: the Tories. Why? Their disastrous kamikaze Budget last autumn crashed the economy, the pound and our global reputation, and continues to haunt millions of homeowners, who are shelling out extra on their mortgage payments. The Government have failed to act quickly and decisively against the mortgage cost rises. The Prime Minister was warned that they should take action, but they were missing in action and failing to do anything. Labour has a five-point plan, but the Government have only managed to come up with sticking-plaster solutions in the form of a voluntary agreement, when Labour suggested a mandatory one. The Chancellor’s plans do not go far enough. The Government could have applied much more pressure on the banks. Why will the Prime Minister and the Chancellor not apologise for their Government’s failure to control inflation, which led to the Tory mortgage penalty?
This country is buckling after 13 years of this Tory Government. Labour will bring back credibility and financial security to our economy and to households, to ensure that the people of this country can have better. We are done with 13 years of this Tory Government. We need a general election now.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Tory mortgage bombshell can trace its roots back to the disastrous mini-Budget and the so-called growth plan last September. Coupled with 13 long years of Tory failures, it left our country in a mess and thousands of families in an extremely vulnerable and precarious position. Last September, a mortgage adviser in Merthyr Tydfil contacted me and told me the effect of the mini-Budget and how devastated he and many of his customers were to see hundreds of pounds added to mortgage payments every month. The shadow Chancellor was right that we can never allow the Tories to forget that.
After 13 disastrous years and an even more disastrous few months, the UK has the highest inflation in the G7 and a mortgage crisis that is worse than in other countries—typically, mortgages are £100 higher than in other European countries. In Merthyr Tydfil and Rhymney, approximately 6,400 households are affected by the Tory mortgage bombshell, paying on average an additional £1,300 per annum, on top of the cost of living crisis, all caused by the economic failures of the Conservative party.
Recently, I raised in the Chamber the plight of our local food banks, which are struggling to cope under so much pressure from demand and reduced donations, as people across our communities are feeling the pinch and are less able to donate. The Tory mortgage bombshell will only make matters much worse. Indeed, the added stress placed on families with their homes under threat is just unforgiveable.
Citizens Advice is an agency that works hard to support the most vulnerable. I work closely with our local citizens advice bureaux on promoting events to maximise income. They have been telling me for some time how their workload has increased massively, particularly on debt advice. We learned from Citizens Advice this week that its clients with mortgages have seen their finances fall off a cliff, as the shadow Chancellor said. Every month, the amount they need to spend on things such as housing, bills and food is over £100 more than their income. The situation is not sustainable and causes anxiety, stress and deep worry for so many of my constituents and many thousands more across the country.
The previous Prime Minister has apologised for her mistakes, which led to a spike in interest rates following the disastrous mini-Budget last Autumn. However, the Minister should do the same. This whole rotten Government should hang their head in collective shame for the misery they are causing so many.
The Tory mortgage charter falls short in a number of key areas. Not all the mortgage market is covered by the charter. There remains a huge worry that more than l million households could miss out on support. The Government must outline the measures they intend to take to ensure that help will be available to everyone struggling to pay their mortgage. Perhaps the Minister can address that in his wind-up, and confirm that support will be available to all, not just to those who happen to have a mortgage with one of the banks on the Chancellor’s invite list for his cosy chats.
All too often, this Tory Government have been too slow to act. Renters are not even mentioned in the latest charter. In his statement on Friday, why did the Chancellor make no mention of the impact of this crisis on people who are renting? It is time for the Minister to outline whether he agrees that one way to provide support for renters is to back Labour’s proposal to halt no-fault evictions.
The Conservative party likes to think of itself as the party of home ownership, but with housing affordability lower than ever in recent years, that claim lies in tatters. There is very little or no assurance given to those looking to take their first step on to the housing ladder that they will not be held back by issues in the mortgage market caused by the Tory mortgage bombshell. The Government simply cannot brush things away and put the cost of living crisis down to global factors. The latest data on mortgage rates specifically shows that they have increased faster here in the UK than in the USA since the mini-Budget and, as we have heard, the gap in mortgage interest rates with our nearest neighbours means someone with a £200,000 mortgage will pay over £1,000 a year more in the UK. The reality is that the Government have no explanation for that, apart from that they have been grossly incompetent.
It is time for the Government to step aside, put an end to the misery faced by millions of families, call a general election, let Labour get on with governing and get this great country back on its feet.
Kate Hollern (Blackburn) (Lab)
Many households who are already contending with the cost of living crisis are now set to face a further squeeze on their budgets thanks to the Conservatives’ mismanagement of the economy.
It is shameful to see so few Members on the Conservative Benches. The hon. Member for Stourbridge (Suzanne Webb), who is no longer in her place, said the Labour party was scaremongering. I wonder if that is what she will tell the 9,000 families in her constituency who are facing a £2,400 a year increase in their mortgages. Perhaps she just does not understand the impact of the financial disasters created by those on the Conservative Benches. Some 7,500 families in Blackburn are set to see their mortgages rise by £1,300 this year. The Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rises in mortgage rates by 2026 and does not expect two-year fixed-rate mortgages to fall below 4.5% until 2027. That is a long time to hold your nerve.
The UK currently has the highest inflation in the G7. As with the energy crisis, the mortgage crisis is worse in the UK than in neighbouring advanced economies. And there is another crisis looming. Economists warn that there is a real risk of job losses and a sharp recession, as the latest economic forecasts project just 0.2% growth this year. We must not forget how we got here. The Conservative’s disastrous mini-Budget and 13 years of failure have left us dangerously exposed on inflation. During Prime Minister’s questions last Wednesday, the Prime Minister insisted that the best way to cut costs for homeowners would be to reduce inflation. On assuming office last year, his core commitment was to cut inflation to 5% by the end of this year. Of course, we all remember the Ready for Rishi campaign last July. He promised to reduce inflation. Conservatives did not believe him then and we do not believe him now. With inflation falling by only about 1.3% to 8.7% over the last six months, it looks increasingly unlikely that the Prime Minister will achieve that and fulfil his promise. The Government’s measures do not go far enough and leave too many people exposed.
In his statement to the House yesterday, the Chancellor stated that the charter has been signed by lenders covering 85% of the mortgage market—let us just forget the other 15%. Given that the charter does not cover the whole mortgage market, more than 1 million households could miss out on support. The Minister must guarantee that the measures he outlined will be available to everyone struggling to pay their mortgage, not just those who happen to have a mortgage with certain lenders and not just those who are up to date on their payments, because for months people have been falling behind, jumping from crisis to crisis under this Government. The Government are offering insufficient support to millions of renters. The Chancellor did not even mention them in his statement to the House yesterday. Has he made an assessment of the impact on local housing allowances? Has he made an assessment of the impact on the DWP? Or do the Government just accept that landlords will pass increased costs to tenants? An already broken rental market will suffer more without intervention.
Families are finding themselves on a cliff edge after months of increased bills and a cost of living crisis. It saddens me to see such a situation after more than a decade of austerity. Given what we have in our pockets and how we are able to pay our bills, it seems to us that, across the board, we are far worse off than we were back in 2010. No matter how many times the Prime Minister says, “Hold your nerve”, that will not pay the bills. How do you hold your nerve when you are struggling to feed your kids? How do you hold your nerve when you risk losing your home? I think the people of this country have held their nerve for long enough, and I think it is time for a general election.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. There are three more speakers before the winding-up speeches, which I expect to start at about five past four, and I expect two Divisions after that. I ask any Members who have taken part in the debate and are not present to make their way to the Chamber now.
Ruth Jones (Newport West) (Lab)
I thank the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), for bringing this important debate to the House.
In my constituency, 9,500 people will now be forced to pay £2,400 more a year, and that sits firmly at the Government’s door. Across Britain, people are being hit hard by the Tory mortgage bombshell, and the banks are now withdrawing mortgage deals. After 13 years of Conservative Government, does it not just say it all that millions of people face that Tory mortgage bombshell and the threat of losing their homes? Unlike this Conservative Government, however, Labour will not stand by as millions face a mortgage catastrophe made in Downing Street. I commend our five-point plan, which will ease the effect of the Tory mortgage bombshell, and urge Ministers to get behind it.
We will allow borrowers to switch to interest-only mortgage payments for a temporary period. We will allow borrowers to lengthen the term of their mortgage period. We will require lenders to reverse any support measures when the borrower requests that. We will require lenders to wait for a minimum of six months before initiating repossession proceedings. We will instruct the Financial Conduct Authority to issue, as a matter of urgency, consumer guidance stating that the credit score of borrowers making temporary switches to interest-only mortgage payments and lengthening the term of their mortgage period should not be affected. I am particularly pleased to note that Labour would introduce a renters charter ending “no-fault” evictions with four-month notice periods for landlords. That is how we will give working people the certainty and support that they desperately need.
After the 2010 election and the global financial crash of 2008, we heard many times that the financial situation was down to the Government of the day. Conservative Members crowed from the treetops. Today, they say that everything is due to the macroeconomic climate and global economic challenges. I say to them, “You cannot have it both ways”, because as things stand, they are in office but not in power. I was elected to this place in April 2019, and the last four years have not been the easiest for our country. We need calm and sober leadership, we need decency and respect in our politics, and we need a real plan to protect jobs, homes and livelihoods for people in Newport West and across the country.
Last week, my constituent Jolene came to my surgery to talk to me about her fears for the future: fears about how she will pay her bills, how she will pay her mortgage, and how she will save her home. Jolene is now a full-time carer for her children, who have additional needs, but her husband is a full-time HGV driver who is working as hard as he can. The cost of living has hit them hard, and in the last few months their mortgage payments have risen from £520 to £750 a month; Jolene believes that they will go up again. Like thousands of other people across the country, she is sliding further and further into arrears, and is desperately concerned about how she will be able to look after her children, both now and in the future, and hold on to her home. What is the Minister’s message to Jolene? This morning I met another constituent whose monthly mortgage payment has rocketed from £400 to £1,100. Who can possibly budget enough to cope with such shocking increases?
I am sorry to say to the Minister that nothing we have heard from the Government in recent days gives me any confidence that they have a plan to do right by our people. Some 9,500 people in Newport West will now be forced to find money to protect their homes in the middle of a cost of living crisis. That sits at the door of the Conservative party and its ill-fated autumn mini-Budget, which did nothing but spook the markets and let down those most in need of a Government who were on their side.
Only Labour has a plan to build a stronger economy that will see us less exposed to inflation over the long term, to give our people the support they need and to finally restore economic credibility after 13 years of failed Conservative Government. The people of Newport West deserve that—and so do people in all corners of our United Kingdom.
Matt Rodda (Reading East) (Lab)
I would like to speak in favour of the motion. Time is pressing, so I will touch briefly on the scale of the problem facing the UK.
It is fair to say that many families—indeed, up to 7.5 million—face a very difficult challenge at present because of the increase in interest rates and the effect on mortgages. As we have heard, it has been calculated that that increase means around £2,400 extra on household mortgages every year, which is £1,000 more than the increase in mortgages in the United States.
The situation affects both buyers and renters, because landlords put up rents as well, but the Government are proposing only a voluntary scheme, which obviously falls well short, and about 1 million families are likely to be missed by this inadequate measure. Earlier, the Shadow Chancellor set out a much more effective scheme, which I obviously commend to the House.
Given the lack of time, I will move on swiftly and speak about how the Government’s mortgage bombshell is affecting local residents in Reading and Woodley. This crisis is making what is already a difficult housing situation far worse for local people in our part of Berkshire. We have had high house prices and rents for some years, given the shortage of supply and many other related housing matters.
To give colleagues a taste of the situation locally, terraced houses in Reading town centre can sell for as much as £300,000, so these are quite expensive properties. There is also a real shortage of property and a large waiting list for local authority properties. For a family house, the price may be as much as £600,000 or £800,000, so we are already talking very large amounts of money. As I said, renters face additional problems. We have an issue with dangerous cladding not being removed in some cases, as well as issues with leaseholders and landlords. There are, therefore, serious problems in our area, and that is on top of the national problems facing families, which I mentioned earlier. Colleagues from across the House have also mentioned the 20% rate of food inflation and the UK inflation rate being the worst in the G7.
I would like to point out some of the problems facing individual constituents. Without giving away too many personal details, perhaps I could just give a flavour of the problems involved, and I hope the Chief Secretary will reflect on them. One constituent—a gentleman called Peter—is in a good job. He has a young family, with two children, and they live in a three-bedroom house. They face an increase of £800 a month in their mortgage, and they simply do not know how they will cope.
Another constituent, Donna, who lives in a flat in Reading town centre, faces a £400-a-month increase. Again, that is an absolutely incredible increase in what she has to pay for her home. Sadly, she is one of many residents locally who have been affected by the cladding scandal and by delays in removing various types of dangerous cladding. She is already under enormous pressure because of the emotional stresses and strains of having a flat with cladding problems. In addition, she now faces this enormous extra increase in her payments. She is self-employed and has a small business. Imagine how this feels to her. This truly is a dreadful crisis.
I realise that time is limited, and I hope my hon. Friend the Member for Stockton North (Alex Cunningham) can get in shortly, but I ask the Chief Secretary to report back to the Chancellor just how dire the situation is and how it is affecting people up and down the country—both my residents and those of colleagues from across the House. I also urge him to think about the five-point plan outlined by the shadow Chancellor, which has been well researched and well received across the industry.
Alex Cunningham (Stockton North) (Lab)
I well remember 1979, when mortgage interest rates soared under Thatcher’s Tory Government as the Bank of England base rate hit 17%. Those who were buying homes at the time knew all about it. My wife Evaline and I, both in relatively well-paid professional jobs, had moved home a couple of years before and, like many others, had maximised our mortgage to secure the house we wanted for our growing family. Little did we know that the cost of our mortgage would almost double in a couple of years.
My elder son John says he remembers Evaline and I regularly sitting at the table to go through our finances, often robbing Peter to pay Paul, while realising that Peter would still have to be paid with plenty of interest on top. Yes, the anxiety goes well beyond mortgage holders; it affects the whole family. Like many homeowners today, we contemplated selling up and moving to a smaller home, but the reality was that we would not only have lost our new home; we would not have been any better off.
I have huge sympathy for people today who are seeing their mortgage costs go through the roof, largely because the Tories crashed our economy by making some extremely daft decisions when our economy was still trying to cope with the double whammy of Russia’s illegal war against Ukraine and our exit from the European Union. We had it tough when our costs doubled, but today’s Tory mortgage bombshell is so much worse.
Moneyfacts data suggests that the typical rate of a two-year fixed-rate mortgage has increased to almost 6%, almost double the rate of a year ago, and the Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rise in mortgage rates by 2026. Other huge consequences emanate from the Government’s decisions. This week, economists warned that there is a real risk of job losses and potential recession. The latest forecast for economic growth suggests that the UK is struggling to get out of the slow lane, with growth of just 0.2% forecast for the year.
On Sunday, I watched the Prime Minister ducking and diving under quite simple questioning from the BBC’s Laura Kuenssberg, and it sickened me that he had the nerve and the gall to tell mortgage holders to hold their nerve. He lives just down the road from me, and I wonder if he would like to sit down with a few of my constituents whose fixed-rate deals are coming to an end within the next few weeks. One of them faces an increase from just short of £800 a month to £2,600 a month. I would like the Prime Minister to outline how that constituent should hold their nerve and retain their home.
That same constituent, like everyone else, is not only seeing their mortgage go through the roof. They must also cope with a near 20% increase in food prices, which according to the Office for National Statistics is the greatest hike in 45 years. That can be added to the extra burden of council tax increases across the country, as local authorities collect the Government’s social care levy because the Tories have so drastically underfunded social care in recent years.
What are the numbers on Teesside? In Stockton North, 8,900 families face an increase of £1,400 this year. The pain is the same across the Tees valley, with 11,900 families in Stockton South paying £1,800 more, 9,000 families in Darlington paying £1,400 more, 7,200 families in Middlesbrough paying £1,200 more, 9,300 families in Middlesbrough South and East Cleveland paying £1,700 more, and 8,000 families in Redcar paying £1,500 more.
The Tory mortgage crisis has other wide-ranging impacts. The Government’s failure to build sufficient homes over the last decade has led to limited supply and forced prices up, making it more difficult for people to get on the housing ladder. We also see developers putting some projects on hold and scaling others back. The Government’s housing figures, published today, show that affordable housing providers have stalled or stopped schemes, as they are experiencing what they say is a “perfect storm” of build cost inflation, rising labour costs, material unavailability, building remediation issues and a duty to support tenants through the cost of living crisis. Developers cutting the number of homes they are building will have an inevitable impact on jobs not only in the building sector but across the supply chains that support it.
We could go on forever about the excess profits being made by the banks, as they cash in on higher interest rates, but that appears to be fine by the Government. Now that times are good again for the banks, they need to do so much more. They should concentrate on helping their customers instead of their share price and their bottom line. I wish I could be confident that they will all act, but I am not. It is down to the Government to take action to compel them to do so.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I thank everyone who has contributed to this afternoon’s debate. I cannot help noticing that the vast majority of them are Opposition Members, so I thank my hon. Friends the Members for Halton (Derek Twigg), for Bootle (Peter Dowd), for Bradford West (Naz Shah), for Harrow West (Gareth Thomas), for Dulwich and West Norwood (Helen Hayes), for Birmingham, Hall Green (Tahir Ali), for Battersea (Marsha De Cordova), for Merthyr Tydfil and Rhymney (Gerald Jones), for Blackburn (Kate Hollern), for Newport West (Ruth Jones), for Reading East (Matt Rodda) and for Stockton North (Alex Cunningham).
We did hear a couple of speeches from Conservative Members. I thank the hon. Member for Stourbridge (Suzanne Webb) for her speech, but she forgot something. She forgot to tell us that 9,000 households in Stourbridge are going to be facing an increase of £2,400 a year in their mortgage payments. She was followed by the hon. Member for North West Norfolk (James Wild), and he forgot something too. He forgot to tell us that 8,000 households in his constituency are facing an increase in mortgage payments of £2,800 a year because of the Tory mortgage bombshell. Just in case it slips the Minister’s mind when he stands up to make his own speech, he should tell us that 10,500 households in Arundel and South Downs will be facing increases of £5,200 a year. Those figures show the level of pain among mortgage holders and that will only grow in the coming months.
We should remember that those who have bought their own homes have done nothing wrong. They have done what generations did before them: they have worked hard, saved for a deposit and taken pride in having a home of their own. The security that comes with that has for many turned to dread, as month after month they receive a letter from their lender telling them that their bills are going up by hundreds of pounds a month. In my constituency, 6,800 households face paying an extra £1,800 a year for their mortgage, and that comes on top of the extra that people are already paying for energy, food and everything else.
The Resolution Foundation says that the average figure across the country is £2,900 a year more, but we must remember that that is an average. Depending on where someone lives—we have heard this through the debate—the real figure could be higher. In Uxbridge, for example, it is £5,200 a year. In Selby, it is £2,700 a year. And it is not just mortgage holders who are affected, but renters too, because the people they rent from are seeing their mortgages rise as well. Last year, private sector rents rose by more than 10%, and the proportion of people’s income being used to pay rent is rising too.
The inflation and interest rate figures we saw last week showed an economy and a plan that has been blown off course, because this was not the plan that the Prime Minister and the Chancellor had—this is not how it was supposed to be. Their plan was to bury last year’s disastrous Tory mini-Budget under 10 feet of concrete. If it was to be remembered at all, it was supposed to be thought of as a bad dream, from which we had all mercifully woken up, but their preference was for it never to be spoken of again. Their hope was that they would steady the ship, possibly get some small amount of economic growth and then offer tax cuts either this autumn or next spring, after which a general election would be called.
After 13 years of policy failure, that was all they had left. They certainly could not run on their record, because nothing is working better now than it was when they inherited it in 2010. They certainly could not run on hope for the future, precisely because their record is so poor and no one would believe them. But even the plan they had has turned to dust, because reality has intervened—their own economic mismanagement has intervened. Their plan turned to dust because the Tory mini-Budget was not the end of something; it was the start of something. The instability that it created has carried on and on, and the price is still being paid. The Prime Minister set out a target to halve inflation, but last week core inflation went up, not down. Once again, it was higher than expected and, once again, it was the highest in the G7.
Richard Fuller (North East Bedfordshire) (Con)
I am grateful to the right hon. Gentleman for giving way. What is the Labour party’s view on forecasting and the Bank of England? It would be interesting to hear that, because it has been commented that forecasting by the Bank of England is not as accurate as forecasting in other countries, meaning that it is not as easy for outside investors to predict future interest rates. What is the Labour party’s view on that and, in particular, what is its view on requiring the Monetary Policy Committee in the UK to do a dot plot on future interest rates, as Federal Reserve governors do, to help with any confusion about forecasts?
Mr McFadden
We are not going to join the chorus of Government Members attacking the Bank of England. I thought the hon. Gentleman was rising to raise the issue of the 15,000 households in his constituency that are facing an increase in mortgage payments of more than £3,000 a year.
We all wanted to see a recovery, but we do not have a recovery. We have deepening financial difficulties for millions of households. The Government were desperate to say that the worst was over, but for anyone remortgaging over the next couple of years, the worst is not over—it is still to come. Most people on fixed rates have not refinanced yet, and the rolling financial thunder of mortgage renewals will continue month by month, as households receive those letters from their banks and building societies. That is the reality of the Tory mortgage bombshell.
The Chancellor and the Prime Minister were supposed to be the fix-it crew, but things have not been fixed at all. Borrowing costs are even higher now than in the wake of the disastrous Tory mini-Budget last year. Let me be clear with Treasury Ministers: if they are doing worse than the last Prime Minister and the last Chancellor, they are not fixing anything. That begs the question, what is the point of them? They have nothing left to offer. They are caught between telling the country not to risk it with Labour, with their little dossiers full of made-up pledges, and then adopting pale imitations of our policies, whether on the windfall tax, the NHS staffing plan or the voluntary mortgage proposals that they announced on Friday. Time after time, they have no ideas of their own; all they have left is a pale imitation of what we have already proposed.
We wanted a mandatory plan, and that is what is at the heart of our motion today. The truth is that the Tory party has shredded its own economic credentials—the Tory party of sound money, which saw debt top 100% of GDP last week; the Tory party of low taxes, which has lifted the tax burden to the highest level in living memory. There is literally no point to this Government. They are running out of options and they are running out of road.
We are not speculating about what might happen in the future. We are talking about a real crisis, with a real cost of living squeeze on real people, right now, and it has all happened on their watch. After 13 years, they have run out of excuses and run out of people to blame. From Brussels to the blob and now the Bank of England, there are no scapegoats left. Their sense of entitlement to rule is matched only by their total unwillingness to accept any responsibility for anything that happens while they do rule. The Prime Minister says he is “on it”. What a reassurance to working people! I do not know what he is on—usually, a helicopter—but I know it is not working.
The Government cannot fix the problem, because they are the problem. The answer for the country is not another iteration of a Tory project that has already failed over and over again. It has failed on the cost of living crisis. It has failed on public services. And it is failing on mortgages, too. It is time for change, but the Tories cannot offer it. It is time for recovery, but they have failed to deliver it. It is time for an election and a new start, and the sooner they come, the better.
The Economic Secretary to the Treasury (Andrew Griffith)
I am afraid that, with the exception of my colleagues, that was an unedifying parade of clone speeches that would wear out an average plagiarism detector. When I look at Opposition Members and hear their contributions today, I find it personally dispiriting. As the Minister responsible for financial literacy, I clearly have a great deal more to do.
As my hon. Friends have rightly observed, we are not alone in our fight against inflation. Countries across western Europe and, indeed, the rest of the world are seeing the same trends, driven largely by Putin’s illegal war in Ukraine and the aftermath of the covid pandemic.
Several hon. Members rose—
Andrew Griffith
I will give way in a moment. Let me say this in all seriousness: the only bombshells that we should be talking about are those that are falling on the Ukrainian people, and it cheapens the Opposition that we hear again and again the slogan of the week, and what we do not hear about is the broader geopolitical and macro environment in which this country finds itself. The British people have a much greater awareness of these matters than those on the Opposition Benches.
Alex Cunningham
The Minister mentions global factors, but last week the Bank of England noted that since its last decision, the swap rate—the key rate that influences mortgage interest rates—had increased almost twice as much in the UK than in the US and more than three times as much in the UK as in the euro area. Does the Minister agree with the Bank of England?
Andrew Griffith
I am grateful that we have belatedly found some international comparisons. The hon. Gentleman will therefore understand that we are seeing exactly the same rises—sometimes a little more, sometimes a little less—across most of the developed western economies. That is why this Conservative Government are taking action. We have helped people through these difficult times by giving the average household—[Interruption.] Do Members know how much? We are giving the average household £3,300 at a cost of £94 billion to the Exchequer. That is one of the largest support packages anywhere else in Europe. I will happily give way if any Labour Member wishes to challenge that.
When it comes to our generosity, this Government have increased the national living wage and pensions by record amounts, because this is a Government who will always put the vulnerable first. In addition to the explanations given by the Chancellor in this place yesterday, the Chief Secretary to the Treasury, in his fantastic remarks earlier today, set out in some detail our support for those struggling with their mortgage payments in these difficult times. The Chancellor’s new mortgage charter provides peace of mind about extending an existing mortgage or moving on to interest-only payments for six months, giving those who are worried about mortgage repayments some valuable respite. Vitally, it also gives genuine security to those who are at risk of losing their homes because they fall behind on mortgage payments.
Mike Amesbury (Weaver Vale) (Lab)
But the charter is not mandatory, is it? How will that help the 10,100 constituents of Weaver Vale faced with that mortgage Tory tax bombshell? How will it help them if it is not mandatory?
Andrew Griffith
I will happily respond to the hon. Member. Not only did Opposition Members oppose the very powers in the Financial Services and Markets Bill that we passed last night that would give the Treasury the ability to direct the regulators—an ability they now somehow seem to want to reinvent—but the exercise of those powers would inevitably take time. What we are hearing from the Opposition is not just a package that in many respects is deficient compared with what the Chancellor and this Government have brought forward, but a path to implementing that package that—rather than taking days, hours and weeks as our mortgage charter will—would take a much more significant period of time. They offer more delay, less help for people and fewer paths to deliver.
Catherine West
The topic of the debate is mortgage and rental costs, but the Minister has not covered the rental side. The last time he came to the Chamber he was asked how many renters are going to be in distress due to this situation. He was unable to answer, because he had not done the assessment. Will he promise to go back to the office and do an assessment on how many renters are affected?
Andrew Griffith
All households are impacted by the higher cost of money that we face. That is why we are focused on supporting all households, supporting those who are the most vulnerable and bringing forward at pace our measures to support the mortgage market. That is also why, since taking power, this Government have restored the overall health of our financial system. It is important that the House understands that mortgage arrears and defaults are today at historically low levels. Less than 1% of residential mortgages are in arrears, a level below that which we saw during the pandemic and significantly lower than under the last Labour Government.
Stewart Hosie
In the last hour it has been reported that two-year UK gilts are at 5.24%, a 15-year high, above the post-mini Budget peak, and markets now see a 70% chance of those rates going over 6% by the end of the year. If it is all going so well, why do the markets not believe the Tories?
Andrew Griffith
I always make a point of not commenting on the markets, in whichever direction they move. The responsibility of Government is to act and the responsibility of this Government is to deliver. We will control what we can control and the markets will do what they do.
The mortgage charter lays out that there will be a minimum 12-month period—I believe that is double the Opposition proposal, but I am happy to take an intervention on that—from any first missed payments before any repossession action is taken. It is important that our constituents understand that these measures offer comfort to those who are understandably anxious about the impact of higher rates on their mortgages and provide support for those who would get into financial difficulties. More broadly, the mortgage market itself remains robust and, because of the actions the Government have taken over the past 13 years, the average homeowner remortgaging in the past year had close to 50% loan to value, indicating that most have considerable equity in their homes.
Help for mortgage holders, but help for savers too: this Government are committed to ensuring that people are supported to save and can access a wide range of competitive savings products. The current range of options available to savers includes some of the highest rates that we have seen in recent years on both instant access accounts and the more relevant fixed-term products, which represent a better apples-to-apples comparison with fixed-term mortgage rates. The top instant access savings rates currently on the market offer around 4.2% and the top one-year fixed rate is much closer to the mortgage rate at about 5.8% annual equivalent rate.
Tackling inflation remains the Prime Minister’s and this Government’s No. 1 priority, and it will remain so until it is tamed. Allowing inflation to go on at the current rate or to grow higher would be the biggest threat to our collective economic security. While we continue on our fight to fight inflation, we will also do what British public expect; we will look at how we can grow the economy over the long term, improve productivity and ensure that no communities are left behind. We continue to take forward supply-side policies to increase the productive capacity of this economy and encourage workers back into work, including rolling out the largest ever expansion of free childcare. All that will set us up for greater productivity.
Let us contrast that with the Lib Dem plan to pile on to inflationary pressures an unfunded £3 billion a year. That is eclipsed only by Labour’s £28 billion a year—Interruption.] Labour Members do not want to hear it; they are talking among themselves. The IFS said that Labour’s £28 billion plan would cause interest rates and inflation to rise. Paul Johnson said that
“additional borrowing both pumps more money into the economy, potentially increasing inflation, and also drives up interest rates.”
That really would be a Labour mortgage bombshell.
In this barmy weather, those thinking of taking a summer holiday should remember that Labour’s economic policy has more flip-flops than the average surf shop: national insurance, corporation tax, the pensions cap, North sea gas, and, yesterday, shelving reform of high street business rates. The fact is that no Labour Government have ever left office with unemployment lower than when they came to power. As my hon. Friend the Member for Stourbridge (Suzanne Webb) reminded us, the note left by Labour’s Chief Secretary to the Treasury in 2010 said, correctly: “I’m afraid to tell you there is no money left.”
This Government are taking action on the economy. We are taking the tough decisions to bear down on inflation, we are supporting the vulnerable, we are helping the economy to grow, and, as the amendment states, we are helping mortgage holders with our new mortgage charter.
Mr Deputy Speaker (Mr Nigel Evans)
To inform the House, I shall put the main Question first. Should it be negatived, I will then put the Question on the amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Caroline Nokes (Romsey and Southampton North) (Con)
On a point of order, Mr Deputy Speaker. I rise to seek your advice. Following the ten-minute rule Bill of the Member for North West Leicestershire (Andrew Bridgen) this afternoon, a number of right hon. and hon. Members of this House have been accused of being in support of grooming children. I have looked at the Metropolitan police’s website, which specifically says:
“Grooming is when a person builds a relationship with a child, young person or an adult who’s at risk so they can abuse them and manipulate them into doing things. The abuse is usually sexual”.
That accusation has been retweeted by the Member for North West Leicestershire. I seek the House’s and indeed your advice, Mr Deputy Speaker, as to what action Members can take to ensure that there is some sort of sanction on that—I believe—unparliamentary behaviour.
Sir Chris Bryant (Rhondda) (Lab)
Further to that point of order, Mr Deputy Speaker. I do not want to comment on whether there is an appropriate sanction, because I am the Chair of the Committee on Standards, but the tweet that the right hon. Member for Romsey and Southampton North (Caroline Nokes) referred to says that several Conservative Members
“voted against the motion and in support of the grooming and mutilation of children”.
I suggest that that is incitement of violence against those Conservative Members and Opposition Members who voted against the motion. It is probably also actionable, and if any Conservative Members want to pursue that course of action, I will stand with them.
I wonder how we ensure that we protect the privileges of this House, namely freedom of speech. I would protect the freedom of speech for the Member for North West Leicestershire (Andrew Bridgen) to be able to say what he did in debate, though I thought it was absolutely abhorrent and despicable. It also chills my bones, as I suspect it does yours, Mr Deputy Speaker, because it feels as if a new section 28 is being introduced by the back door for trans people, just as we used to have for lesbian and gay people. How do we ensure that freedom of speech is guaranteed for the whole House and that we are not abused for doing our job properly?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Member for Romsey and Southampton North (Caroline Nokes) for her point of order and the forward notice of it and Sir Chris Bryant for the further point of order. While we do have privilege to speak as we wish in this House and rules to ensure that that freedom is used responsibly, what a Member says or retweets outside the House is not a matter for the Chair. Nevertheless, Members should remember that moderation is desirable outside the Chamber as well as within it, especially when criticising Members for their conduct in parliamentary proceedings. I am sure that this is not the last we will hear of this particular matter.
Repurposing Russian Assets to Rebuild Ukraine
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr David Lammy (Tottenham) (Lab)
I beg to move,
That this House condemns Russia’s illegal invasion of Ukraine; stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state; recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions; commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.
Some of the most horrifying images from the start of the Ukraine war came out of Bucha, a city just outside Kyiv. Bodies of innocent Ukrainians were strewn across the street, some with their hands tied behind their backs, and dozens were buried in mass graves beside burned-out tanks representing Russian aggression. Today, much of the damage wreaked on Bucha has been repaired. Walking down its streets, it is almost impossible to imagine the atrocities committed just one year ago.
Rebuilding has become a motif of Ukrainian resistance. By April, Ukraine had cleared debris from 2,100 km of road, rebuilt 41 of the 330 destroyed bridges and renewed 900 railway points. But as Putin’s barbaric war continues, there remains so much more to do.
Putin’s illegal invasion of Ukraine began not last year but in 2014. However, for the past 16 months since the start of the full-scale invasion, Ukrainians have been continually bombarded from the land, the sea and the air by a dictator determined to destroy everything that their country represents: its freedom, its vibrancy—which I have seen on two occasions—and its spirit. Yet in the face of Putin’s barbarism, Ukrainians have defended their country with courage and a fierce determination to defend the values that they cherish. Ukrainians have shown themselves to be free and proud people who refuse to be controlled or subdued.
Since the invasion began we have seen that Putin will seek to destroy that which he cannot control. We should be under no illusion about the sheer scale of the destruction that Putin’s war has brought to Ukraine, nor about the high price paid by ordinary Ukrainians. The statistics speak for themselves. The United Nations estimates that almost 10,000 civilians have been killed. Millions more have been displaced from their homes. Over 150,000 buildings have been destroyed or damaged, including homes, schools, hospitals and many businesses. Tens of thousands of kilometres of road have been rendered useless.
Landmines and munitions are strewn across the country. Vast swathes of farmland have been ruined, forests have been burned down and national parks have been destroyed. Millions of Ukrainians have been forced into poverty, and parts of the country are facing a humanitarian crisis. In total, the World Bank estimates that up to $600 billion will be needed to fund Ukraine’s recovery and construction. That is around three times the size of Ukraine’s GDP, and the figure is rising by the day.
Beyond the physical damage, we must remember the profound psychological impact of the invasion on the Ukrainian people. A people who were full of optimism for the future are now having to come to terms with the loss of loved ones and the destruction of their homes and livelihoods. Where once there was hope there is now uncertainty and fear, with the war making it impossible to plan for the future. Although Putin has succeeded in bringing about destruction, Ukrainians have resisted through a sense of strength, defiance, innovation and ingenuity. What they have achieved, frankly, is astounding.
In the early part of the invasion, Putin tried everything he could to destroy Ukraine’s energy sector. In raid after raid, energy resources were the targets of bombs. At one point, almost half the power generation was destroyed. Yet only months later, Ukraine’s electricity grid is once again fully operational, and even exporting power to Europe. Streets that were reduced the craters have been rebuilt. Bridges that only months ago were destroyed are standing once more. Homes that were reduced to rubble are now rising again. Across Ukraine, people are doing whatever they can to get on with their lives and rebuild their broken livelihoods.
However, with all the ingenuity and strength in the world, Ukraine cannot take on the job of national reconstruction on its own, nor should it be expected to do so. Our greatest strength in support of Ukraine against Russia is our unity, as I said yesterday. Labour will continue to stand united with the Government, our allies and our partners until Ukraine wins. Likewise, we will stand with Ukraine as it begins the long and difficult process of rebuilding its proud country and forging the bright and ambitious future that Ukrainians deserve.
The Ukrainian people deserve justice for the suffering they have endured and they deserve to see Russia held accountable for its actions. Ukrainians have already paid the ultimate price for Putin’s imperialism and they deserve to rebuild their country without having to bear the burden of the cost. That is why the Labour party believes Russia must pay for Ukraine’s recovery. It is not just a matter of justice; it is also a matter of deterrence. If Russia is not held accountable for its actions it will only embolden it against others, and other aggressors will be emboldened. The message will be sent that the international community is not serious about preventing future wars. That is why it is vital we show Russia that there are consequences for aggression. We must make it clear that the world will not tolerate its actions.
Alexander Stafford (Rother Valley) (Con)
The right hon. Gentleman is making a very powerful point. I sympathise with what he is saying, but I am also if not concerned then questioning about some of his calls. The way I hear it is that he is calling for reparations. After the first world war, huge reparations were put on Germany and we know where that ended up. The German populace felt that they could not cope with the reparations, and that lead to the second world war. The right hon. Gentleman is calling for Russia to pay. Can we make sure that that does not affect the people of Russia, so they do not create another conflict?
Mr Lammy
This is a debate about repurposing. The hon. Gentleman might remember that after the first Gulf war, oil revenues were used to rebuild much of Kuwait. That is the central point that this debate is about. There is a consensus globally on the issue, with the Canadians, the United Nations and US Senators making progress in this regard. The debate is about repurposing. We have to be very careful to get the balance right. It is clear that we cannot leave Ukraine to do this on its own, so the question is: do we have the will to make this happen?
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am grateful to the Opposition for selecting this subject for debate. I cannot be here to make a full contribution, but I just want to ask the right hon. Gentleman a simple question. During a recent debate in this place, we pretty much came to a consensus that the first stage is to look to repurpose the frozen assets: $300 billion-plus of national assets and maybe $50 billion of individual assets. They are sitting in our hands. They are not the same as reparations; they are funds that are in very clear existence. A lot of international lawyers think it can be done. I just wondered what the right hon. Gentleman thought.
Mr Lammy
The right hon. Gentleman is right. He is right about the football team we both support—it is not the only thing he is right about, but he is right about that—and he is right that more than $300 billion of Russian state assets have been frozen by our global partners, with £25 billion here in the UK. The central point is that those assets are frozen, so the question is, what are we going to do now?
Dame Margaret Hodge (Barking) (Lab)
My right hon. Friend is making a very powerful contribution. I think there is large consensus in the House on this issue. I just want to draw attention to the facts. We actually do not know how much money has been frozen, either Russian state money or money relating to sanctioned individuals. There is a figure I have seen from the Bank of Russia which suggests £26 billion and figures from the Government that suggest £18 billion. Does he not agree that it is imperative the Government should openly tell us how much money has been frozen, who it comes from and where it sits, so that we can follow the money and ensure that justice is done for the Ukrainians in their country?
Mr Lammy
My right hon. Friend has been so assiduous on these issues over many, many years. She is absolutely right that we cannot have the necessary quality of debate without transparency. That is what we need. I do not think that that ought to be a matter of dispute between us and the Government; I should have thought that it was something on which we could agree. I hope the Minister will be able to tell us whether those figures can, in a transparent fashion, be put in the Library and made available to the Foreign Affairs Committee, so that we can all work on a common basis.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
My right hon. Friend the Member for Barking (Dame Margaret Hodge) has provoked me into intervening. Would we not be better served in the House if the Office of Financial Sanctions Implementation not only disclosed the full measure of the assets that we have frozen, but came to the House once a month to tell us what sanction waivers it had written that have allowed oligarchs with fortunes in this country to live high on the hog in their well-tended mansions, paid for with money that has been stolen from the Russian people? The Minister himself came close to agreeing with us in the Foreign Affairs Committee that our sanctions regime is in danger of being undermined by the Treasury writing sanctions waivers left, right and centre.
Mr Lammy
I agree with my right hon. Friend, who has raised these issues time and again. The concern is, of course, that there is not the appropriate ministerial oversight, that this place is being kept in the dark about fundamental, key issues, and that in the end the money of taxpayers in all our constituencies will fund these waivers. That is why the House should have both transparency and the opportunity to challenge and question those who make these decisions on our behalf. I hope that that is what Ministers are doing, but it does appear that this is happening without ministerial oversight.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I agree entirely with the thrust of the right hon. Gentleman’s speech. Does he agree that the possible lacuna in the tracing of Russian assets is in Companies House and shell companies? Does he agree that we need to amend the regulations surrounding Companies House to provide proper verification of the people in charge of those companies, and allow Companies House to liaise more closely with the fraud authorities and report suspected fraud?
Mr Lammy
The hon. Gentleman is absolutely right. That has been a standing issue that the official Opposition have taken up. We do think further reform is necessary at Companies House, and we were slightly concerned that that was not supported by the Government in the Economic Crime and Corporate Transparency Bill.
Dame Margaret Hodge
I too have been provoked, by the intervention from the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). He was right to say that the reform of Companies House and greater transparency about beneficial ownership are vital, but that will give us information only about companies, as opposed to trusts. Last week Lord Agnew of Oulton, a Conservative peer, successfully moved an amendment that would have provided some visibility in who controls trusts. We know that Abramovich, for instance, has transferred a large amount of his money into trusts controlled by his children, including a daughter aged about nine. If we do not have transparency, we cannot follow the money, and we cannot ensure that the assets of sanctioned individuals are really being held so that they can be repurposed to help the people of Ukraine.
Mr Lammy
I am, again, grateful to my right hon. Friend—first for raising the issue of transparency, and secondly for raising the issue of Lord Agnew’s amendment and endorsing the point that has already been made. I hope the Minister will tell us whether the Government might give that amendment some support, so that we can benefit from the satisfaction we should gain from this debate. I recognise that it is an Opposition day debate, and we are using our time as an Opposition to bring these issues to the forefront because it has been many months since the Government said that they wanted to act, but the debate is being held in a spirit of the national interest, and I hope everyone can recognise that.
The question, then, is “Who should pay for Ukraine’s recovery?” The Labour party’s view is that the answer is Russia, and one way of ensuring that this happens is repurposing Russian state assets that have been frozen in the United Kingdom. The Government have said at least since October 2022 that they are supportive of seizing Russian state assets to fund Ukraine’s reconstruction, but in the eight months since, no specific proposals have been forthcoming. From the very beginning of Putin’s invasion, Labour has worked with the Government to ensure that our sanctions framework is as effective as it can be, notwithstanding the issues that have been raised from both Back Benches today.
Sir Chris Bryant (Rhondda) (Lab)
If I am honest, Ministers have been a bit flip-floppy about this issue. The Foreign Secretary was remarkably snooty about it in the House only yesterday, when he said that I am apparently an idiot because I do not understand international law. Some of us have been arguing cross-party in favour of trying to seize Russian state assets and repurpose them for the rebuilding of Ukraine. I thought that that was the accepted, long-term destination of the Government, even if they had not quite managed to get there. I think that the objection the Foreign Secretary has is around the State Immunity Act 1978. We would need to amend it to be able to proceed, but that is perfectly available to us.
Mr Lammy
That is, of course, central to the work my hon. Friend has been doing in his Seizure of Russian State Assets and Support for Ukraine Bill. I think the House could come together to amend the State Immunity Act. I do not want to comment on the Foreign Secretary, except to say that, in my experience, if he has had an overnight flight, he can be a little prickly, but we will not hold it against him.
Since the beginning of the invasion, more than £25 billion of Russian state assets have been frozen in the United Kingdom, and more than $350 billion of Russian state assets have been frozen by our global allies, and those vital assets could be used to help fund Ukraine’s recovery. Since February last year, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) and I have been pushing the Government on this issue relentlessly, and I pay tribute to the great work of my hon. Friend the Member for Rhondda (Sir Chris Bryant), who tabled his ten-minute rule Bill specifically to speed up the Government’s efforts in this area.
Each time, the Government’s response to Members of this House has been that the Government support repurposing Russian state assets but that it is complex. We fully accept that, but we do not accept—and I do not think, given its mood, that the House accepts—that this issue is insurmountably complex or that we should not try to meet this challenge.
We accept the concern that, on the whole, it is not good for any Government to seize another state’s assets and that the right to property is fundamental to the rule of law, but there are exceptions to that rule. For example, the law reserves the right to fine people and deprive them of ill-gotten gains. In the same vein, we recognise concerns that repurposing Russia’s central bank reserves could violate Russia’s sovereign immunity but, again, there are exceptions to that rule. We believe that Russia’s continued refusal to comply with international human rights law or to follow the orders of the International Court of Justice are good grounds for such an exception.
Simply put, we believe that Putin’s full-scale invasion of Ukraine represents a wholly exceptional act, from which exceptional countermeasures can flow, and we are not alone in that belief. As the Minister will know, the Canadians have had legislation in place since December last year to repurpose frozen Russian assets, and it is a similar common law jurisdiction to ours. The European Union is working at pace to ensure that Russian central bank reserves can be repurposed by the summer. Last month, United States politicians laid a Bill that would allow for state assets to be repurposed. Finally, we must remember that the UN General Assembly has voted on this very issue, adopting a resolution that calls for Russia to pay war reparations to Ukraine and for states to transfer Russian state assets into a central bank account to be repurposed. This begs the question: why, then, are the Government lagging behind our international allies in this area? We believe we must rise to this challenge, and we must rise to it now.
Sir Iain Duncan Smith
I apologise for interrupting the right hon. Gentleman again.
Sovereign immunity applies in international law to foreign judicial processes. It is clear in international law that sovereign immunity does not apply to administrative or legislative processes, such as Bills. It is quite possible for us to pursue this by tabling legislation, as America has, to secure that process in the courts. Sovereign immunity applies only to judicial processes, so it would be wholly feasible in legislative terms.
Mr Lammy
The right hon. Gentleman is absolutely right. Very few countries now consider sovereign immunity to be an absolute immunity, and there have been many exceptions. Meeting damages, particularly those awarded by international courts and tribunals, is one such example. The State Immunity Act also expressly restricts sovereign immunity.
I agree with the right hon. Gentleman that Russia’s continued refusal to abide by international law provides us with exceptions, and we should now table legislation to make it clear that there are exceptions.
Richard Graham (Gloucester) (Con)
The right hon. Gentleman is making a powerful point about the importance of rebuilding Ukraine. All of us who were at the Ukraine recovery conference will have noted the key point that about $400 billion-worth of rebuilding is needed, coming from both the public sector and the private sector with huge support from the World Bank, and so on. Does he agree that part of this is not just getting Russian assets to play their part, very important though that is, but thinking about some of the softer aspects of rebuilding, including the work of organisations such as the Westminster Foundation for Democracy, to make sure that Ukraine emerges from this horrible invasion into a much better world, in all senses—a stronger democracy, less corruption and more for us all to be incredibly happy about?
Mr Lammy
The hon. Gentleman is right. President Zelensky committed to that at last week’s Ukraine recovery conference, and we need to support him. Democracy is forged in people-to-people contact. That was the case before the war—I remember meeting civil society in Ukraine and, frankly, they were very clear that there was work to be done—and it will most definitely be the case after the war.
Sir Chris Bryant
That prompts another thought in my little head. Quite a lot of people on social media have criticised the idea of doing any reconstruction of Ukraine now, saying that we should wait until the end of the war. I hope the shadow Foreign Secretary will agree that that is a preposterous suggestion. People need homes, schools, playgrounds and hospitals now and, actually, quite a lot of rebuilding is already ongoing. We need to give that a rocket booster to make sure it can happen at pace.
Mr Lammy
My hon. Friend is right, and it is why I wanted to mention in my speech that work is happening in Ukraine now, which is extraordinary. We should be behind that work, in defiance of Putin’s imperialism.
We will continue to work with the Government to ensure that Ukraine gets the support it needs to win this war. From the start of this invasion, we have been united on providing Ukraine with the military, economic, diplomatic and humanitarian support it needs. We commend the Government for the commitments they made to support Ukraine at the Ukraine recovery conference last week. We welcome the International Monetary Fund’s announcement of $15 billion to support Ukraine over four years, and we welcome the announcement of £250 million of extra funding from British International Investment. However, just as we pressed the Government to move further and faster on sanctions, in a constructive spirit, at the start of the full-scale invasion, today we are urging the Government to come forward with a legislative plan to repurpose Russian state assets for Ukraine’s recovery.
Sir Geoffrey Clifton-Brown
The right hon. Gentleman is a lawyer. Is he aware that one of the biggest arbitration cases ever is before the United Kingdom commercial court? It concerns the seizure by Russia, a month before it went to war in Ukraine, of several hundred civil commercial aircraft. That case is going to cover many billions of pounds, both here and in the US. When we consider what measures we take against Russia, should we not consider that act of expropriation by the Russian authorities?
Mr Lammy
The hon. Gentleman puts before the House an important case, which we should look at very closely, as it will be of concern to all of us in relation to how we move forward in these areas. It has been some time since I practised law, although I was pleased to be made an honorary doctor of laws by the University of Glasgow last week.
The UK has a part to play in supporting Ukraine not only today, but for tomorrow and in the decades to come. We believe that we can go further. The frozen Russian state assets held in the UK could have a transformative impact on the future of Ukraine. Let us imagine the good that £26 billion could do if we reappropriated it with the sole purpose of securing a positive future for the people of Ukraine. Russia forfeited its rights to these assets when Putin embarked on his barbaric and illegal invasion, and the least we can do is join our international allies in repurposing these assets for the benefit of Ukrainians. The Government have had more than a year to come up with this legislation, but there has been no plan, no action and no progress. We call on them to treat this matter with the urgency we believe it deserves and to come up with the required legislation within the next 90 days. That gets us to a place where in the autumn we could come together as a House to make this happen—if need be, this could be in the next Session of Parliament. Labour will support the Government in any way we can to make sure that this succeeds, and of course we will hold them to account if they should fail.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
Let me start by thanking the right hon. Member for Tottenham (Mr Lammy) for the tone and substance of the debate, and indeed other colleagues who have participated. We are united in our outright condemnation of Putin’s brutal invasion of Ukraine, which is a fundamental violation of Ukraine’s territorial sovereignty. He drew a moving counterpoint between the terror and destruction of Bucha, and the remarkable appetite and spirit of rebuilding and reconstruction that is a motif of the Ukrainian people. That spirit of courage and determination was on magnificent display last week at our very successful Ukraine recovery conference.
The right hon. Gentleman also mentioned the capacity of Ukrainians’ innovation and their ability to make running repairs on all of their national infrastructure, including, most importantly, their electrical grid. That spirit of innovation and ingenuity will surely see them have a bright future, as and when Ukraine begins the rebuilding effort. That should not wait for the end of any conflict, but should be concurrent with the conflict. That was one of the main messages last week.
The right hon. Gentleman referred to the fact that unity is our greatest strength. The Government agree with that, and thank him and his colleagues very much for the consistent support they have outlined for our common efforts. We are right behind the efforts of the Ukrainians to rebuild their country now. The World Bank has estimated that rebuilding will cost £400 billion. Last week, there was a galvanising effort, where more than $60 billion towards Ukraine’s effort was outlined. It was a remarkable conference in terms of its convening power and the contributions from President Zelensky. As the Prime Minister said:
“Russia must pay for the destruction that they’ve inflicted. So we’re working with allies to explore lawful routes to use Russian assets.”
Those assets will pay for the damage Russia’s invasion has so recklessly caused.
That is also why, on Monday 19 June, we published new legislation to allow us to keep sanctions in place until Russia pays up. We are keeping up the pressure through our sanctions regime, with an unprecedented package targeting over 1,600 individuals, 130 of whom have more than £18 billion frozen. We believe in transparency and in keeping colleagues informed, so I will place an update in the House of Commons Library, showing the total value of assets frozen, to ensure that colleagues have the latest figure.
Dame Margaret Hodge
I do not think anybody can quarrel with the words the Minister has expressed, but I would like to urge him into action. Today, Lord Alton of Liverpool is moving an amendment in the House of Lords that would ensure that when somebody is sanctioned, there is a duty on them to disclose all their assets. If they fail to fulfil that duty, the agency could pursue them, as a criminal offence would have been committed, and seize the assets. That is a tiny window that we are opening, which would start to create the reality of seizing rather than freezing assets. Will the Government support that amendment? There will probably be a vote on it within the hour.
Leo Docherty
I am grateful to the right hon. Lady for drawing my attention to that amendment. I cannot make a pronouncement on the Government position on it, as I have not read the amendment, but we will observe it and take note.
Liam Byrne
Will the Minister clarify the press release issued by the Foreign, Commonwealth and Development Office on 19 May? It said that
“consistent with our laws, Russia’s sovereign assets in our jurisdictions will remain immobilised until Russia agrees to pay for the damage it has caused to Ukraine.”
Will the Minister confirm whether it is now, in effect, the Government’s strategy to use frozen Russian assets to rebuild Ukraine?
Leo Docherty
That legislation, which is a statutory instrument made using the affirmative procedure, gives us options in the future to extend sanctions, up until the point where Russia has paid. It gives us tremendous leverage into the future and has great utility.
We have maximised the impact of our sanctions by co-ordinating with our key international partners, at huge economic cost to Putin’s war machine. Russia’s economy posted a deficit of nearly $50 billion in 2022, the second highest in the post-Soviet era, and with our partners we are choking off Putin’s access to the key technologies he needs on the battlefield.
As I have mentioned, we are the first member of the sanctions coalition to lay legislation, which we did on 19 June, explicitly enabling us to keep sanctions in place until Russia pays for the damage it has caused. That builds on the commitment made by the Prime Minister and G7 leaders that sovereign assets will remain immobilised until Russia pays up. It also goes further, giving us maximum flexibility to act as the situation requires.
Our commitment does not stop there. As criticism of the war grows within Russia, we are introducing a new route for those under sanction to request that their frozen funds be used for Ukrainian reconstruction. Let me clear: there is no negotiation, no quid pro quo and no access for those individuals to their assets while they remain under sanction. However, if they wish to do the right thing and use those funds to help right the wrongs caused by Putin’s invasion, there will be an approved route for them to do so.
Sir Chris Bryant
One sanctioned individuals who said, before he was sanctioned, that his assets could be given to the reconstruction of Ukraine was Roman Abramovich. The sale of Chelsea football club happened last May and I understand there is £2.3 billion sitting in a bank account. I am mystified as to why that money has not yet been handed over to the foundation. I have exchanged texts with the person who set it up. He said he is ready and he does not understand why he is not getting the money—he has not even been told why he is not getting the money.
Leo Docherty
That is a non-governmental body. There are ongoing discussions with regard to the focus and the use of those funds—whether it be in Ukraine or outside Ukraine to benefit Ukrainians—which has drawn out the process, but we are seeking to expedite the matter at pace.
Sir Chris Bryant
I am grateful to the Minister for giving way again, but discussions between whom? If Government Ministers are party to those discussions, what is the concern that people still have?
Leo Docherty
It is not a Government discussion; it is a discussion within the new organisation that will disburse and utilise those funds. We will keep colleagues updated as and when that situation is resolved.
Sir Chris Bryant
As I understand it, the Minister is saying that the members of the foundation itself are rowing with each other about to how to proceed, but surely that would not prevent the money being handed over by the Government.
Leo Docherty
The hon. Member should not put words in my mouth. Details remain outstanding. A discussion is under way within the institution with regard to the focus and the utility of these funds. As and when that is clarified, I am sure that we will be able to keep colleagues updated. I remain grateful to him for his interest.
Dame Margaret Hodge
I am extremely grateful to the Minister for giving way again. Before that exchange, he was speaking about the ability of sanctioned individuals to voluntarily give some of their money to the Ukrainians. Can he reassure me, first, that this will not become a mechanism whereby sanctioned individuals can get themselves out of sanctions and continue to launder their money into the UK, and, secondly, that this is not a mechanism that will, in effect, buy them immunity from prosecution should they have committed an offence here in the UK?
Leo Docherty
I am very happy to give the right hon. Lady an absolute assurance that it is not a mechanism for circumvention or for granting immunity. It is to ensure that those funds, if volunteered, can benefit Ukrainians.
We are tightening the net on those who are hiding assets in the UK. Under powers to be introduced by the Treasury, individuals and entities designated under our sanctions regime will be legally required to disclose assets they hold in this country. Failure to do so could result in financial penalties or the confiscation of assets.
We will legislate to require those holding assets in the UK on behalf of the Central Bank of the Russian Federation, the Russian Ministry of Finance or the Russian national wealth fund to disclose them to the Treasury. Our action will increase transparency on where those assets are held and limit opportunities for sanctions evasion. Taken together, these new measures mark a further strengthening in the UK sanctions approach against Russia, as Putin and his cronies continue their illegal war and as Ukraine embarks on its counter-offensive. This marks important progress, but I assure Members that our efforts will not stop there.
Many hon. Members will be aware of the active debate with our international partners on the use of sanctioned assets. As the Foreign Secretary and other Ministers have made clear to this House repeatedly, no country has yet found a legally tested solution to turn this commitment into reality at scale, despite various pieces of legislation having been laid or passed by our international partners.
We are at the forefront of a united effort, with our international partners, to see frozen assets repurposed for Ukrainian reconstruction. Nothing is off the table, and a cross-Government taskforce is considering all proposals carefully, including those that our partners may bring forward.
Liam Byrne
I thank the Minister for giving way; he is being characteristically generous. We might as well cut to the nub of the debate. Is it his ambition to bring forward to this House a Bill that fulfils the ambition of the Opposition’s motion?
Leo Docherty
It is our ambition to find a legally workable route to repurpose Russian assets. As yet, no country has found one. We are working with partners to do so. As the House will appreciate, we must assure ourselves of the safety, robustness and legality of any proposal in this regard. If there is no legality, there can be no utility. That is why we continue to engage with every available option. The process will require creativity and innovation. I assure hon. Members across the House that we will continue to consider every lawful option to use sanctioned Russian assets to rebuild Ukraine.
Dame Margaret Hodge
I am extremely grateful to the Minister for his generosity. Can he perhaps explain what the Canadians are doing? It is my understanding that the Canadians have seized the assets. Would he consider being a kleptocratic state or perhaps being an aggressor state, as has been suggested, as concepts that could bring seizing state assets within the rule of law? There are two issues there.
Leo Docherty
Our Canadian friends have legislated, but they have not yet found a legally watertight route to seizing those assets. The right hon. Lady speaks about other concepts that are of interest, and we will certainly consider them as we move forward.
Sir Chris Bryant
I am very grateful to the Minister. I am sorry, but what is the legal impediment, to his mind?
Leo Docherty
The hon. Gentleman knows a great deal about international law, so he will know that ideas such as these will be tested internationally and that if they are not watertight, they have no utility. It is not legally straightforward; this is entirely new ground and therefore it requires a robust legal framework. I think he would probably admit that it is unclear that one exists as yet. However, as ideas come forward, we are interested in testing them.
We are steadfast in our commitment to ensuring Ukrainian economic stability. We have committed to providing approximately £4.2 billion of fiscal support to Ukraine and, along with our G7 partners, we are committed to helping it to emerge from the war with a modernised economy that should be entirely resilient to Russian threats.
Let me conclude by saying that the recovery conference last week, which I referred to at the start, marked a further milestone in support for Ukraine and in ensuring that Russia pays for its actions. With our partners, we will keep up the pressure, while standing by Ukraine’s side until it wins and rebuilds.
Dave Doogan (Angus) (SNP)
Where will we find half a billion dollars to rebuild Ukraine? The international community, certainly; the World Bank, almost certainly; the EU and/or the US, definitely—but we should certainly shine a very bright searchlight on the ill-gotten gains of the Russian elites who stood by and watched Putin, who relies on the co-dependency they create, systematically destroy the natural and built capital of Ukraine for reasons so spurious that they would be comic if they were not so egregious and deadly for the innocent people of Ukraine.
Let us not forget where the playgrounds of those Russian elites were. They were in Paris, in Manhattan and in Mayfair, and elsewhere in London, where their inexplicable wealth sloshed around the property markets, casinos and car dealerships of this city. The Londongrad laundromat was a clear and present threat to national security, but in the tension between national security and the Tories’ access to wealthy Russians, national security came off second best.
London is the most notorious safe haven for looted funds in the world, with much of the money hidden via London in offshore trusts in British overseas territories. Even after years of campaigning by SNP Members and other stakeholders, it took Putin’s barbarism against the people of Ukraine for the Conservatives finally to stop accepting Kremlin-linked donations and to impose sanctions on Putin and his cronies. It is clear now what lies behind this Government’s pedestrian approach to pivoting from freezing assets to seizing them: the sheer value of Russian assets held within the UK. In this instance, as in many others, when I say the UK, I of course mean London.
Contrast that with Estonia, whose Government have declared they will present a blueprint for how Russian frozen assets can be legally seized. Their goal is to use the funds to pay for Ukraine’s reconstruction. The Estonian Prime Minister, Kaja Kallas, said last month that her country plans to offer a legal rationale for the expropriation of the €20 million in Russian assets that it has frozen. What it is to be a small EU nation that can act nimbly and remain in touch with its populace.
However, a country does not have to be a small EU nation to do the right thing. In Canada, the Frozen Assets Repurposing Act aims to allow Canadian courts to take the frozen assets of foreign officials whose misrule creates forced displacement and humanitarian needs. It essentially foresees new powers to seize and sell assets of sanctioned Russian oligarchs while repurposing the proceeds to help with the rebuilding of Ukraine. In Switzerland, should an oligarch fail to demonstrate the lawfulness of their wealth, the law on asset recovery would allow for the confiscation of frozen assets without the need to commence a separate civil proceeding. The European Commission has also followed suit, presenting in May a new directive on asset recovery and confiscation. The proposal seeks to modernise EU rules on asset recovery through a series of measures, including an asset recovery and management office with the power to trace and identify criminal assets, ensure that frozen property does not lose value, and enable its sale for the purposes of rebuilding Ukraine.
Sir Iain Duncan Smith
To clarify, there is a difference between the seizure of private assets and the seizure of state assets. Sovereign immunity simply does not stand in the way of the seizure of private assets, which requires only that legislation be passed, therefore negating the sovereign immunity. I accept that the Government could do that quite quickly—they have been talking about it—but state assets are a bigger issue because of state immunity. Again, legislative action could be taken, but it should be done in co-operation with other states so that there is no flight of capital.
Dave Doogan
I thank the right hon. Gentleman for his intervention, particularly because he highlights, as he did in his earlier intervention, the issues to do with state immunity. At the heart of this debate is an appeal for urgency on legislation that tests the very boundaries to which he refers. I take no issue with that intervention.
In contrast with what is happening in other jurisdictions, the UK has yet to transform its words about hoping that the proceeds of sanctions pay for reconstruction into a more informed policy and legislation-focused debate with action to follow. The UK cannot afford to be the weakest link in the western alliance’s struggle against Russian illicit finance. We recommend, as a minimum, that the UK Government review the designation criteria underpinning the global anti-corruption sanctions regime to consider whether an abuse of function would provide greater flexibility for FCDO officials to impose designations. Any new legislation must be properly funded, of course. New laws are useful only if they are properly implemented with the correct resource. Economic crime has been the poor relation in UK policing for too long. Economic crime enforcement in the UK is woefully under-resourced, particularly given the scale of the challenge posed by dirty money in the UK economy.
The UK has taken some steps—if belatedly—to freeze assets, but it must now legislate at the earliest opportunity to seize Russian assets, in accordance with international ambition and international law, with adequate funding and in co-ordination with allies who have done the same. While other countries are taking strides to legislate for how frozen Russian assets can be lawfully seized, the UK Government are, thus far, yet to make the transition from warm words to legislative effect. We need a step change on that immediately.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Eight Members are seeking to participate in the debate. We need to start the wind-ups at about 20 minutes to 7. It is a self-denying ordinance; I will not put a time limit on at this stage, but I may have to do so. If hon. Members could stick to six minutes, we will probably get everybody in comfortably.
Mr Jonathan Djanogly (Huntingdon) (Con)
The sanctions regimes, and measures taken under them against named individuals and Russian state assets, have played a vital role in the Ukrainian resistance, albeit one of a more slow-burning nature than military help. They are a slow-paced, grinding remedy against what has turned into a slow, grinding war in which bravery, defiance and the spirit and determination of enlisted men will ultimately allow Ukraine to prevail. We must play our part. As of May, records show that 1,604 individuals and 228 entities under the Russian regime are subject to the UK’s freezing sanctions to a value of approximately £18 billion. In addition, an estimated £26 billion of Russian state assets are frozen here in the UK. Russia is the most sanctioned country in the world, and while innocent Ukrainians continue to be killed for Russian imperialist ambitions, that must remain the case. More broadly, it is estimated that some £275 billion-worth of Russian assets have been frozen worldwide.
The Government are actively freezing assets. Freezing is good, but reallocating frozen assets to Ukraine’s benefit will be better, not least because of the monumental sums that are estimated to be needed to fund reconstruction—that is, reconstruction of homes, businesses, infrastructure and lives. I was therefore interested and pleased to read the detail of the statutory instrument—the Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023—laid by the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), last Monday. Its introduction enables freezing order sanctions to be maintained until Moscow pays compensation to Ukraine for the destruction that Russians have caused and will continue to cause until the war ends. It is a positive step towards the calls that I and many other Members of this House have been making for assets forfeiture, although we are certainly not there yet.
As part of the joint Foreign, Commonwealth and Development Office, Treasury and Home Office press release last week detailing these new legislative measures, I read with interest that the Government’s
“proposal to force sanctioned individuals to disclose UK assets will bring in greater transparency and leaves less room to hide.”
This proposal is long overdue, and I encourage the Government to make it a legal reality as soon as possible. Could the Minister explain the planned legislative process to enable that?
Questions over the specifics of the proposal remain. When brought forward, it is crucial that if sanctioned individuals are found to be in breach of the legislation, the proposal should open all their frozen assets to seizure and reallocation. I ask the Minister: would a breach of this provision cover an individual’s entire sanctioned asset base—at least that in the UK, and not just that which may have been found to have been hidden? That would have the dual effect of equipping the Government with a large motivational stick when it comes to greater transparency and allowing the effective forfeiture of a potentially significant amount of assets if breaches are identified. Both effects are desirable, and I would be interested to hear whether the Minister agrees.
Ultimately, the strength of the UK’s response to Russia’s attack on the post-1945 world order rests on being in lockstep with our international allies. The US, the EU and Canada are all proactively working on or have already implemented means of asset seizure and reallocation, even if only in a limited way. The move to allow frozen assets in the UK to be allocated towards Ukraine’s reconstruction complements similar moves in the US and Canada last year and EU proposals made earlier this month. All of this is very welcome.
Sir Julian Lewis (New Forest East) (Con)
I am grateful to my hon. Friend for giving way, and I apologise for missing the opening of the debate. Has any consideration been given to what should happen to the interest or other income generated by those assets during the period that they are frozen? Surely, even if the assets are not seized in the end, their owners should not benefit from anything that the assets earn during that frozen period.
Mr Djanogly
My right hon. Friend makes a different but important point. That aspect has been pursued by the European Union; in fact, I believe that it set up a committee a month or two ago to look at that very point. I think it is a very good idea, and we should certainly be pursuing it. Obviously, all these sanctioned assets cost money to keep—flats have to be maintained; boats have to be maintained—and we should be using income from these assets at least to pay for the maintenance of them, if not to get income that we can then give to Ukraine. He makes a very good point.
The Minister said earlier that the use of frozen assets towards reconstruction would not be allowed as a means of circumvention. It would, however, seem rather unlikely that a Russian sanctioned person would permit their frozen assets to be donated to Ukraine unless there was some benefit to them, such as sanctions cancellation. Perhaps the Minister could explain why else the sanctioned individual would want to do so. Why would they want to give their assets to Ukraine if there was not a deal to be had? The Ukrainians, it has to be said, have expressed concern at the prospect of deals being done with oligarchs in individual countries—they think that might breach the wall, so to speak. As such, could the Minister confirm that if deals are done at all, they would only be done on a multilateral basis?
To make one final point if I may, the original purpose of our adopting the Magnitsky sanctions was to protect those whose human rights are ignored by foreign regimes. As the Russian Federation staggers on, we must remain vigilant towards those of its citizens who support democracy. At this very moment, Open Russia’s vice-chairman Vladimir Kara-Murza—twice poisoned, and now sentenced to 25 years—languishes in a Russian prison, even though his lawyers and family are unsure of his exact whereabouts. Mr Kara-Murza, whose brave wife I had the honour of meeting in Parliament last week, is a valiant spokesman for democracy and human rights. The Government have sanctioned only five of his dozens of tormentors; even Lithuania has sanctioned 15 of them. As a British citizen, should Mr Kara-Murza not expect us to be leading the way on this issue? I hope that Ministers will now respond with appropriate resolution.
Dame Nia Griffith (Llanelli) (Lab)
I rise to speak in this very important debate on repurposing Russian assets to rebuild Ukraine. I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on setting out so clearly the case for doing so, and my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) on his work on the issue.
In February of this year, I had the privilege of going to Ukraine with the all-party parliamentary group on Ukraine on the anniversary of last year’s invasion, and to see Irpin and Chernihiv. There, we saw the destruction of bridges, homes and schools—a reminder of the fact that Russians have targeted civilian areas so often—and the need for generators, because time after time those areas have been hit by power cuts. However, all of that pales into insignificance against the destruction in the east, where whole cities—homes, hospitals and schools—have been left with no power supply and no water, their populations dispersed abroad, to other parts of Ukraine or to the frontline. We have also seen the flooding from the Kakhovka dam, and of course, vast areas of agricultural land are unusable now because of landmines. The task is absolutely immense.
This month saw the Ukraine recovery conference, held in London. A number of events and meetings ran alongside it, including Inter-Parliamentary Union events, which I was able to attend. It was very moving to hear Ukrainian MPs speak of the huge challenges facing their country, but impressive to see their absolute determination to build back better, strengthen democracy and tackle issues such as corruption. Time after time, Ukrainian MPs made clear that they want Russian assets seized to rebuild Ukraine.
We have to admire the immense resilience and determination of the Ukrainian people to rebuild. I have found that whether meeting bosses from the biggest telecoms company in Ukraine, whose workforce have repeatedly been the first out there to restore communication after yet another Russian hit; meeting the CEO of Naftogaz, who stated plainly that tackling corruption has to come before reconstruction; and meeting the deputy Minister for digital technology, who described some of the remarkable progress made in the digital sphere. However, he also pointed out that his departmental budget has been cut by 86%, with the money redirected to the Defence department. That reminds us of the huge economic challenges that Ukraine faces.
The task is enormous; the World Bank estimates that some $400 billion is needed to reconstruct Ukraine. Using frozen Russian state assets must be part of that, but the UK appears to be lagging behind. In the US, the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which would give the US President the power to confiscate Russian assets frozen in the US, has been introduced in the Senate and the House of Representatives; and in Canada, the Government are looking to seize $26 million from Granite Capital Holdings Ltd. But here in the UK we are still lagging behind.
This issue has been raised time after time in this House. We had a whole Backbench Business debate on the issue not very long ago, in which suggestions and mechanisms were set out very clearly by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) and others. Today, we have heard suggestions on what could be done from my right hon. Friend the Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Rhondda (Sir Chris Bryant). Time after time, we have made it very clear to the Government that they need to move faster on seizing frozen Russian state assets so that they can be used for rebuilding Ukraine.
Recently, like the hon. Member for Huntingdon (Mr Djanogly), I had the immense privilege and the very sobering experience of meeting the Evgenia Kara-Murza, the wife of Vladimir Kara-Murza, a prominent Russian dissident who has spoken out against the war in Ukraine. She told us of the terrible treatment of anyone speaking out and opposing or seeming to oppose the war, with detentions and arrests all the time, the routine torture of prisoners and the removal of children from so-called dissident parents. We heard how, back in November 2022, Canada first sanctioned Vladimir Kara-Murza’s persecutors, and how in March the US also sanctioned all 38 of his persecutors. However, to this day the UK has only sanctioned five. I have to tell the House that Vladimir was actually brought up in the UK and has UK citizenship, so I implore the Minister to make it a priority to sanction the remaining 33 persecutors, and to do everything possible to secure the release of Vladimir. Rather than lagging behind in this case, the UK should be taking the lead.
Many businesses in the UK have had to make alternative arrangements and different business decisions because of the sanctions regime. Although this may have been inconvenient or costly, they understand and accept the importance of using the strongest possible sanctions against Russia to try to exert maximum pressure on Putin’s regime to stop his illegal invasion of Ukraine. I would hope that Departments want to set an example by making sure they too stick rigorously to all sanctions, and do everything possible to ensure that no taxpayers’ money is inadvertently finding its way into supporting Putin’s regime.
In this context, I raise the question of the Home Office planning to use the Stradey Park hotel in my constituency for housing asylum seekers. The Stradey Park hotel was taken over a couple of years ago by an investment firm, which then sold investments in parts of the hotel, rather like timeshares, to a whole range of investors. There are now some 77 of those investors registered at the Land Registry as part owners of the hotel, and they can of course receive dividends from their investments in the hotel. One of them is a Russian domiciled in Russia, so the question is: what due diligence has the Home Office carried out to ascertain what connections this individual has with any individual, entity or sector against which we have sanctions? Departments should be taking extra care to ensure that no taxpayers’ money is being used in any way that inadvertently breaks sanctions.
In conclusion, I would like to stress to the Minister the need to be meticulous about the implementation of sanctions, and I urge him to speed up taking the necessary steps to enable Russian state assets to be seized and repurposed to rebuild Ukraine.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Before we proceed, I think as a courtesy I should explain to the House that I have given consent to certain hon. Members to leave in order to attend a meeting with a very senior Ukrainian military officer. It is no discourtesy to the House; they have my consent.
Robbie Moore (Keighley) (Con)
Following the comments that all Members have made, I am sure we all agree that Russia’s appalling assault on Ukraine is an unprovoked, premeditated attack against a sovereign democratic state. Our Government, through their actions, have illustrated that they are completely committed to supporting Ukraine in its fight to liberate the country.
We are all supporting Ukraine, as we are the world’s second-largest military donor, with this Government having given £2.3 billion in military aid. This year we have given a total of £9.3 billion of humanitarian, economic and military support. We are also training many Ukrainian pilots and troops in the UK and offering sanctuary to well over 230,000 Ukrainians. I am proud to say that many of them have made Keighley, Ilkley and other parts of my constituency their home, and I have been pleased to meet many of them.
We are also punishing Putin’s regime with the most severe set of sanctions that Russia has ever seen. We are sanctioning over 1,500 individuals and entities, and freezing £275 billion of their personal assets. Those sanctions are specifically designed to deal a severe blow to the Russian economy, hobble Russia’s military-industrial complex and punish Putin and his allies, including 120 oligarchs worth over £140 billion combined.
In addition to those sanctions, we have ended imports of Russian coal and oil, cutting off a key source of funding for Putin’s regime, while limiting the impact on our consumers. We have also stopped the export of high-end luxury goods to Russia and sanctioned Putin and his political allies, including Sergei Lavrov, hitting the Kremlin regime at its heart. We are working, too, in lockstep with allies to exclude Russian banks from the SWIFT financial system. Our sanctions hit not only Russia but it allies in Belarus. We are sanctioning Belarus for aiding and abetting Russia’s illegal invasion, making sure not only Russia but its allies feel the economic consequences of support for Putin.
Of course, our sanctions are only one part of what we are doing as a country. We have also provided much military support for Ukraine, including by donating Storm Shadow missiles, giving it the long-range strike capabilities it needs to defeat Russia and liberate its country. We will deliver £2.3 billion of military support this year in addition to the Challenger 2 tanks and self-propelled guns we have already provided, and the hundreds of armoured vehicles and advanced missiles that we provided last year and at the beginning of this year. We have also committed to train 20,000 Ukrainian troops this year, building on the success of the training programmes we have put in place which saw 11,000 Ukrainian troops trained last year, and we have provided £4.7 billion in economic and humanitarian aid to the Ukrainian people.
The Prime Minister took part last week in the Ukraine recovery conference, at which he secured well over £60 billion of combined support from other countries, galvanising international backing for Ukraine in the face of Putin’s ongoing attacks. The conference raised that money to go towards Ukraine’s recovery and reconstruction from nearly 500 countries as well as the G7 and EU member states. That is on top of our announcing last week a multi-year financial support package worth over £2.5 billion for Ukraine, helping Ukrainians win the war.
One year on, this Government are absolutely illustrating that we remain committed more than ever to making sure Putin’s barbaric venture will fail, and we will continue Ukraine’s fight as long as it takes until the war criminal Putin is brought to justice.
Andrew Western (Stretford and Urmston) (Lab)
It is not possible to calculate the true cost of Putin’s barbaric attack on Ukraine—the misery caused by the death, destruction, and despair he has inflicted cannot be quantified—but there are some costs that we are able to calculate, enormous though they are. We know that the illegal invasion has caused approximately $137.8 billion of damage to Ukraine’s infrastructure, and we know that approximately $50 billion-worth of damage has been inflicted on Ukraine’s housing stock and that its agricultural sector, which is vital to countries beyond Ukraine, has seen a hit of $9 billion.
Behind each of these statistics are of course people—people who must pick up the pieces of this carnage. It is essential that we provide them with every possible means of support to do that. So I am pleased that the Opposition have secured a debate today to push forward a vital way in which we can fund this support. For it is not enough to fully stand behind Ukraine’s resistance to Putin; we must also be fully behind Ukraine’s recovery after, as I hope, this awful war has ended and Putin has been defeated. I fully back today’s motion, which is consistent with the unwavering support we have shown for Ukraine in the last year.
As we have heard today, the cost of rebuilding Ukraine is estimated to be around $400 billion, equivalent in scale to the Marshall plan that helped rebuild Europe after the horrors of world war two. We must pull every lever at our disposal to help meet that cost. One such lever is the repurposing of seized Russian assets. From the very beginning of Putin’s invasion, Labour has called on the Government to do that. In that time, conservative estimates state that the UK has seized more than £18 billion and possibly, as we have heard today, up to £26 billion in Russian-owned assets, and I commend that effort. I also commend the Government announcement last week that Russian sanctions will remain until compensation is paid to Ukraine. However, we must go further and faster. There are vast numbers of Russian assets in this country, often acquired through the corruption of the Russian state. It is morally and politically right to re-purpose them.
Matt Western (Warwick and Leamington) (Lab)
I commend my hon. Friend on making an excellent speech. Does he agree that Canada is showing exceptional leadership in how it is dealing with the seizing of ill-gotten Russian assets gained from Ukraine?
Andrew Western
My hon. Friend makes an important point, and I will give some other examples later on of other institutions and nations that are also leading the way in that regard. For all that there is unity across the House in our support for Ukraine, the Government have not made enough progress on overcoming the obstacles that stand in the way of repurposing Russian state assets. Indeed, we had a debate in this place on these issues back in March, when my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) set out a timeline of Government commitments: Ministers had said on five occasions between July of last year and February this year that they were considering all options on using seized Russian assets to help rebuild Ukraine. We are a year on now from those first commitments on repurposing assets, and it is not clear that we are any further forward.
I urge the Government to take inspiration from what is happening not just in Canada but in the US, where legislation has been introduced in the Senate and the House of Representatives that would give the US President the authority to confiscate Russian assets frozen in the United States and transfer them to help Ukraine. The European Commission President has said that the EU bloc will put forward a proposal before the summer break on how the proceeds from the more than €200 billion belonging to the Central Bank of Russia frozen in the EU will be used to be pay for Ukrainian reconstruction. That is the level of urgency we need. I hope that when the Minister rises to wind up, they can let the House know what conversations the Government have had on the feasibility of replicating measures taken by our allies in the US and the EU.
We are all agreed on the importance of maintaining western unity in support for Ukraine, and part of that must not be falling behind our allies in the efforts to make Putin take financial responsibility for the damage he has done. The unity that exists in this House to support Ukraine is vital, but as part of that united effort, we must be able to press Ministers to go further and faster when it is needed. That is what today’s motion is about. I know that it is difficult, but Ukraine has no time to wait. We must see a concrete plan soon. The Government will have support from across the House in drawing it up and implementing it.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The illegal and unjust war that President Putin has waged in Ukraine has now lasted for 16 months, and it is likely to be some time before it comes to an end. As the shadow Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy) outlined, Ukraine, a country of more than 40 million people, has been subject to devastation on an unimaginable level. The country’s critical infrastructure has been deliberately targeted by Russian attacks, with hospitals, roads, energy infrastructure and hundreds of thousands of homes callously destroyed. But Russia’s illegal invasion has broken neither the Ukrainian people’s spirit nor the resolve of NATO and allies to stand alongside them both now and once victory has been achieved, as Ukraine rebuilds from this inflicted disaster.
As hon. Members have outlined, the World Bank estimates a recovery cost of more than $400 billion; it may cost up to $1 trillion. It is hard to wrap our minds around those figures, but, whatever the cost, the Ukrainian people deserve to emerge stronger from the conflict, and Russia needs to see that Ukraine emerges stronger from it. It is therefore absolutely right that we are thinking about how we best support Ukraine now and into the future. We should plan for victory and what that means. While Ukraine’s future must be determined by the Ukrainian Government, we must be doing all we can to support and contribute to the international effort that is clearly required.
That brings us to Russian assets here in the UK and whether and how they should be used for that reconstruction. The UK’s commitment to Ukraine has been steadfast, and proudly so, yet on this question we seem to be lagging behind. Our allies in the US and the EU are already taking steps towards developing the legislation needed to repossess Russian state assets to contribute to mending the impact of this illegal war. We must clearly act within the law, but we cannot hide behind the law. It is for us as legislators to find the legal means necessary to maximise financial support for Ukraine.
For far too long, the UK—London in particular—has been a repository for Russian wealth. The London laundromat served as a haven to billions of pounds of Russian money. We have a moral duty to put things right. We also have a significant opportunity to do that, and the need to do that speaks for itself. It is a matter of justice. The Treasury’s commitment to producing a plan that will criminalise the non-disclosure of Russian assets is welcome, but we need to see it and know when it will be introduced. There is no time for delay.
We need to start planning now for investing in reconstruction projects and ensure that every dollar and pound possible reaches Ukraine. To that end, I absolutely welcome the clarification sought by my right hon. Friend the Member for Barking (Dame Margaret Hodge) for the Government to publish transparently where Russian assets are held, how much they are and who they have come from. We must also take steps to ensure that whatever money is transferred in whatever form and however it is spent—I appreciate that there was a debate about that, which could explain some of the delays—we minimise the risk of any corruption.
The Government must start turning their rhetoric into action. We have heard for months about the intention to ensure that Putin pays and that these assets will be used, but warm words will not help Ukraine. Ukraine needs to rebuild itself, and we need to create the legal mechanisms to give it support to do so.
Once Ukraine succeeds, it needs not only to recover but to thrive. Whether that costs $400 billion or $1 trillion, it is clear that Russia and Putin must contribute towards repairing the immense damage they have caused. We can support making that happen. We have the means to do so by ensuring that the proceeds of Russian state assets held here in the UK go towards building Ukraine’s future. We need to give Ukrainians back their future—a future that they deserve—in a stable, secure and democratic state, where they can rebuild their lives. Let us as a country continue leading on support for Ukraine, and let us lead on financial support, too. Let us see the Government put their money where their mouth is, support our motion and show how they will ensure that these frozen Russian state assets are repurposed to rebuild Ukraine.
Layla Moran (Oxford West and Abingdon) (LD)
None of us will forget waking up nearly 18 months ago to the most dreadful scenes—images of war—happening on our doorstep in Europe. The people of Ukraine have endured the most unimaginable hardships in the last year and a half. I add my voice and that of the Liberal Democrats to today’s messages of solidarity with the Ukrainian people. We have not forgotten them, and we will continue to stand with them.
I also extend my thanks to the people of the UK. We must all be proud of the support that we have seen in this country. The British public have shown their deep generosity over the last year, opening their doors to Ukrainians. Over 2,000 Ukrainian guests have arrived in my home county of Oxfordshire—the fourth highest of any local authority in England. I opened my door to them, and it was a wonderful experience that I would highly recommend to anyone.
That war is not over, and it is vital that we do not rest on our laurels while Putin and his cronies continue to wage unimaginable destruction. We have known since the beginning that the best way to hit Putin where it hurts is through the wealth and assets of his cronies. We know that he funnels money through his oligarchs, which they squirrel away in property, superyachts and shell companies. They also hide it in far less glamourous places.
It was recently reported in Private Eye that the developers behind Botley West Solar Farm in Oxfordshire are potentially backed by dubious Russian money. Botley West would be the largest solar farm in Europe, sited on Blenheim Palace and Merton College land. The company behind it, Photovolt Development Partners, is registered in Germany but owned by Cyprus company Cranssetta Investments Ltd. The sole shareholder is a Yulia Lezhen.
A New York court case last year revealed that Yulia Lezhen’s husband, Dmitry Glukhov, was the primary beneficial owner of a goldfield development company that borrowed $58 million from Uralsib bank. The litigating company said that there was never any goldfield to be found. It looked for infrastructure, but did not find it. It alleged that the company was, in fact, a front to syphon off assets. It further said that it was not the only one, and that there were dozens of such companies, of which Photovolt—about to build to Botley West—was one. I ask the Minister: how can we know that Russian money is not still being greenwashed through our economy here in the UK? I would welcome a meeting with him or Treasury Ministers to get to the bottom of where the money is coming from.
Further historical questions remain for the Government about the money, most notably golden visas. A review of them was promised five years ago. The Government finally delivered a, frankly, pathetic statement a few months ago. I continue to challenge them to release the full report. If they have nothing to hide, they have nothing to fear. The cross-party work that we did in this place on the Economic Crime (Transparency and Enforcement) Act 2022 has been some of the most valuable work I have done in Parliament. It was a real opportunity to ensure that we are able to better fight kleptocracy and economic crime, not just in this case but in others in future.
It is not enough that we have seized Russian assets; it is time that we send those assets to where they will make the most difference. As we have heard, the estimated bill for post-war construction is in the order of $400 billion. The Ukraine recovery conference last week made an important start to those discussions. I welcome the UK’s part and our pledges. But the real prize is that $400 billion: all the assets we know exist that we could send. We are still unclear on what is stopping the Government from doing it. All I would say to the Minister is this: we have done it before and we can do it again. Where there is a will in this House, we can pass legislation quickly to help the Government. I urge them to come up not just with warm words, but a plan for how they will repurpose the assets and get them to where they are needed before it is too late. If we do not start rebuilding Ukraine now, morale will dip and that itself will affect the war effort.
The leader of the Liberal Democrats’ sister party Holos, Kira Rudik, said:
“This is the way we will ensure justice for all and will give a clear signal to other tyrannies about what consequences await them in case of encroachment on other people’s property.”
The Liberal Democrats continue to be proud to stand shoulder to shoulder against tyranny and will stand with Ukraine until it is victorious. When the Ukrainians are victorious, we will not walk away and leave them to pick up the pieces, or indeed the bill, alone.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I would like to start with a word of praise for what was a brilliant opening speech by my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary. He gave the House not just a cry of anger or a plea for solidarity, but a demand for justice. Justice is exactly what the people of Ukraine need and they need it now.
There are three questions at the core of this debate, which were eloquently set out by the shadow Foreign Secretary: a practical question about who pays for violence; a moral question of who is punished; and a political question of how we in this country stay on track and keep pace with our allies. We should start with the question of who pays, because that was where we ended last week at the Ukraine reconstruction conference. As we heard, the bill for reconstruction is now enormous: $400 billion and counting, a one-third hit to Ukraine GDP, a fiscal deficit that is through the floor and interest rates that are through the roof. Where on earth will that money come from? We give thanks to the Bretton Woods institutions, which, best case, have mobilised something like $55 billion between them. Notwithstanding the money that was raised, promised, committed and vowed at the reconstruction conference last week, the gap is still enormous. That gap takes us to the question of justice and the requirement on Russia to make good the gap.
Ultimately, we on this continent of Europe are not simply a rules-based order; we are a rights-based order. In the ashes of world war two, we stood together with 10 of our great allies and, on 5 May 1949, founded the Council of Europe, which Churchill declared would hold up
“moral concepts…able to win the respect and recognition of mankind”,
a council united behind what Churchill called the charter of human rights
“guarded by freedom and sustained by law.”
That is the charter Russia signed in May 1998 and that is the charter it has breached ever since. If we believe in rules, we believe in punishment for those who break the rules. If we believe the aggressor must pay, then we must punish the aggressor. If there is no sanction, sentence, penalty or punishment for those who break the rules, we can expect those rules to be broken time and time and time again. Is that not the lesson that we should learn from even a casual glance at Russia’s history: the throttling of Berlin in 1948, the invasion of Hungary, the invasion of Czechoslovakia, the invasion of Afghanistan, of Georgia, of Moldova, of Ukraine? When are we ever going to learn the necessity of re-containing Russia? We cannot change the geography of Russia, but we can and we must end Russia’s ceaseless choreography of war.
This is no time for the sentence to be deferred. Why should the people of Ukraine wait? Why should they suffer in the sight of their enemies luxuriating in riches while their soldiers die and their children shelter in basements? Why should they watch oligarchs who stole from the people of Russia live high on the hog in their well-tended mansions here in London and elsewhere. Why should the gold of the Russian central bank, all £170 billion of it, sit gathering dust in a vault while the Ukrainian people suffer? That is not justice. Justice deferred is justice denied. Every day that we fail to take action is a day that we fail Ukraine, a day that we fail justice, a day when we neglect our duties to stand up against the brutal code of tyrants who think that might makes right and the strong do what they can while the weak suffer what they must. That is why we have to ensure that Russia picks up the bill for Ukraine’s reconstruction today.
That is the case for justice. As for the political case, it is pretty straightforward. Our allies are moving forward in not just freezing but seizing assets; is it not time we moved with them? The United States Senate is moving forward; is it not time we moved with it? The Canadian Government are moving forward; is it not time we moved with them? The President of the European Commission says that the frozen assets of the Russian central bank will be used to pay for reconstruction; is it not time we moved with the EU? Why should we fall behind? Our allies are sending a message to us here in the House—pick up the pace!—and that is the message that we send to the Minister.
It is time for us to crack on. First, as the shadow Foreign Secretary says, we need a Bill to be brought to the Dispatch Box within 90 days. Let us make sure that it amends the State Immunity Act 1978, which gives central banks immunity from jurisdiction and from enforcement. Let us empower Ministers with the authority to make seizure and forfeiture orders. Let us change the relevant terms of international law to safeguard that Bill. Let us move a motion for debate at the UN General Assembly to make it very clear that the majority of states now see the phrase “entitled to immunity” in a different light in different circumstances, now that war has been committed on this scale. To protect ourselves from any attempts to misuse the European convention on human rights, let us immediately begin prosecuting Russia for the crime of aggression, so that it cannot pretend that it is in any way some kind of victim in this illegal invasion.
Let me end by saying this. No one in the House forgets their first visit to Kyiv, that glorious city of Europe’s eastern border. No one forgets the message that they see emblazoned everywhere, on the posters in the squares, on the trains and in the cafés: “Be brave like Ukraine.” That is the message that the House sends to the Ministers on the Treasury Bench today: “Be brave like Ukraine. Strike a blow for freedom, and send the message from this mother of Parliaments that democracy on this continent will never be defeated.”
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Ukrainians are fighting for their country. They are fighting for their freedom and democracy, they are fighting for our shared values, and they are winning. Yet we must not be complacent: support for Ukraine needs to increase, and to keep increasing. Ukraine is strengthened with our international support.
The question now rightly turns to what will happen when Ukraine wins. Many of the invaded towns and cities have been left in ruins. Mariupol, once a bastion of tourism and the arts, has been turned into a ruin. A centuries-old theatre was completely destroyed. The Russian forces acted barbarically, and it is estimated that nearly 300 civilians were killed. That is only one example among many horrific war crimes that have been committed by Putin’s henchmen.
In March, the House rightly debated the seizure of Russian assets. The Government can and must do more to ensure that dirty money and Russian assets do not remain hidden here. London must no longer be the laundromat for oligarch and kleptocrat dirty money. However, that money must be put to good use. The money generated or hidden here for decades has helped to finance the brutal invasion of Ukraine, and for too long a blind eye was turned to it. The Government have a duty to ensure that it is now used to rectify that mistake. Now is the time to start planning how to use the money.
Russian assets should be used to undo the damage and destruction that Putin’s army has caused. Nothing will bring back the brave Ukrainian fighters who lost their lives defending their homeland, but we have a duty and a responsibility to honour their sacrifice. We must honour their sacrifice by rebuilding their country; we must honour their sacrifice by ensuring that dirty Russian money is finally put to a good use. Many of the foreign policy mistakes over decades have been caused by Governments failing to plan ahead. This must not be another example. We must not wait until the war is over to start taking action.
Last October, the Government indicated support for repurposing Russian assets, yet there have been no specific proposals. Other countries—our own allies—are taking the first steps to achieve that goal. Time and time again, we hear the Prime Minister say how we are standing shoulder to shoulder with our allies to support Ukraine. Our biggest ally, the United States, has introduced the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act to repurpose frozen Russians assets towards Ukraine, and Canada and the EU are doing something similar. Our country should be doing the same. We are not standing shoulder to shoulder; we are following when we should be leading—especially as London has long been known as the Russian money laundromat. We need to correct this error.
Since the unjustified and brutal Russian invasion of Ukraine began, I have been delighted by the unity across the House in support of Ukraine, and I hope the same will be true of the efforts to rebuild Ukraine. This motion is the start of that process—a process that will likely go on for years after Ukraine wins—but it is the very least we can do. Putin invaded Ukraine because it dared to be a modern and free-thinking European nation. With our continuing multinational support, Ukraine will win. Russian assets and dirty money hidden here should and must be spent on rebuilding Ukraine for our brave Ukrainian friends, who are fighting for freedom and democracy. It is a war for our shared values, and that makes it our war as well. We must act now.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
It is a pleasure to speak in this debate, and I thank all my right hon. and hon. Friends, and indeed all Members, who have contributed to it. It has come at a pivotal moment, just a week after the Ukraine reconstruction conference, and at a critical time in Russia’s brutal war against the people of Ukraine. I draw attention to my declaration in the Register of Members’ Financial Interests as a shadow Minister.
Today’s debate has underscored not only the degree of unity and consensus in the House on the need to stand with Ukraine for as long as it takes, but the strong appetite for the UK to go even further. I commend the speeches we have heard from Members on both sides of the House, which had common themes. My hon. Friend the Member for Llanelli (Dame Nia Griffith) spoke powerfully about her experience of visiting Ukraine and seeing the destruction. My hon. Friend the Member for Stretford and Urmston (Andrew Western) set out the record of loss and damage. My hon. Friend the Member for Warwick and Leamington (Matt Western) explored how other allies, including Canada, are taking action. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) emphasised the need for urgency—that was a common message in all the speeches today. We heard a powerful speech from my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), with whom I travelled to Ukraine in September last year, about the wider consequences of not acting, the importance of deterrence and the fundamental importance of justice. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) gave a powerful illustration of the loss and destruction in the beautiful country of Ukraine.
We also heard many excellent speeches from the Government side. We had helpful legal clarity from the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). We had a useful question from the right hon. Member for New Forest East (Sir Julian Lewis) about the accrual of interest on the assets that are being held. We heard many other powerful contributions, which all had one common message.
It is beyond doubt that there is only one perpetrator responsible for the unjustified and unprovoked invasion of Ukraine, and that is Russia and Putin. We all remain committed to a just and lasting peace based on respect for the UN charter and Ukraine’s sovereignty and territorial integrity, but also its future prosperity and the flourishing of its democracy. We all want to see that.
However, intention alone will not bring Ukraine to that destination. We all need to be clear that it will take decades of commitment, determination, consistency and investment to ensure that that happens. Labour has been consistent in calling on the Government to repurpose Russian state assets to help rebuild critical Ukrainian infrastructure, provide much-needed humanitarian aid to the country and invest in its future, and I commend the work of my hon. Friend the Member for Rhondda (Sir Chris Bryant) in that regard in his ten-minute rule Bill. We have called for those things because we believe in justice, but we also believe in deterrence—
Mr Deputy Speaker (Sir Roger Gale)
Order. I am terribly sorry, but I think I am right in saying that the hon. Gentleman has just walked into the Chamber.
Stephen Doughty
We believe in deterrence not only in relation to Putin, but in relation to others who have egregiously breached the rules-based international order.
I have a great deal of respect for Ministers on these matters. Indeed, we have wholeheartedly welcomed the Government’s position on Ukraine, and we continue to show that unity, but we need to be clear that Ministers have not provided the answers. I ask them very directly and very pointedly: what consideration is being given to the seizure, sequestration and repurposing of Russian state-owned assets? I am afraid that our calls have been repeatedly met with haze. We continually hear the phrase “exploring all lawful routes”, which has been said to me five, six or seven times in the Chamber and in answer to written questions. We need greater clarity, as Ukraine does not have time to wait. There has been a clear call for urgency today.
The Government need to get on with this. They need to come up with the legislation and the necessary measures to allow frozen Russian state assets to be used to rebuild Ukraine. As our motion says, we hope and believe they can reasonably do this within the next 90 days. I hope the Minister can give us a clear timeline for when we can expect proposals. The President of the European Commission attended the Ukraine recovery conference, and she made it very clear that the EU will come forward with proposals before the summer. I hope we will see the same level of urgency from the Government.
I saw the scale of the damage for myself on my visit to Ukraine last year, and it was utterly shocking to see residential buildings with rocket holes through them and the wanton damage to civilian infrastructure, including railways and roads. We have all seen the terrible scenes at the Kakhovka dam and elsewhere in recent weeks.
As my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary, said, we cannot forget that tens of thousands of civilians have lost their lives and millions more are now refugees. This war will leave lasting psychological scars on every Ukrainian.
As I have previously relayed to the House, the Kyiv School of Economics, working in conjunction with the National Bank of Ukraine, estimates that, as of December 2022, the damage to residential and non-residential infrastructure amounted to $137 billion. The vice-president of the World Bank has estimated that the figure could be up to $630 billion, which is treble Ukraine’s GDP. This year alone, Ukraine’s national budget has a $38 billion gap.
Of course, before any reconstruction can begin, it will be necessary to clear the huge number of mines and unexploded ordnance that have been scattered across the country, including on the prime agricultural land that feeds not only Ukraine but the world. I commend the HALO Trust and others that do incredible work to deal with mines and unexploded ordnance. The HALO Trust has made it clear to me that it will take more than a month for every day of fighting to clear the ground of unexploded ordnance and munitions. This means that, if the war stopped today, it would take more than 30 years and billions of dollars to make areas safe for habitation and economic activity to begin again. There is also incomprehensible environmental damage. The destruction of the Kakhovka dam will have huge consequences not only for people but for the future ecological welfare of Ukraine, its wildlife and its economy.
We have heard many different arguments today about the legal possibilities, and my right hon. Friend the shadow Foreign Secretary set out very clearly what is needed. The UN General Assembly has already voted on this issue. A resolution was adopted by last November’s special session on Ukraine, setting out a very clear framework for how to proceed. Resolution ES-11/5 recognised that Russia
“must bear the legal consequences of all of its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts”.
The resolution also called for member states to recognise the need for
“the establishment, in cooperation with Ukraine, of an international mechanism for reparation for damage, loss or injury”.
Under international law, this would not be viable in ordinary circumstances but, by explicitly invoking a claim for compensation, the UN resolution clearly satisfies the specific prerequisites of notice and opportunity for Russia to comply.
It is worth noting that, as was referenced earlier, there is clear precedent for such action. A UN compensation commission was established in the case of the first Gulf war, and it paid out $52.4 billion-worth of Iraqi oil revenues to pay for reconstruction and reparations to Kuwait. Incidentally, Russia supported that resolution.
I hope the Minister can set out his thoughts on the many eminent legal proposals that are out there. There are clear examples of how we could proceed. There are proposals for temporary countermeasures and the temporary suspension of sovereign immunity—there are very clear grounds for that to be done. There are clear precedents in the law of countermeasures and clear grounds in the UN resolution, as well as other historical examples and precedents.
We are under no illusions that this is a complex area, and we recognise that drafting and implementing such legislation is challenging. However, given that extensive evidence out there, will the Minister tell us what review the Attorney General and his Department have made of it? When will he come forward with clear proposals? We heard repeatedly about the work of allies. Canada, the US and the EU have all taken or are taking practical, tangible steps to move in this area, in turning Russia’s state-owned assets into the means for Ukraine to forge a brighter future and to meet reconstruction needs now. They are taking the lead and we should be alongside them, as we have been on many other issues, be it on direct military support to Ukraine, humanitarian support or working together on sanctions.
In conclusion, the Prime Minister rightly stated at last week’s conference that Russia “must pay” for the damage it has inflicted. He said:
“we’re working with allies to explore lawful routes to use Russian assets.”
But we need to get on with this now. We must complement warm words with decisive and urgent action, beginning today. Labour is committed to working alongside the Government in their support for Ukraine, in ensuring that it wins this war and defeats Russia. We welcome the commitments made last week, but if we are to be a constructive and objective Opposition, we must make it clear that the UK can and must go further. Therefore, the motion is simple and clear, and if Members support it, it will begin a process that should have started many months ago. Russia forfeited its absolute rights to these assets when it embarked on this egregious, unlawful and unprovoked war of aggression, when it destabilised our continent and when it sought to dismantle the global rules-based order. The consequences not only in this situation, but for many others in the future if we do not act and ensure that there are consequences for Russia for what it has done are very serious and even more wide-ranging. I commend the motion to the House. Let us get on with it.
Mr Deputy Speaker (Sir Roger Gale)
With the leave of the House, I call the Minister.
Leo Docherty
Thank you, Mr Deputy Speaker. The Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) has had to go away to deal with an urgent welfare issue. So, with the leave of the House, let me begin by thanking all right hon. and hon. Members from across the House for the constructive tone of this debate and for their continued support for Ukraine in the face of Putin’s deplorable and illegal invasion. We have heard many thoughtful and considered speeches and interventions. First and foremost, I would like to reiterate our absolute determination to ensure that, fundamentally, Russia pays for the damage it has caused in Ukraine.
I was grateful for the contribution of the hon. Member for Cardiff South and Penarth (Stephen Doughty), and I will try to cover some of the points he raised. It was welcome that he reiterated the fact that Putin is to blame. We work on the basis that the perpetrator must pay, which is exactly what the Prime Minister outlined last week during the very successful Ukrainian recovery conference.
Sir Geoffrey Clifton-Brown
The Russian economy is worth about $1.8 trillion, ranking it 11th in the world. Does my hon. Friend agree that the UK has a strong legal base and that we need to work with our international partners so that we can send out a strong message to the Ukrainians today that there is a hope that one day their country will be rebuilt?
Leo Docherty
I am grateful for that intervention, as I entirely agree with it. If we look at the work that has been carried out by G7 allies, European nations and other states around the world in constraining the export of Russian hydrocarbons and finding alternative supplies, we see that the European energy picture has changed radically overnight. That was a consequence of allied will and effort. If we bring that same determination to the issues we have discussed today, we can have a very significant impact.
The perpetrator must pay and we are very clear about that. I will come on to what consideration we have given to the various options that have been laid out today, but I should say—
Mr Deputy Speaker
Order. I am nothing if not even-handed. I said to the hon. Member for Leeds North West (Alex Sobel) that it is not appropriate to come into the Chamber at the end of a debate and then intervene, and that applies to the right hon. Lady as well.
Leo Docherty
I am grateful to the hon. Member for Cardiff South and Penarth for laying out the various options. He asked what consideration we have given, give and will continue to give to them. First and foremost, we are working at pace. Our officials were in Brussels earlier this week, liaising with EU officials and looking at various models, so the work is continuing at pace. Clearly, if that were easy we would have done it already, but that does not mean that significant institutional effort and energy is not being put into the matter.
Mr Djanogly
The Minister is speaking about the EU. Is the issue not that at the start of the conflict the UK was leading the pace, particularly in financial services and other areas, but as the war has progressed, we seem to have been waiting for the EU, as he mentioned, and the US to lead the way? Is it not now time for the UK to regain the initiative once again?
Leo Docherty
I respectfully disagree with my hon. Friend’s characterisation. We are all looking at these issues. Clearly, the EU has some ideas about the potential use of interest payments on seized assets. That is an idea, not a legally tested, viable route. As the EU is considering that, so are we, which is why our officials were in Brussels earlier this week.
Mr Djanogly
To follow that theme, let us take the question of interest as an issue. That idea has not come out of the EU in the past two months; it has been spoken about for at least six months, but the EU has decided to look at it in the past two months. Has my right hon. Friend not considered that that is something we should have done by now?
Leo Docherty
It is certainly under consideration, but it will depend upon legality. If there is no legality, there is no utility.
Stephen Doughty
I thank the Minister for giving way; he is being generous. It is welcome that he is having those discussions with our allies in the EU, and I hope he is speaking to the United States and Canada about it as well. Will he give us an idea of the timetable? The motion is very reasonable and specifies 90 days, as we recognise these are complex issues. The EU has committed to coming forward with proposals before the summer break. Will he do the same?
Leo Docherty
I will not commit right now, but I can give an assurance to the hon. Gentleman and the House that we are working at pace, as we recognise that this is an urgent issue. Urgent is what we will be and do, in terms of pushing the business forward.
On a similar theme, the hon. Member for Cardiff South and Penarth made some interesting comments about the United Nations General Assembly resolution ES-11/1. We note that resolution and recognise that there are interesting parallels that might be considered with regards to the situation post-war, vis-à-vis Iraq and Kuwait. Of course we will consider that, as we do all other options.
The hon. Gentleman mentioned the Canadian model. For the clarification of the House, the Canadians use the term “seizure” for freezing. Like the UK, Canada is not yet able to test the lawfulness of any potential seizing fully, as we understand it, through their court system. They have the legislative start, but it has not yet been legally tested. We will keep in touch with our Canadian colleagues as they move forward. He asked what role the Attorney General, my right hon. and learned Friend the Member for Banbury (Victoria Prentis), might have. He will know that she is much vested in this matter. She has visited Kyiv to look at accountability issues and she will keep colleagues updated as she reviews those issues.
Robbie Moore
In my speech, I mentioned that the Prime Minister had attended the Ukraine recovery conference last week. Does the Minister agree that that demonstrates that the Prime Minister and the Government are taking world leadership on the issue, by bringing together countries from across the world, including EU member states and G7 states, to commit at least £2.5 billion as part of the recovery package for Ukraine, once the war has finished?
Leo Docherty
I entirely agree with my hon. Friend. Last week was a remarkable show of the convening power of the UK, the tremendous resolve of our Ukrainian friends and the remarkable scale of global support, not just in military hard power but in global capital. When that global capital is mobilised to help Ukraine resurrect itself, that will, in tandem with the military effort, lead to a Ukraine that is sovereign and able to resist all potential future threats. Last week was a great success, but there is more work to do.
Finally, let me say to the hon. Member for Cardiff South and Penarth that I am grateful for his reflections on his visit to Ukraine. His insights into the scale of the destruction are very welcome. I am grateful also that he mentioned the HALO Trust, which does heroic work to expedite de-mining. It is 30 years of work, and we are proud to be putting some of our investment into that. It is money extremely well spent. It also speaks to the horrendous scale of environmental damage that has been wreaked right across the country. I am very grateful overall for the hon. Member’s constructive tones.
I should reassure the House that our sanctions have inflicted a severe cost up until this point on Putin for his outrageous imperialist ambitions. In collaboration with key partners, we have now sanctioned more than 1,600 individuals, including 130 oligarchs. We have frozen more than £18 billion-worth of assets in the UK and sanctioned more than £20 billion-worth of UK-Russia goods trade. We will stand with Ukraine for as long as it takes in that regard.
Catherine McKinnell
The Minister has set out the significant recovery of assets through sanctions, which rather brings us back to the point that the Government have not really been clear about: what is the delay on deciding how and whether those assets can be repurposed for reconstruction in Ukraine? Am I right in thinking that the Government responded to a parliamentary question back in July 2022—so almost a year ago—saying that they were considering all options on assets that have been seized, including whether they can contribute towards the reconstruction of Ukraine? Why is it taking so long? It does create the fear that the Government have considered it, but have not yet come up with the answer.
Leo Docherty
It is taking a long time because it is very complex. There is no straightforward legal route. No other nation has yet come up with a tested legal proposition despite legislative activity. We are therefore moving in tandem with our allies to expedite and find a route, but if it were very simple, we would have done it already.
Through the G7 leaders’ statements, we have been very clear that the perpetrator should pay. We have underlined our continued commitment to that objective by introducing new legislation to enable us to keep sanctions in place until Russia compensates Ukraine. Nothing is off the table, as I have already said today, and we continue to work with our international partners on the options for using sanctions for reconstruction purposes. However, of course, if it is not legal, it is not viable and therefore not useful.
Robbie Moore
I thank my hon. Friend for giving way. Of course, the whole purpose of imposing sanctions is to stifle the economic drive that Russia is undoubtedly using to fund its aggression against Ukraine. Can my hon. Friend confirm that he and the Government are using their ability to encourage other allies to keep their sanctions in place and to take their lead from us?
Leo Docherty
That is a very relevant and good point. We have made the point to colleagues around the world that all allies must stand together to prevent circumvention, because economies more connected and more proximate to Russia face severe economic impact. We do work with allies to ensure compliance and also to prevent circumvention.
As we saw last week, the new measures that were announced during the Ukraine recovery conference marked a significant step forward to driving Ukraine’s reconstruction through a number of different ways. Both the Prime Minister and the Foreign Secretary emphasised the UK’s continued commitment to ensuring that Russia pays for the reconstruction of Ukraine. The Foreign Secretary announced fresh action to increase the pressure on Putin and his supporters through a series of key measures: first, the new legislation, which I have referred to, enabling us to maintain the sanctions on Russia until Moscow pays compensation to Ukraine; secondly, the development of a route to allow sanctioned individuals to volunteer their money to go to Ukraine to help reconstruction; and, thirdly, under the sanctions regime, delivering a new requirement for sanctioned individuals and entities to disclose assets they hold in the UK.
That, in the round, will ensure that we drive forward, that the perpetrator pays and that we can help our Ukrainian friends to rebuild their magnificent country.
Question put and agreed to.
Resolved,
That this House condemns Russia’s illegal invasion of Ukraine; stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state; recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions; commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.
Business without Debate
Air Quality: Luton Road, Dunstable
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Andrew Selous (South West Bedfordshire) (Con)
It is vital for our health that the air we breathe is as clean as possible. When I was on the Select Committee on Health and Social Care, I had the honour to chair the health component of a five-Select Committee report into improving air quality. We should be honest that, unless we are all happy to be a lot poorer, there will always be some difficult compromises involved, but none the less it is right that the Government are committed to improving air quality.
The Government recognise that local action in areas such as transport and planning is key to making the improvements required around the country. Reducing diesel-powered heavy goods vehicle traffic in residential areas and reducing the frequency with which HGVs have to start and stop, which leads to additional concentrations of fine particulate matter caused by brakes and tyres, is a critical part of that action.
On 17 January 2005 an air quality management area was declared in Dunstable by the former South Bedfordshire District Council. The Woodside Link road was first proposed in 2012. At the funding and permissions stages, it was made abundantly clear that reducing traffic, especially HGVs, within the Dunstable AQMA was a key objective of the scheme.
That objective was spelled out in the 2006 air quality action plan, the 2012 Woodside Link consultation document, the 2012 environmental assessment report for the Woodside Link road, the 2012 Central Bedfordshire Council environmental scoping report, the 2013 Woodside connection and Houghton Regis development modelling report, the 2013 local pinch point funding evidence document, the 2013 letter to the chief executive from the South East Midlands local enterprise partnership and the 2015 Woodside Link contract award. I think the Minister will agree that that is irrefutable evidence of what the Woodside Link was intended to do—namely, to provide a direct route for HGVs between the M1 and the Woodside industrial estate. It was not intended to increase traffic in half of Dunstable’s AQMA by redistributing HGVs from the high street in Dunstable to Luton Road, yet unfortunately that is what has happened.
The air quality action plan was produced in 2006 and cited the proposed Woodside Link scheme as a means to divert traffic, especially HGVs, away from the AQMA to improve air quality. However—and it is a very significant however—the Woodside Link economic case was published in February 2014, although it does not appear to have been publicly available, and stated:
“The traffic flow forecasts indicate that there is an increase in flows along Luton Road as HGVs re-route in order to access the Woodside industrial area.”
That is highly significant, because the Luton Road is around half of the AQMA. That statement from February 2014 is completely at odds with the document that was put in the public domain on 3 November 2016—namely, the area-wide weight limits report. That report states, at paragraph 15b on page 7:
“An earlier proposal for weight limits in the area was met with opposition from residents of Luton Road. However, it is felt that the completion of the A5-M1 and Woodside Link roads will mean that heavy traffic in Luton Road will be reduced. It is unlikely that side roads will be used in preference to Luton Road, particularly since the proposal is not expected to increase lorry traffic in Luton Road.”
What the public were told was very clear and stated in multiple documents—fewer HGVs on Luton Road as a result of the Woodside Link—and there it was in black and white. So it appears that Luton Road residents were not given the full facts in the run-up to the decision to build the Woodside Link, which received £5 million of central Government funding.
If we then fast-forward to the 2022 post-opening report for the Woodside Link road, we see that there are no traffic studies available for Luton Road—which, I repeat, is roughly half the AQMA. However, I am grateful to one of my highly assiduous constituents, who has looked at the existing traffic studies on three neighbouring roads—Boscombe Road, Church Street and Poynters Road—and has calculated that there has been an 18% increase in HGVs travelling along Luton Road, following the redistribution of traffic that arose in 2018 from the imposition of weight limits on other roads. Central Bedfordshire Council does not want to use the 18% figure, but has confirmed that it is likely that there has been an increase in HGV traffic along Luton Road. That is highly significant given that a major argument for building the Woodside Link road was to improve air quality across the whole of the AQMA, and certainly not just half of it.
A large number of the people who were identified as the key beneficiaries of the Woodside Link road at the funding stage—residents of Luton Road and nearby—are now worse off as a result of the scheme because increased HGV traffic outside their front doors is not a benefit for air quality purposes. Despite that, Central Bedfordshire Council is reporting to the Department for Transport, in the five-year post-opening report, that all the objectives of the scheme identified at the funding stage have been achieved. My assiduous constituent did not agree with some of the figures in that report. It took him six months of complaining to get the figures changed.
There had been claims that the original figures had been reviewed by the Department for Transport, but it turned out that that was not the case either. My constituent had to request copies of the report under the Environmental Information Regulations 2004, and had to wait nine and a half weeks to be provided with a copy. It also needs to be pointed out that the air quality action plan for Dunstable has not been reviewed since its adoption by the former South Bedfordshire District Council in 2006—seventeen years ago. Those plans are supposed to be reviewed every five years.
As MPs, sometimes people come to us about something and there are no easy solutions, but in this case, there is one. Significantly greater use of the Woodside Link road by HGV traffic coming to the Woodside industrial estate and neighbouring industrial developments would provide huge relief. On page 181 in section 13.5, the environmental assessment report for the Woodside Link road, published in October 2012, says of the Woodside Link:
“The route alignments have been designed to maintain substantial distances between existing properties and the new road, where possible.”
The road also includes noise, fencing and bunds. There are significantly fewer residential properties alongside it, and the homes that are alongside it are further away, with some of the protection I have just mentioned.
Coming to the Woodside industrial estate and the neighbouring business developments up the M1 from the south, the additional journey time to go to junction 11A and use the Woodside Link road only takes a few minutes longer than using the Luton Road. The Luton Road is more congested and has many traffic lights on it, causing HGVs to stop and start, producing more diesel fumes and more particulate matter from brakes and tyres.
There is one very significant local business based close to Luton Road which is doing the right thing, and that is Amazon. Amazon sometimes gets criticised as a business, possibly unfairly, but from the very beginning, it has instructed all its delivery drivers to avoid using junction 11, which would necessitate travel along Luton Road, and to use junction 11A instead. That specifically applies to drivers coming up from the south as well. Amazon continues to make that instruction very clear, and is an example of a business behaving responsibly, acting as a good neighbour and caring about local residents’ health. We need other businesses to follow suit.
I salute the patient and studious detective work that my constituent has undertaken to reveal all this information. It is with a desire to seek full transparency, accountability and the remedies necessary to put these issues right that I have brought these matters into the public domain this evening. It should not have taken this long to get this far. Central Government must have a role in overseeing the proper conduct of local government in the noble pursuit of helping people to breathe air that is as clean and pure as possible. It also has a duty to ensure that its money is spent according to the objectives originally stated, with accurate and transparent evaluation of the actual outcomes.
I look to the Minister, who I know is new to this case, to take a serious interest in it and to get into the detail with her officials and Central Bedfordshire Council. As I said, I think there is a solution, and I think we could make life better, as we all originally intended to do.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)
My hon. Friend the Member for South West Bedfordshire (Andrew Selous) is correct: I am new to this case and, indeed, to this portfolio. However, this debate has led me to understand some of the monitoring that has been carried out in South West Bedfordshire and the wider area. I thank him for bringing this case to my attention and for giving me the opportunity to set out what the Government are doing to improve air quality, which is a fundamental part of our environmental improvement plan across the Department for Environment, Food and Rural Affairs.
Poor air quality is the greatest environmental threat to health, leading to reduced life expectancy and costing the NHS and society billions of pounds each year, so action from Government is vital. Since 2010, we have achieved significant reductions in major pollutants. I hope my hon. Friend will allow me to talk about some of the positive things that have been achieved, and then I will move on to the specifics of this case, where further interrogation of the monitoring results is clearly needed.
We know that emissions of fine particulate matter, known as PM2.5, are down 10%, emissions of nitrogen oxides are down 45%, and emissions of sulphur dioxide are down 73%. Of course, that is good news and is heading in the right direction, but we must go further. Reducing concentrations of PM2.5 in England by just 1 microgram per cubic metre in a single year can prevent around 50,000 cases of coronary heart disease, 15,000 strokes, 9,000 cases of asthma and 4,000 lung cancers over the following 18 years. That is why earlier this year, we set a new maximum annual mean concentration target for PM2.5 of 10 micrograms per cubic metre, down from the previous limit of 20 micrograms, to be met by 2040. Alongside that, we set a population exposure reduction target, which will mean that on average, everyone’s exposure to that harmful pollutant will fall by over a third by 2040. The measures through which we will meet those stretching targets are set out in the environmental improvement plan, which was published on 31 January this year. That action includes continuing to tackle emissions from domestic burning; challenging councils to improve air quality more quickly; reducing ammonia emissions from farming; and improving our regulatory framework for industrial emissions.
As the environmental improvement plan recognises, councils play a vital role in improving air quality and have the tools and levers to tackle air pollution at a local level. Throughout my hon. Friend’s speech, he referenced a particular road, Luton Road, and the good work that a business in his constituency—namely, Amazon—has done by directing its drivers down a different road. Traffic regulation orders are one tool that the local council could potentially look into, and while that is closer to the remit of the Department for Transport, I would be very happy to meet Transport Ministers—probably the roads Minister, my hon. Friend the Member for North West Durham (Mr Holden)—to talk that proposal through.
We are committed to working with local authorities, providing them with clear guidance, funding and tools. On air quality specifically, that includes the air quality grant, which this year provided over £11 million to 44 local projects. Since 2010, we have funded over 500 projects, ranging from anti-idling campaigns around schools to training GPs to become air quality champions. It also includes the £883 million we have made available to help local authorities develop and implement local nitrogen oxide reduction plans and support those impacted by those plans.
I pay tribute to my hon. Friend’s constituent, who seems to be a real champion for improving the air quality in his community. We need those champions—can-do people in the local community who know their area best. It should not be so difficult for people in our communities to get the information and data that they need: even I have struggled to get the data I need to influence policy. That is something that we absolutely need to improve on. The guidance we have provided also includes the revision of our air quality strategy, which we published in April this year. That strategy sets out how we expect local authorities to use their powers to improve air quality and support delivery of our stretching national targets.
Turning to the Woodside Link, that scheme was completed in 2017 to improve access to housing and other developments in the Dunstable area, with £5 million of Government funding; a further £33 million came from the council and third-party organisations. From the embryonic stages of the link road, as my hon. Friend the Member for South West Bedfordshire explained—he will know, because he has been the Member for the area since 2001, all the way through the scheme—local residents were hoping to see a reduction in heavy goods vehicles on that road. The council has shared its “five years on” report with the Department for Transport, and I know that my hon. Friend has raised concerns with that Department, too. The findings and the impacts of the scheme are matters for Central Bedfordshire Council, but I am very happy to take this issue up with it, and I of course recommend that my hon. Friend continues to engage most assiduously with the council on it.
Luton Road is part of Central Bedfordshire Council’s declared air quality management area. The air quality management area was declared in 2005, due to exceedances of the nitrogen dioxide air quality objectives from roadside emissions. I am pleased that Central Bedfordshire Council has stated in its latest annual progress reports to us that the levels of nitrogen dioxide on Luton Road have been compliant with objectives since 2018. My understanding, however, is that there is not a monitor for PM2.5 on Luton Road.
Andrew Selous
I am very grateful for the Minister’s interest and I would like to take up the offer of a meeting with the roads Minister and her to try to work with the local authority, because I think we can move forward to make things better. I think at the heart of this is the public statement
“that heavy traffic in Luton Road will be reduced.”
That has not happened, and that is where the anger comes from. More HGVs belching out diesel fumes when stopping and starting at lights means worse air quality. We will need to measure where I looked before and after, but it must have got worse: more HGVs means the air quality gets worse if someone’s front door is next to a busy road such as that. That is where I think the disappointment and the anger is. The Government do need to be transparent, honest and straightforward, and if we have not achieved what we said we were going to, we need to go back and do a proper post-evaluation report and see what we can do to put it right. Would she not agree with me about that as an approach?
Trudy Harrison
I would certainly agree with the local MP, who has served the area since 2001. He has seen this project through to fruition and absolutely understands the concerns—first, the promises made to his constituents, and now the concerns—about increased traffic and therefore increased emissions. While the Department for Transport does have a comprehensive plan to decarbonise the transport sector, including heavy goods vehicles, we are not there yet. As I have set out, air quality is a fundamental and vital part of our ability to survive and thrive, and it is critically impacting on the health of our nation.
I look forward to meeting to speak in more detail with my hon. Friend, the roads Minister and perhaps members or officials from Central Bedfordshire Council to see how we can assist. I will also remind the council that the action plan for the Luton Road air quality management area dates from 2006. That has not been updated by Luton Council. I am pleased to say that, last year, we strengthened the Environment Act 2021 by introducing a new escalation process.
Andrew Selous
I appreciate that this is a long way from the Minister’s constituency, but the council that has not updated the action plan is Central Bedfordshire Council. This is about Luton Road, but that is within Central Bedfordshire Council, which is the local authority.
Trudy Harrison
I thank my hon. Friend for that correction. There has been a new escalation process for local authorities behind on their reporting duties, including where air quality action plans have not recently been updated, and that will come into force on 30 June.
I can assure my hon. Friend that, even after compliance with the legal air quality objectives has been secured, we do expect local authorities to continue to act to improve air quality. As we set out recently in the air quality strategy, we fully expect councils to take action to reduce emissions of PM2.5 from sources within their control. If we consider that the action from councils is insufficient, we will consult on introducing a stand-alone legal duty on local authorities to take action to reduce PM2.5 emissions.
I thank my hon. Friend again for raising this important issue and for giving me reason to look into our monitoring across the country, particularly the monitoring undertaken in his constituency and specifically on Luton Road. I hope that I have reassured him that we are taking comprehensive and necessary action to drive down harmful emissions, but there is always more to do. We are doing this at both national and local level, protecting our people’s health and our environment, and I look forward to following up with my hon. Friend to discuss this in much more detail.
Question put and agreed to.
Draft Double Taxation Relief and International Tax Enforcement (Brazil) Order 2023
Draft Double Taxation Relief and International Tax Enforcement (San Marino) Order 2023
(10 months, 2 weeks ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Victoria Atkins)
I beg to move,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Brazil) Order 2023.
The Chair
With this it will be convenient to consider the draft Double Taxation Relief and International Tax Enforcement (San Marino) Order 2023.
Victoria Atkins
It is a pleasure not only to serve under your chairmanship, Sir Robert, but to have a high-powered Committee scrutinising these important measures. Nestled among us is the United Kingdom trade envoy to Brazil, my hon. Friend the Member for Dudley North (Marco Longhi). He may wish to address the Committee in due course.
The orders give effect to double taxation conventions with Brazil and San Marino. Like all conventions, these agreements are based on the OECD model tax convention and will provide tax certainty to business and investors by removing double taxation without creating opportunities for the avoidance of tax. They will remove barriers to cross-border trade and investment, support growth, and provide a clear and fair framework for taxing businesses that invest and trade across borders. This will benefit businesses and the economies of both the UK and the respective treaty partner.
The agreements contain all the minimum standards that were introduced by the joint OECD/G20 project on base erosion and profit shifting, which ensure that such conventions are not used to avoid or evade tax. They are clear that it is not the purpose of such a convention to create opportunities for tax evasion and avoidance, and a principal purpose test denies treaty benefits in cases of abuse. Both conventions allow for the exchange of information between the two countries to facilitate tax transparency, which will strengthen our defences against tax avoidance and evasion.
I am delighted to bring the Brazil order before the Committee, because Brazil is the largest economy with which the United Kingdom does not—until now—have a comprehensive double taxation convention. It has long been the United Kingdom’s ambition to reach an agreement with Brazil, and it has been a regular request from businesses. The convention will bring many benefits to the UK, including to our businesses and investors, and those who want to take advantage of the opportunity to trade in the country with the 10th largest GDP in the world, with a population of 214 million people.
This measure provides limits on the tax that can be charged on dividends, royalties and interest, which in many circumstances are less than the tax rates applied under Brazil’s domestic law. It also limits the circumstances under which trading profits of United Kingdom enterprises may be taxed in Brazil. UK businesses will particularly welcome the fact that the convention phases out, over a four-year period, Brazilian taxes on some payments to United Kingdom-based service providers and provides for significantly lower taxes during that period.
The San Marino convention is really good for business. San Marino is smaller in terms of its population and economy; none the less, the agreement will exempt the majority of dividends, interests and royalties from source state taxation. That means that United Kingdom residents with investments in San Marino will not pay tax in San Marino on the income that they receive. The exception to this is in respect of United Kingdom real estate investment trusts, where the convention preserves the United Kingdom’s right to these at 15%. That will ensure that the UK does not lose taxing rights where the profits from these structures are otherwise exempt. We have also set out rules on dispute resolution, which are in line with the OECD’s expectations and provide certainty for parties in both countries. The taxpayer can refer any matter for independent arbitration if agreement cannot be reached by the two countries.
In summary, the United Kingdom and both Brazil and San Marino can be happy with these agreements. They protect United Kingdom revenue and provide a clear, fair, stable, long-term framework within which trade and investment between the UK and Brazil, and the UK and San Marino can continue to flourish. I commend the draft orders to the Committee.
James Murray (Ealing North) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Sir Robert. Double taxation agreements prevent income or gains from being taxed in both the territory in which they arise and the territory in which the recipient is resident. As the Minister set out, such agreements benefit taxpayers by ensuring certainty of treatment, and they include provisions to combat tax avoidance and evasion.
I understand that today’s Brazil order brings into effect a convention and protocol made in 2022 between the UK Government and the Government of Brazil, superseding previous arrangements, while the San Marino order brings into effect a double taxation agreement for the first time. As the Minister said, both double taxation agreements follow the OECD model tax convention on income and capital and include the minimum standards recommended by the OECD/G20 base erosion and profit shifting project, both of which we welcome. The detail of each order sets out the scope and the definitions of, for example, “residents” and “permanent establishment” that will be used to put the arrangements into effect. The orders also set out the rules governing the taxation of different sources of income and gains, including employment income and capital gains, as well as gains that arise from sources such as dividends, royalties and interest.
We will not oppose either order, as we recognise the value of having up-to-date double taxation agreements in place between the UK and other countries, but I will ask the Minister one specific question for the Committee’s interest. Will she explain how the double taxation agreements will operate where an individual is resident but non-domiciled in the UK? I realise that that may be a broad question, so I will give an example. Under the San Marino order, what would be the income tax treatment of someone who is resident in the UK, had income arising in San Marino, but was domiciled for UK tax purposes in San Marino and chose to pay tax on a remittance basis? I realise that that is a fairly specific scenario, but it would be helpful to understand how taxation would be applied in those circumstances, to help us better understand the interaction between double taxation agreements and non-dom tax status. I look forward to the Minister’s response.
Marco Longhi (Dudley North) (Con)
It is a pleasure and an honour to be able to speak in this Committee, so I thank the Minister and colleagues for indulging me. The Brazil double taxation agreement was in fact signed by the UK and Brazil last year, following years of negotiations between HMRC and its Brazilian counterparts to iron out, as the Committee may imagine, many a detail. It is a fact that trade flows between countries improve GDPs and the health and wellbeing of populations, who benefit through extra jobs and job security.
The process now requires ratification by our own Parliament, which is why we are here, and the Brazilian Senate. I am personally assured by the President of the Brazilian Congress that, once he receives submission from the Federal Revenue of Brazil, he will progress it through their chamber expeditiously.
The absence of a double taxation agreement is the single biggest market access barrier preventing businesses from investing in both our countries, as we have heard. Brazil, as we have also heard, is the only G20 country with which we do not have a double taxation agreement, and we have well over 100 such agreements in place. I ask the Committee to please support the Brazil order and, indeed, the San Marino order.
Victoria Atkins
The usual parliamentary appetite is for such Committees to be short and to the point, but I really did welcome the contribution from my hon. Friend the Member for Dudley North (Marco Longhi). As the UK’s trade envoy to Brazil, he was able to add to our considerations not only the enthusiasm that the Brazilian authorities have for the order, but the intensely hard work that has gone into the agreements—and, of course, his role in helping to ensure that the Brazilian procedures run as smoothly as we would like, once we have done our part and passed the draft orders.
Turning to the shadow Minister’s question about non-domiciled taxpayers, I gently remind him that the UK-San Marino agreement covers some £16 million in trade between both countries and that the Brazilian tax agreement covers some nearly £8 billion in trade. I am sure he will agree with the UK Government that it is right to try to ensure that we clear away the trade barriers that were so eloquently referred to by my hon. Friend the Member for Dudley North, to ensure that wealth and prosperity moves between both countries.
The Brazilian DTA applies only to remitted income from Brazil, but the remittance basis is not generally a factor in applying the double taxation agreement. Indeed, residence and source of income are the factors. In relation to the convention more generally, it takes effect only in respect of payments remitted to the UK. Relief cannot be given on unremitted amounts on which tax has not been paid.
I trust that the Committee is content with its consideration, and I am most grateful to its members for their contributions. I am asked to remind the Committee—although I think my hon. Friend dealt with this—that Brazil has not yet completed its processes for ratifying the convention, but we are playing our part in this place by ratifying our side of things. We look forward to Brazil doing the same imminently. I hope that the Committee will approve the draft orders today.
Question put and agreed to.
Draft Double Taxation Relief and International Tax Enforcement (San Marino) Order 2023
Resolved,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (San Marino) Order 2023.—(Victoria Atkins.)
Victims and Prisoners Bill (Fifth sitting)
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Public Bill CommitteesRead Full debate Victims and Prisoners Bill 2022-23 View all Victims and Prisoners Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 June 2023 - (27 Jun 2023)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Chair
We will now start line-by-line consideration of the Bill. Hansard would be grateful if you could email any speaking notes to hansardnotes@parliament.uk, or pass them to the Hansard colleague present. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same, or a similar, issue.
Please note that decisions on amendments take place not in the order they are debated but in the order they appear on the amendment paper. The selection list shows the order of debates. Decisions on each amendment will be taken when we come to the clause to which it relates. Decisions on new clauses will be taken once we have completed consideration of the Bill’s existing clauses. Members wishing to press a grouped amendment or new clause to a Division should indicate when speaking to it that they wish to do so.
Clause 1
Meaning of “victim”
Sarah Champion (Rotherham) (Lab)
I beg to move amendment 2, in clause 1, page 1, line 16, at end insert—
“(e) where the person has experienced, or made allegations that they have experienced—
(i) sexual abuse, sexual harassment or sexual misconduct, or
(ii) bullying or harassment not falling within paragraph (i).”
This amendment would extend the definition of “victim” to include someone who has experienced, or made allegations that they have experienced, sexual abuse, sexual harassment or sexual misconduct, or other bullying or harassment.
The Chair
With this it will be convenient to discuss amendment 3, in clause 2, page 2, line 25, at end insert—
“(3A) The victims’ code must make provision in relation to people who have experienced, or made allegations that they have experienced—
(a) sexual abuse, sexual harassment or sexual misconduct, or
(b) bullying or harassment not falling within paragraph (a).
(3B) Provision under subsection (3A) must include—
(a) provision relating to the enforcement of non-disclosure agreements signed by such victims, and
(b) provision about legal advice and other support for such victims in cases where they are asked to sign, or have signed, a non-disclosure agreement.
(3C) In this section—
‘non-disclosure agreement’ means an agreement which purports to any extent to preclude a victim from—
(a) publishing information about a relevant complaint, or
(b) disclosing information about the relevant complaint to any one or more other persons;
‘misconduct’ means—
(a) sexual abuse, sexual harassment or sexual misconduct, and
(b) bullying or harassment not falling within paragraph (a); and
‘relevant complaint’ means a complaint relating to misconduct or alleged misconduct by any person.”
This amendment would require the victims’ code to include specific provision for people who have experienced, or made allegations that they have experienced, sexual abuse, sexual harassment or sexual misconduct, or other bullying or harassment.
Sarah Champion
I appreciate the opportunity to serve under your guidance once again, Sir Edward. I rise to speak in support of amendments 2 and 3, tabled by the hon. Member for Oxford West and Abingdon (Layla Moran). It is important that the Bill aims to improve end-to-end support for victims of crime and to amplify victims’ voices in the criminal justice system. The amendments focus on a widespread practice that disempowers victims and silences their voices: non-disclosure agreements. NDAs are contracts that were created to protect trade secrets, but when used incorrectly they become secret settlement contracts used to buy the silence of a victim or whistleblower. They have become the default solution for organisations, corporations and public bodies to settle cases of sexual misconduct, racism, pregnancy discrimination and other human rights violations.
In some cases, those in charge do not even realise that an NDA was used. NDAs have become boilerplate contractual language for so many organisations, and they are extremely harmful. They most often protect an employer’s reputation and the career of the perpetrator, not the victim, who could be protected by a simple one-sided confidentiality clause. They prevent a victim from speaking out and accessing the support they need by preventing them from reporting, speaking to family and friends about their experiences, or warning others. In one case of a university student who signed a gagging clause after she had been sexually assaulted, the agreement was so poorly explained that she took it to mean that she could not even speak to her own GP.
We have had this discussion many times before, specifically in relation to a different piece of legislation: the Higher Education (Freedom of Speech) Act 2023, an amendment to which, tabled by Lord Collins of Highbury, sought to restrict universities from using NDAs in cases of harassment and bullying. The Government accepted that amendment. I and many others who have campaigned on this issue were delighted that students gained that protection in the 2023 Act. If students should be protected from NDAs and gagging clauses, why would the same not apply to other victims? Amendments 2 and 3, tabled by the hon. Member for Oxford West and Abingdon, are intended to do ensure that it will.
Amendment 2 would expand the definition of a victim to expressly include victims of harassment, including sexual abuse, sexual harassment, sexual misconduct or other forms of bullying. Amendment 3 would then make provision in the victims code for those victims relating to non-disclosure agreements. The language of the amendments was drawn from the 2023 Act—language that the Government have already agreed to. As I said, the protection should not be limited to students; every victim deserves the right to speak out.
We have a golden opportunity with the Bill to enshrine in law the principle that no victim should be silenced, prevented from speaking out about their experiences and scared away from vital support services. There is support across the House for these changes—I refer to amendment 1, tabled by the right hon. Member for Basingstoke (Dame Maria Miller)—and I hope that the Minister will accept the amendments, seize the moment, take firm action and stamp out this practice once and for all.
Maria Eagle (Garston and Halewood) (Lab)
It is a pleasure to serve under your chairmanship today, Sir Edward. I hope the Minister will consider accepting these amendments. I can well see that he might have some concerns about what he may see as an open-ended extension of the definition of victims. I can see that, in the position he is in—deciding on policy—he may come to the view that a line has to be drawn somewhere when we define victims.
The Bill’s current definition does extend to a wide range of people, and there are other amendments and concerns that may extend that definition to an even wider range. As somebody who has been in the Minister’s position, making policy decisions about where a line ought to be drawn in the middle of a grey area, I understand that there is a natural tendency to resist. I hope he will resist that natural tendency in this particular instance, because my hon. Friend the Member for Rotherham has made a compelling case and the amendments are important.
One of the worst aspects of being subjected to this kind of behaviour is not being able to talk about it afterwards. One understands why an employer would like to obtain a non-disclosure agreement. As my hon. Friend the Member for Rotherham said, it has become a standard clause that anybody negotiating such a settlement on behalf of the employer would stick into every agreement in any instance; I imagine they are all drafted on computer systems ready to be simply splurged out at the drop of a hat. But the consequence for the individual who is signing up to the agreement—not always, as my hon. Friend has made clear, with the full information about what the legal implications are, and what they do and do not cover—can be extremely damaging, not only in the immediate aftermath of such an agreement, but possibly for years into the future.
Surely the Minister will accept, as I am sure you would, Sir Edward—although not in this Committee, of course—that the whole point of the victims code is to try to minimise the impact on victims by giving rights and access to provisions that enable them to recover swiftly from whatever it is that they have undergone that ends up causing them an issue. That is surely the very definition of what the victims code is meant to be doing. It would therefore be an omission if the amendments were not accepted.
Although I fully understand the concerns the Minister might have about extending the pool of people who may fall into the definition in the legislation, it would be remiss of the Government to exclude this particular group, who really do need such assistance. I hope that he will have something positive to say to us about these amendments when he gets to his feet.
Anna McMorrin (Cardiff North) (Lab)
I want to speak to these important amendments, which have been brought forward by my hon. Friend the Member for Rotherham. Amendment 1 gets to the heart of what the Bill is all about. It would ensure that there is no impediment to providing evidence of behaviour that may be criminal misconduct after signing a non-disclosure agreement.
We have all seen examples of these agreements. Some simply attempt to buy off the victim and halt any prospect of them using knowledge of a person or an organisation which may have been the perpetrator of any kind of criminal misconduct, ranging from financial impropriety to sexual assault. The agreements work by effectively threatening people that if they decide to share their experience or knowledge, they will be subject to costly sanctions.
I hope the Committee will agree that individuals or organisations trying to hide their criminality using non-disclosure agreements is not only wrong, but that it is also a licence to get away with all manner of activity that could lead to large fines and even imprisonment. Why should someone responsible for sexual assault be able to hide away? They should not be. Amendment 3, importantly, would ensure that that protection is enshrined in the victims code, which we will get to later. We want to ensure that there is no wriggle room to allow potential criminals to escape the law because of, in effect, an agreement that is designed to do just that.
Amendment 2 could also be said to sit at the heart of the Bill; we absolutely support the essence of the amendments. Amendment 2 would add to the clause the specific definition of a person who
“has experienced, or made allegations that they have experienced…sexual abuse, sexual harassment or sexual misconduct, or…bullying or harassment”.
We want to work constructively with the Government, and I hope that we can start now, with the Minister addressing the serious concerns that Committee members have raised, particularly my hon. Friend the Member for Rotherham who moved the amendment. We need amendments to significantly strengthen the Bill—which we finally have, eight years after it was first proposed.
The Minister of State, Ministry of Justice (Edward Argar)
It is a pleasure to serve under your chairmanship, Sir Edward. I am grateful to the hon. Member for Rotherham for raising this important topic and enabling the amendments tabled by the hon. Member for Oxford West and Abingdon (Layla Moran)—and, by extension, my right hon. Friend the Member for Basingstoke (Dame Maria Miller)—to be debated in Committee.
The amendments recognise that non-disclosure agreements are misused if they prevent someone from speaking about an experience of crime, for example, to relevant professionals. Amendment 1, though not selected for debate, is intended to include those who have signed NDAs that prevent them from speaking about criminal conduct in the definition of a victim. Amendment 2 and 3, which I will turn to shortly, are intended to go a little further—potentially beyond criminal conduct. I will address that point in a second.
Although confidentiality clauses can serve valid purposes—for example, to protect commercially sensitive information—the Government have been clear, as I think is the Opposition’s position, that they should not be used to prevent disclosures to the police, regulated health and care professionals, legal professionals and others. It is illegal for an NDA to be used to conceal a criminal offence, pervert the course of justice or stop someone co-operating with the police. As the hon. Member for Rotherham alluded to, we have already made reforms around the use of NDAs in higher education.
I know that the hon. Members who tabled, signed and spoke to the amendments are particularly interested in ensuring that individuals are aware of their ability to access support, regardless of having signed an NDA. Anybody who has suffered harm as a direct result of criminal conduct, regardless of whether that crime has been reported or is covered by an NDA, is already covered as a victim under part 1 of the Bill and the victims code. That means that they are entitled to access relevant support services, and, as the Law Society guidance on the matter makes clear, it would not normally be appropriate for non-disclosure agreements to prohibit disclosure to professionals for legal, medical or therapeutic reasons. In most circumstances, those qualified professionals would be bound by a duty of confidentiality to their client.
Maria Eagle
The Minister makes an excellent point, but how does he get across to those who have signed non-disclosure agreements that they are not restricted in the way in which the law requires that they be unrestricted if nobody has told them that? Could he do something to ensure that those who sign such agreements get proper information about what they really mean?
Edward Argar
I am grateful to the right hon. Lady. I do not want to test the Committee’s patience too much with the amount of notes that I have, but I will come to her point. I hope that I can give her a little succour in terms of her asks of me in her speech.
I reassure Members that if anybody suffers harm as a result of sexual abuse, bullying or harassment, where that behaviour amounts to criminal conduct it is already covered by the definition of a victim in part 1 of the Bill. Therefore amendment 1, which would include those individuals explicitly in the definition, could be deemed unnecessary, as they are already covered. However, I will turn to amendment 1 in my final remarks.
Amendments 2 and 3 seek to go further to include those who have experienced behaviour that may be covered by a non-disclosure agreement but which is not criminal. As the right hon. Member for Garston and Halewood alluded to, that would expand the definition. We are clear that we have to strike the appropriate balance in drawing the definition in a way that is practical and functional but that does not exclude those who we feel should be included. Part 1 of the Bill seeks to restrict the definition to victims of crime, and we believe that that is the right approach. However, I suspect we will debate on the coming amendments and over the course of today whether that balance has been struck and whether that line has been drawn in the right place. We may disagree on some elements; I expect we will explore that further today.
The relevant definition of a victim is focused on improving support services for victims of crime and increasing oversight to drive up standards of criminal justice agencies working with victims of crime. That does not mean that individuals who have suffered as a result of behaviour that is not criminal, albeit harmful, are prevented from seeking support. Outside the provisions in the Bill, they can still access support services where those are available to them.
Amendment 3 would require the victims code to include provisions for those who have experienced or made allegations that they have experienced sexual abuse, sexual harassment or sexual misconduct, or other bullying or harassment. It would also require the code to include provisions for those who have signed NDAs for those incidents.
It is vital that the victims code works for different types of victims. The code covers a wide range of entitlements for victims of different crimes and with different needs. To give us the broadest flexibility to serve the changing needs of victims without having to amend primary legislation, we have not explicitly listed entitlements or specific provisions for particular types of victims in the Bill, as the amendment would do. Instead, we have placed the overarching principles of the victims code in primary legislation and specified that the code can provide different entitlements for different types of victims.
We believe that is the right approach to allow the flexibility to amend the code and to reduce the risk of inadvertently excluding some groups of victims or the relevant provision that the code should make for them. The Bill as presently drafted means that the code could include provision about the matters referenced in the amendment, where they relate to victims of behaviour that amounts to criminal conduct. We have committed to consult on an updated victims code after the passage of the Bill. As mentioned on Second Reading, I am open to working with Members on whether we can go further in that respect.
I appreciate the points made by the right hon. Member for Garston and Halewood, by the shadow Minister the hon. Member for Cardiff North, and by the hon. Member for Rotherham and the sponsors of the amendments. Therefore, although I encourage the hon. Member for Rotherham not to press the amendments to a Division at the moment, I am happy to work with her and other hon. and right hon. Members, including those who support the amendments, to explore further before we reach Report stage whether there might be something we can do to help address their concerns.
As I say, I do not believe that amendments 2 and 3 as drafted are the right approach. I am looking carefully at the issues addressed by amendment 1. I am not in a position to make any firm commitments at this point, other than to work with the hon. Member for Rotherham and others to further explore this important issue. With that, I hope that she will consider not pressing this amendment to a Division.
Sarah Champion
I thank the Minister very much for his welcome words. I echo the point made by my right hon. Friend the Member for Garston and Halewood about the chilling effect of NDAs, and the lack of awareness of victims. That is at the nub of what we are trying to address.
I know there is a lot of interest in this issue across the House, so I will withdraw the amendment so that we can debate it on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Anna McMorrin
I beg to move amendment 10, in clause 1, page 1, line 16, at end insert—
“(e) where the person has experienced anti-social behaviour, as defined by section 2 of the Anti-social Behaviour Act 2014, and the conditions necessary for an ASB case review under section 104 of that Act have been met.”.
This amendment would include victims of anti-social behaviour in the definition of a victim.
As the Committee may be aware, our sessions in Committee will run over ASB Awareness Week, which is poignant. It is quite disappointing to be here today, fighting once again to have antisocial behaviour victims protected in the Bill.
Janet Daby (Lewisham East) (Lab)
Does my hon. Friend agree that victims of antisocial behaviour are indeed victims of crime and should be included in the victims code?
Anna McMorrin
My hon. Friend makes a very good point. The Government have repeatedly ignored advice on this, so I am here again to be a voice for the voiceless, who will remain voiceless if the Bill passes unamended.
Rachel Almeida, assistant director for knowledge and insight at Victim Support, told us last week that a huge number of victims are impacted by persistent antisocial behaviour. She said:
“We agree that there needs to be a threshold for it to be persistent ASB, but we believe that their not having any rights means they are unable to access the support that they really need.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 71, Q148.]
Ellie Reeves (Lewisham West and Penge) (Lab)
As constituency MPs, we all receive reports of antisocial behaviour. A constituent came to me because her neighbour regularly throws human waste out of the window. Can it really be right that she would not be considered a victim under the Bill?
Anna McMorrin
My hon. Friend is absolutely right. I do not think there is a Member here who does not have discussions with constituents, has not received casework about it, and has not seen antisocial behaviour when they are and about. This is a major issue that needs to be addressed, and the amendment would address it.
Antisocial behaviour can make victims’ lives a living nightmare, causing stress, misery and despair. It can often be the precursor to very serious crimes, including knife crime and gang activity, so it is important that it is taken seriously by the agencies that respond to it.
For example, if I had ordered a new outfit online and it was delivered to my house and left in the doorway, and someone pinched it, that would be a crime. It would be an unfortunate or upsetting incident, but it would have minimal impact on my wellbeing, because I could request a new outfit or get a refund. As a victim of that crime, I would be eligible for support services to help me cope and recover, regardless of whether I thought that was necessary. I would be eligible for all the rights under the victims code, including having my complaint recorded.
If I were a victim of antisocial behaviour, the situation would be entirely different. I might have people parked outside my home drinking, being disruptive, throwing cans into my garden, kicking a ball against my wall, and coming back night after night, swearing, spitting and being aggressive. I would feel persecuted in my own home and so targeted that I might become afraid of leaving the house. The longer it persisted, the more traumatised I would become. But as a victim of antisocial behaviour, I would have no access to victims’ rights and no guarantee of support. That disparity must end.
Dame Vera Baird KC, the former Victims’ Commissioner for England and Wales, told us last week that a key problem with the Bill is that it does not deal with people who suffer from serious antisocial behaviour.
Sir Oliver Heald (North East Hertfordshire) (Con)
Was not the point that Dame Vera was making that there are cases of antisocial behaviour that are criminal behaviour, but for some reason the police and others do not treat them as criminal matters? They say, “Well, that’s antisocial behaviour—a matter for the council.” Is this a question of amending the Bill, or is it about changing the attitudes of those who investigate these matters?
Anna McMorrin
I am just talking to the point that Dame Vera Baird made. We absolutely need that change, but we also need this amendment to ensure that things change for the victim and they can access those services.
Sir Oliver Heald
The clause refers to a person
“being subjected to criminal conduct”.
A lot of the things that the hon. Lady has mentioned—harassment, threatening behaviour and all those sorts of things—are criminal offences, it is just that they are not treated in the way they should be.
Anna McMorrin
They are not treated in the way they should be, but there is no system or support available for antisocial behaviour, yet if the amendment were agreed, there would be. As my hon. Friend the Member for Lewisham West and Penge just mentioned, the two things are not mutually exclusive.
Despite the fact that the behaviour is criminal—which is what Dame Vera Baird was referring to—it is not dealt with as criminal by the police. Instead, it is called antisocial behaviour. She said:
“I am particularly worried about people who are persecuted at home”,
as I have illustrated. She continued:
“It is not about every bit of antisocial behaviour—if someone chucks a can into my garden, I do not expect to have victims code rights—but this Government legislated well to introduce…the community trigger about seven years ago. It says that when it escalates to a particular level, you have a series of remedies to get all the agencies together to put it right. If it gets to that level, then it is seriously persecuting, and there are people who are suffering that.”
Dame Vera illustrated her evidence with the example of a woman sitting in her garden, minding her own business, when some lads who are sitting outside drinking beer throw a can into her garden. It is a relatively small incident—it is not particularly pleasant, but it is antisocial behaviour—but if she complains,
“they chuck something at her window. They stamp on her plants. They kick the ball against the gable end all the time. They shout abuse.”
They keep going and going, making the woman’s life a misery.
As Dame Vera said, often the person impacted is already vulnerable, and this intensifies that vulnerability and creates trauma. She continued:
“That is very worrying, but it is not treated as criminality; it is treated as antisocial behaviour. But if we look at it, stamping on the plants in her garden is criminal damage; chucking something at her, if it might hurt her, is an assault; much of this behaviour is likely to cause a breach of the peace, but it is never dealt with like that. Since the key to the Bill appears to be that you are a victim of criminal behaviour, the question is: who makes that decision?”
I hope the Minister addresses that in his response to the amendment.
Dame Vera continued:
“If I go to Victim Support and say, ‘Please help me. This is happening at home,’ does the fact that it is obvious that part of it is an assault make me a victim or not? I think that is a key question to answer in the Bill…If someone pinches a spade from my garden, I am entitled to my victims code rights, but if someone behaves like that to an older person, they have nothing.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 27-28, Q62.]
My constituent Sarah suffered a miscarriage due to the stress of being the victim of repeated antisocial behaviour on the part of her neighbour. Sarah should have been entitled to specialist support for what she went through, but she was not. She was not entitled to anything. Victims of antisocial behaviour are not second-class victims, second-class citizens or second-class anything, and they do not deserve to be treated as such.
The Anti-social Behaviour, Crime and Policing Act 2014 established a trigger of three reported incidents of antisocial behaviour over a six-month period, at which point the victim can seek a community resolution meeting of the responsible agencies to resolve what is by then persistent ASB. The Home Office’s guidance in support of the Act acknowledges
“the debilitating impact that persistent or repeated anti-social behaviour can have on its victims, and the cumulative impact if that behaviour persists over…time.”
It also explains that the community trigger is an important statutory safety net for victims of antisocial behaviour and that it helps to ensure that “victims’ voices are heard.”
The community trigger can be activated through notice to a local authority, a police and crime commissioner or the police when a victim or victims have reported antisocial behaviour incidents three or more times within a six-month period and no effective action has been taken. A councillor or Member of Parliament may also activate the trigger for a constituent, and I am sure that some hon. Members are supporting constituents in that way. The trigger is intended to be an opportunity for citizen empowerment—an important part of our democracy.
When the victims or victims have activated the trigger, all the agencies, such as the police, local authorities and housing associations, must come together to address the situation and fix the problem. However, despite the intention that the trigger should be a solution to a complex problem, it has not delivered the intended results. A report by the Victims’ Commissioner for England and Wales found that awareness of the trigger remains low among the public and that even some of the relevant agencies are not using it. Including the community trigger threshold in the definition of a victim, as amendment 10 intends, would help to rectify that problem, as well as providing much-needed support to these usually very vulnerable victims.
Some police and crime commissioners offer support to antisocial behaviour victims through discretionary funds, because they cannot do so from Ministry of Justice victim funds, but that is pot luck: some police and crime commissioners do not. That means that whether support services are provided for victims of ASB depends on where they live, which creates a concern that some victims who are suffering significant stress from persistent ASB do not get the emotional and practical support that they need to cope and recover. Victims of persistent ASB whose suffering has entitled them to activate the community trigger must be recognised as victims of crime in their own right, with all that that entails.
What is even more bewildering about the Government’s stance is that the previous Justice Secretary, the right hon. Member for Esher and Walton (Dominic Raab), said on 4 December 2021, as reported exclusively in The Times, that the Bill would give antisocial behaviour victims new rights and protections. He committed to putting victims of antisocial behaviour “on a par” with victims of crime. The article quoted a Ministry of Justice source, who said:
“It’s about recognising there is never a ‘victimless’ crime.
It’s about making sure people who aren’t directly part of the criminal justice process, where crime has wider implications, that there is an opportunity for that wider impact to be articulated in the process.”
Is this a U-turn, or will the Government support the amendment and bring forward the support that victims of ASB so desperately need? Why are those victims suddenly deemed unworthy of protection? For so many people across the country, the toll of being made to feel unsafe in their own home is unbearable. My constituent John came to me in despair after being passed from pillar to post by different authorities. John’s wife is disabled, and their home had been targeted repeatedly by a group that congregated outside on most nights. John and his wife were bereft, overwhelmed by anxiety and stress, and felt unsafe in their own home.
Antisocial behaviour is a national issue. It should not be a party political issue. We see it across constituencies and in all neighbourhoods. The amendment would simply include the Government’s own guidance on such incidents in the Bill, so that people like Sarah, and John and his wife, are not treated as second-class victims. I hope that the Minister will reflect on that and support the amendment.
Maria Eagle
I rise to support my hon. Friend the Member for Cardiff North in pressing the case for amendment 10, or at least seeking an explanation about why antisocial behaviour is not included in the clause, given the undertakings made by the Minister’s predecessors. I admit that there have been a few of them, and catching up can sometimes be a little difficult—institutional memory dissipates swiftly these days on the Government Benches.
I urge the Minister to take another look at this issue, because the essential point that has been made by Opposition Members is reflected in my constituency experience. Believe it or not, Sir Edward, it is 26 years since I was first elected, although it does not seem that long. Some of the most distressing constituency cases that I have ever had to deal with relate to antisocial behaviour, as it is somewhat underwhelmingly called.
When the former Victims’ Commissioner gave evidence to the Committee, she was correct in noting that some of the individual bits of behaviour that make up what we call antisocial behaviour are indeed crimes. She made reference to criminal damage, assault and battery, which are very familiar. Perhaps an individual incident would not be enough to meet the threshold that most of our police forces use these days for deciding whether to proceed against individual perpetrators, but as a course of behaviour over time, such incidents certainly add up to very serious crime. Over the years, I have had many instances in my constituency where that has undoubtedly been the case.
As my hon. Friend the Member for Cardiff North set out using examples from her constituency, the impact on victims is very serious indeed. It is certainly more serious than what some victims, who would fall within the definition in other instances, have experienced. Many of the people who perpetrate antisocial behaviour against their neighbours are lawless in other ways, and they are often on the radar of the police for other reasons. If they are not, they are frequently on the radar of other agencies, and the only way to deal with some of these people is to get everybody together to problem solve.
My concern is twofold. First, leaving those who are subject to antisocial behaviour out of the definition of “victim” suggests a hierarchy. Victims are often told by police and other agencies, “Oh, it’s below the threshold”; “We can’t do anything about it”; “It’s a civil matter”; or, “It’s just a neighbour dispute.” They are frequently told that, when it is nothing of the sort. If we leave victims of antisocial behaviour out of the definition of “victim” when so many others are included, it reinforces the idea that legislators are not taking seriously the consequences for victims of antisocial behaviour, as opposed to the consequences of other types of crime for which we are legislating to improve victims’ rights.
Janet Daby
My right hon. Friend is making a great speech. If somebody is afraid, fearful or worried, or does not want to return home because of that, surely they are a victim and should be part of the victims code.
Maria Eagle
I very much agree. I have had constituents come to me who are in the most dreadful state as a consequence of repeated instances of antisocial behaviour, sometimes over many years. Sometimes it can take years until they come and see me, and I then have to say to them, “These are difficult issues to resolve. I’m going to try this, and I’m going to try that,” but I cannot say to them, “I’m going to get all the agencies together and force them to do something.” I have to expectation manage myself when they come to see me, because one knows from experience that it is just not possible to promise to solve these issues.
Perpetrators are canny, and one of the things they do is complain to the police first. For the citizen who has never broken the law and would never dream of inflicting this kind of behaviour on their neighbours, going to the police is a last resort, but for some perpetrators, going to the police is a first resort so they can induce the impression among the police that it is a dispute between neighbours.
Tonia Antoniazzi (Gower) (Lab)
My right hon. Friend is making an excellent speech about the victim and the perpetrator’s actions. We see at first hand that there is no thought about the effect of the antisocial behaviour on the victim, who may be a veteran and may have post-traumatic stress disorder, so working across agencies is vital in supporting our constituents.
Maria Eagle
Indeed, and that is what usually happens. One of the cases that springs to my mind involves a veteran—I will not use the gentleman’s name—who for years has carried around a little rucksack with all the things he values in his life, including his service medals, so he can get away from the flat he lives in because he is worried about what the perpetrators might do. Although the issue has been going on for many years, I have not been able to deal with it to his or my satisfaction, even though some of the instances he has told me about have been quite awful. If he were to see that antisocial behaviour is not included in the Bill, and that it is seen as a lower level of crime—not even as crime—he would not be very impressed, quite frankly.
The right hon. and learned Member for North East Hertfordshire made the important point that the agencies are not doing their job, and I agree. It is like a hot potato: they say, “Oh, it is not for us,” and they send it to the police, who send it to the council, and nobody problem-solves. Obviously, the job of MPs is to try to knock a few heads together and get some problem solving going on to resolve an individual matter. We all do that, and in some instances we are successful, but with antisocial behaviour it is very difficult. The signal we are sending by leaving antisocial behaviour out of the definition of “victim” is that it is somehow below a threshold. The Bill will not encourage the agencies to up their game if they do not see that kind of behaviour in the definition of “victim”.
That is why I hope the Minister will have a think about the amendment. I know he will stand up and say, “Well, if it reaches the threshold of crime, it is included,” because he said that in respect of the previous two amendments. Of course, that is technically correct, but in the real world, where agencies are starved of resource and always have to ask, “Which issue should we deal with as a priority?” because they cannot deal with all of them, sending the signal that antisocial behaviour is not as important as something that comes above a different threshold and counts as crime means that it will be left out and these problems will not be solved. Our many constituents who suffer from serious antisocial behaviour—which does amount to crime, but try getting the police to handle it in that way—will be left feeling that they are second-class victims yet again. I do not think that is the intention behind the Bill and of legislating to put the overarching principles of the victims code into law. If the Minister cannot do something, that would be a regrettable omission. I hope he will give us some good news and say that he will implement the commitments made by his predecessors.
Siobhan Baillie (Stroud) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I am interested to hear what the Minister says in response, and I hope he will take on board what hon. Members said about the changes since the previous Lord Chancellor, who was quite outspoken about these issues, was in post. It is important to investigate whether the real issue is the implementation of the existing legislation and guidance, or whether it a lack of legislation, which we can fix here.
I have been sat here thinking about how slow and clunky this place is; it has taken so long to get to this Bill. I have had two children quicker than some Government projects have been completed. It takes forever. I have also been thinking about how creative antisocial behaviour has been getting recently, and about the TikTok videos showing youngsters storming into people’s houses, often with gangs of people. That would be a one-off incident, so presumably it would not reach the threshold of the community trigger, but it leaves a victim in its wake. I also understand—please correct me if I am wrong, Minister—that trespass is not criminal if someone storms into a house but it is pre-arranged. That it is very scary, but we possibly would not reach the threshold for the victims code.
I want to know that the Department is thinking through the rise of social media, the way that TikTok is being used and how gangs of people try to harass and attack people. If this legislation is a way to address this social media stuff, which the public are pretty outraged by, we need to think that through. I want to hear that the Department has gone through case studies and interrogated to see whether a change of legislation is appropriate, or whether the Department is still satisfied that what is available would deal with this latest nonsense, because this will not stop. There will be new ways of getting at people. People called Wizzy or Mizzy or something like that will try to get their ridiculous little videos, but there are victims in the wake of those videos, so I am interested to hear the Minister’s views.
Sarah Champion
I want to build on the points that have been made. I will start with those made by the right hon. and learned Member for North East Herefordshire—
Sarah Champion
We are off to a bad start now, aren’t we?
Some levels of antisocial behaviour are a crime, so they would immediately fall within the proposals, but many victims of antisocial behaviour are not covered by the victims code, which means that they do not have access to the support and information found in it. In particular, that means that they do not have the right to be referred to support services and that PCCs face spending restrictions on victims funding for antisocial behaviour support services as a consequence. The cumulative nature of what would be seen as low-level annoyances literally drive people insane, get them to move house and have them in a constant state of anxiety. In amendment 10, it is clear where that threshold is. On the points that my right hon. Friend the Member for Garston and Halewood made, that needs to be recognised in black and white so that the services, particularly the police, recognise the significance to people’s lives of antisocial behaviour and view it as something that ought to be covered under the victims code.
I also say to the Minister that this issue was raised a lot on Second Reading and was highlighted by witnesses. As my hon. Friend the Member for Cardiff North said, the former Victims’ Commissioner, Dame Vera Baird, called for this specific thing in an evidence session. To be specific, she emphasised the fact that
“this Government legislated well to introduce something called the community trigger”,
so that
“when it escalates to a particular level, you have a series of remedies to get all the agencies together to put it right.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 27, Q62.]
If the antisocial behaviour gets to that level—amendment 10 seeks to address this—those affected must be classed as victims under the legislation. I really think that the amendment would ensure that victims of persistent antisocial behaviour would be entitled to the rights as they are set out in the victims code and, hopefully, the victims Act, so I support the amendment.
Edward Argar
I am grateful to the hon. Member for Cardiff North for her amendment and for providing us with the opportunity to debate this issue. I suspect that we will return to it again, but this is a useful opportunity that allows us to get into more detail than is perhaps possible on Second Reading.
The amendment would include victims of antisocial behaviour in the definition of “victim” if they have suffered harm as a direct result of the conduct. As the hon. Lady sets out in the amendment, it would use the definitions in the Anti-social Behaviour, Crime and Policing Act 2014 and would therefore cover
“conduct that has caused, or is likely to cause, harassment, alarm or distress to any person…conduct capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises, or… conduct capable of causing housing-related nuisance or annoyance to any person.”
Therefore, that would also include non-criminal antisocial behaviour.
The Government agree with the hon. Lady that antisocial behaviour is a blight on our communities, and the impact on individuals cannot be overestimated. It is a national issue and it has a huge impact. Every Member of the House and of the Committee has probably dealt with casework on behalf of constituents relating to antisocial behaviour. As Dame Vera kindly acknowledged, that is why the Government took action on the community trigger, which helped to address the line between what is criminal conduct and what falls short of it.
Sarah Champion
I might have cut the Minister off too soon—he might be about to answer my question—but this is about the persistent level of low-grade behaviour, which would not reach the criminal threshold. It is like a dripping tap or a mosquito buzzing in the room; that is what really drives people into frustration.
Edward Argar
I was about to come to that point, so the hon. Lady’s intervention is prescient.
All of the speeches that we have heard have acknowledged that the behaviour that is being referred to is often criminal, even the low-level behaviour. The shadow Minister, the hon. Member for Cardiff North said that if something is thrown in the direction of an individual or if plants are trampled, that would be criminal behaviour. It may not be charged as such, but it would still entitle people to those rights under the code.
Dame Vera’s key point was about who decides what criminal behaviour is, how we ensure that people know that those rights are available to them and that the service providers acknowledge that those individuals are entitled to those rights. The behaviour we have heard about is included, but we do not believe that including it in the Bill in this way is the right approach to address the issue, to raise that awareness and to ensure that people can access the rights that are already there. However, I will turn to that in just a second. The right hon. Member for Garston and Halewood again managed to pre-empt an element of what she thought I would say in my speech, and she is not inaccurate in her presumption.
A point was raised about the previous Lord Chancellor, my right hon. Friend the Member for Esher and Walton. My only reflection on that is that, first of all, in my recollection—the right hon. Lady is right that this is going back a while—the articles cited an unnamed source and Government sources. We on both sides of the House have experience of how that can work. That is not official policy, but I will mention, on official policy, that that Lord Chancellor confirmed the content of the draft Bill and the full Bill, so it is not accurate to suggest a U-turn. It was the same Lord Chancellor who confirmed what we are debating today as what he wished to see in legislation.
My hon. Friend the Member for Stroud raised a number of points. We do not believe that a lack of legislation is the challenge here. We believe that there are key aspects, which the hon. Member for Cardiff North rightly highlighted, about raising awareness and the different public authorities and bodies engaging in a concerted manner to tackle the problem—treating it seriously and suchlike—but we do not believe that putting something in the Bill is the right way to raise awareness and to change those behaviours.
My hon. Friend raised some particularly distressing cases that have recently been on social media. I tread warily because I am not a lawyer—I am looking at one or two of the lawyers across the room—but she is right to say that trespass is a civil offence. I want to be careful, because I do not know the details of each of those incidents, but it is quite possible that a number of those incidents reported on social media may well have encompassed elements that were criminal in what was done. However, as a non-lawyer, I am cautious about saying that with any certainty, without knowing the details of the cases. Again, in those cases where there was an element of criminality, those individuals would be encompassed under the provisions for support under the victims code and in the legislation.
As Dame Vera alluded to, a significant number of individuals who have been harmed by antisocial behaviour are already defined as victims under the Bill. The definition as drafted covers a huge range of antisocial behaviour: where the behaviour itself is a criminal offence, such as criminal damage; where the behaviours, when taken together, constitute a criminal offence, such as harassment; or where a civil order has been breached, thereby incurring criminal penalties. In essence, where the antisocial behaviour amounts to criminal conduct, victims harmed by that behaviour can already benefit from measures in the Bill.
Jess Phillips (Birmingham, Yardley) (Lab)
I was going to intervene on the Minister earlier, when he kept saying that we should not put this in the Bill, to ask, “Why?” If it is already included, why not write the words down?
Edward Argar
First, we do not need to do this in the Bill—the points that the hon. Lady makes are essentially two sides of the same coin. I will turn to this in more detail, but we are seeking to be permissive in the breadth of the definition, rather than prescriptive by naming individual groups. Again, that risks causing the effect that she does not want: if we name A, B and C, does that create a hierarchy, and if we miss out D—as this place occasionally does—are we suddenly excluding something unintentionally? We have sought, by criminal conduct and victims of crime, to include as broad a definition as possible. A vast majority of individuals who are sadly victims of antisocial behaviour will be effectively victims of a crime.
The challenge, which I am happy to work with Members on both sides of the House on, is how we can ensure that we address Dame Vera’s key point—in my view, we would not do this on the face of the Bill—which is who decides and how we empower individuals to say, “Police may not have proceeded with it, but I know this is a criminal offence, so I wish to access these services and have a right to do so.” We need to address that key point. I am not sure if that is best done through legislation, but I am happy to work across the House to address that issue.
Anna McMorrin
The amendment seeks to include a clear community trigger that will set off victim support. That is very clear in the amendment, and it will allow those agencies, organisations and authorities to work together in support of people who are victims of repeated, consistent and persistent antisocial behaviour.
Edward Argar
I am grateful to the hon. Lady and I will address that point in my remaining remarks—I will give way again if she feels that I have not done so. In terms of those who suffer from persistent antisocial behaviour that does not amount to criminal conduct, we disagree that putting this in the Bill, rather than seeking other means to achieve an outcome for them, is the best approach. As I set out in my remarks on the previous group of amendments, we have deliberately defined victims in part 1 of the Bill to cover victims of crime. The measures have been designed to ensure that all the criminal justice agencies work together to engage and support those who are victims of crime. We also seek to strengthen the victims code.
A whole range of behaviours are included, and every speech has mentioned behaviours that contained elements of a crime that would therefore enable those individuals to get support. There are different agencies and procedures, as the hon. Member for Cardiff North said, for cases of antisocial behaviour that do not meet the criminal threshold or where there is no specific criminal offence involved. That means, for example, that victims of persistent antisocial behaviour can make a request for an antisocial behaviour review to any of the main agencies responsible, such as the council, police and housing providers.
That does not mean that individuals who have suffered as a result of harmful but not criminal antisocial behaviour are prevented from seeking support. Outside the Bill and the victims code, they can still access support services in their local area. Police and crime commissioners, as well as local authorities, can and do commission support for victims of all types of antisocial behaviour, and can help victims of all kinds of ASB, both criminal and non-criminal, to resolve their issues. Some of the funding they receive is rightly ringfenced for particular criteria and causes, but they do have a degree of overall discretion in their budget as to whether they wish to fund such services.
Anna McMorrin
As I set out in my speech, the police and crime commissioners decide in each area. If someone is a victim of antisocial behaviour, they are not guaranteed any support. Victims of persistent antisocial behaviour have no idea where to turn to access support because the authorities pass them from pillar to post. What the Minister is setting out does not happen; the amendment would ensure that it did.
Edward Argar
I am afraid I disagree with the shadow Minister’s last point. I do not think the amendment would address the operational or on-the-ground implementation issues that she highlights.
On the initial point the shadow Minister made, we have often debated in the House how to strike an appropriate balance in support services for victims of all crimes and of particular types of crime—how to ensure a tailored local support service that reflects the local community, while also ensuring a baseline of services, and a national response when a local community may not commission a particular service because the police and crime commissioner may have to make prioritisation decisions and the number of people likely to use that service in their locality may not be sufficient that they can afford to fund it. We always have this debate about the appropriate line between a national, consistent service, and local tailoring and local empowerment to police and crime commissioners, who are of course directly elected and accountable to their communities for the services they provide—notwithstanding turnout, as I think the shadow Minister indicated.
Sir Oliver Heald
Dame Vera was making the point that these matters are not being taken seriously enough, but there is an offence of harassment. That is repeated behaviour, and it can be antisocial behaviour or bullying. That was treated as a serious matter by Parliament—it is a summary offence—and there is also the more serious offence if fear of violence is involved, which has a maximum sentence of 10 years’ imprisonment. Is it perhaps time for the Minister to discuss with the Attorney General and the Home Office whether there is a need for more impetus to be put behind that provision, whether through guidelines or the prosecution college hub?
Edward Argar
I am grateful to my right hon. and learned Friend for his intervention. We are discussing these issues more broadly not only with the Attorney General but with the Home Secretary, given the cut-across and the importance that is rightly attached to these issues by those who send us to this place and by Members on both sides of the House. I reassure my right hon. and learned Friend that we are looking cross-Government at how we can make such responses more effective.
More broadly, the Government are taking clear action to crack down on antisocial behaviour and to build confidence that it will be taken seriously and, where appropriate, punished. Backed by £160 million of funding, our antisocial behaviour action plan, published in March this year, will give police and crime commissioners, local authorities and other agencies more tools to tackle the blight of antisocial behaviour across communities in England and Wales. That includes increasing policing in hotspot areas and a new immediate justice programme to make sure that offenders are made to undertake practical, reparative activity to make good the loss or damage sustained by victims, or to visibly support the local community in other ways, such as by litter picking. If things go wrong, the antisocial behaviour case review is there to ensure that those affected can seek a solution from the appropriate agency.
The Government will continue to take action for those who suffer as a result of persistent antisocial behaviour. The vast majority of examples given in evidence sessions and in today’s debates have, however, contained elements that would constitute criminal behaviour, which would therefore mean that the individuals were included in the rights under the victims code and the details that we are discussing in the context of the Bill.
We have sought to be less prescriptive and more permissive to make sure that we do not inadvertently tighten the definition too much. We do not share the view of the shadow Minister that adopting the amendment is the right way to address the point, but we do accept the points that Dame Vera and others made. There are two questions or challenges, which are not, in my view, best dealt with by legislation, but which do need to be addressed. First, who decides what is criminal? Secondly, how do we raise the awareness of authorities and individuals, so that people know their rights and that what has happened constitutes criminal behaviour, even if it is not prosecuted and even if there is no conviction? Therefore, those entitlements and rights are there.
Maria Eagle
That is one of the most important points. The victims are told that the police cannot do anything about it because it does not reach certain thresholds. When people understand that they may have rights that relate to being victims of crime, first, they will not have thought that they do—unless someone tells them—and secondly, they will ask the question, “If that is the case, how come the police aren’t doing something about the crime?” That is the conundrum. The Minister’s solution to the issue—not accepting the amendment—does not deal with it.
Edward Argar
The right hon. Lady makes two points. I suspect that in a number of cases the police will look at an offence and say, “We don’t think it meets the threshold for prosecution,” but that dextrous lawyers—we have some in Committee—could probably find a way to have it constitute a criminal offence and be prosecuted. Decisions on prosecutions, however, are made by the independent Crown Prosecution Service, based on the evidential threshold, the public interest and whether there is likely to be a conviction. I will not intervene or interfere in the CPS’s prosecution decisions.
Nevertheless, I am happy to work across the House to find a way to increase awareness. I do not believe that legislation and the amendment are the right approach, but there must be ways to increase awareness among victims that they are victims and among criminal justice agencies and others, so that they understand that, where a criminal offence has taken place, even if it is not prosecuted, individuals should be entitled to support.
Anna McMorrin
I thank the Minister for his response and everyone who has contributed to this important debate. I know that the number of people across the country who suffer from persistent antisocial behaviour—whether that is extreme or slight but persistent incidents which, as I illustrated in my speech, cause people to be locked in their homes and afraid to venture out to the shops, scared even to walk outside their front door—is hugely underestimated. This is a serious issue that must be addressed in the Bill. The amendment would do just that.
My right hon. Friend the Member for Garston and Halewood made excellent points about how the perpetrators of antisocial behaviour jump the gun. Many of them know the system and will make a report to the police in extreme circumstances and where the incidents are criminal, so the police are left not knowing whose side to be on, thinking it is a neighbourhood dispute or something that can be resolved. I, too, have tried to support such victims of antisocial behaviour in my constituency, and it is very difficult to get the agencies and authorities to understand that those people are victims. Including the amendment in the Bill will ensure that they are seen as victims and will have access to services that support them.
The hon. Member for Stroud made an important point about trespassing and storming into houses, which has seen a worrying rise among young people on social media such as TikTok. I know the Minister responded to that in his speech, but it would be good if he could look at the issue again. He said he was not able to address it here and now, but perhaps he could look into it and come back to the Committee—or write to us—on what the Department, the Government and he will be doing to address it.
All that goes back to the main point, the community trigger. With it, we need to ensure that services, the authorities and the criminal justice agencies work together to support the victim. That is what the amendment is intended to do. My hon. Friend the Member for Rotherham made the good point that the authorities need to know where they can step in, which they do not currently know. It should not be in every case for the victim to have to go to their MP, and for the MP to step in to bring the authorities together, as my hon. Friend stated. That is an impossibility for everybody out there. The Minister made the point that people can access lawyers; who in our communities has that knowledge and awareness, especially when they face that trauma? They may be vulnerable and may not have access to the finances to get legal advice.
Edward Argar
I fear the shadow Minister misunderstood what I was saying; I was referring to police and CPS lawyers, who will be able to find ways to prosecute some of these cases, I would hope—not to individuals.
Anna McMorrin
I thank the Minister, but the police and the criminal justice agencies just do not do that. They are stripped of resources. They do not have the ability to look into each case. If the community trigger is reached, support can kick in. Then at least those victims of antisocial behaviour know that they have something to lean on and some way of accessing support. That is why the amendment has been tabled, why I moved it today and why I spoke to it on Second Reading. It is particularly poignant that it will be Anti-Social Behaviour Awareness Week in just a couple of weeks. This is a really good opportunity for the Government to support the amendment, which is why I will press it to a vote.
Question put, That the amendment be made.
Anna McMorrin
I beg to move amendment 17, in clause 1, page 1, line 16, at end insert—
“(e) where the person has experienced child criminal exploitation;”.
This amendment would include victims of child criminal exploitation in the definition of a victim.
The Chair
With this it will be convenient to discuss the following:
Amendment 51, in clause 1, page 1, line 16, at end insert—
“(e) where the person has experienced adult sexual exploitation.”
Amendment 18, in clause 1, page 2, line 6, at end insert—
“(c) ‘child criminal exploitation’ means conduct by which a person manipulates, deceives, coerces or controls a person under 18 to undertake activity which constitutes a criminal offence;”.
This amendment provides a definition for the term “child criminal exploitation”.
Amendment 52, in clause 1, page 2, line 6, at end insert—
“(c) ‘adult sexual exploitation’ means conduct by which a person manipulates, deceives, coerces or controls another person to undertake sexual activity.”
This amendment would provide for a statutory definition of adult sexual exploitation.
Anna McMorrin
The Minister should not be surprised that we are debating child criminal exploitation once more; my hon. Friend the Member for Rotherham tabled a similar amendment to the Police, Crime, Sentencing and Courts Act 2022 just two years ago. Unfortunately, but unsurprisingly, the Government voted against that amendment, so two years on we still do not have a definition of child criminal exploitation in statute. Barnardo’s and the Children’s Society define child criminal exploitation as when
“another person or persons manipulate, deceive, coerce or control the person to undertake activity which constitutes a criminal offence where the person is under the age of 18.”
That is the definition that we would like to see on statute.
Child criminal exploitation takes a variety of forms, but ultimately it is the grooming and exploitation of children into criminal activity. The current reality is that, across each form that child criminal exploitation takes, children who are coerced into criminal activity are often treated as perpetrators by statutory agencies, rather than as victims of exploitation. That is partly because safeguarding partners work to different understandings of what constitutes criminal exploitation.
Recently, child criminal exploitation has become strongly associated with one specific model—county lines—but it can also include children being forced to work in cannabis factories, being coerced into moving drugs and money across the country, or being forced to commit financial fraud, to shoplift or to pickpocket. The lack of shared understanding of what child criminal exploitation is and the guises it can take means that the questions are not consistently asked when children are identified as being associated with criminal activity, either at the time of arrest or during court cases in which the possible coercion of a child has taken place.
Ellie Reeves
Throughout the country, children are being used by criminal gangs to do their bidding, and they are often subjected to the most sophisticated coercion, intimidation, duress, abuse and, sometimes, sexual abuse, so does my hon. Friend agree that it is indefensible not to have them listed as victims in the Bill?
Anna McMorrin
I absolutely agree with my hon. Friend. It is completely indefensible not to have the definition of child criminal exploitation in the Bill to make sure that, as she says, such children are seen as victims, not perpetrators.
The lack of shared understanding that I mentioned also means that children are often arrested for crimes that they are forced to commit, whereas the adults who exploit them are often not investigated or brought to justice, leaving them free to exploit other children, which happens. All this is because of the absence of a statutory definition of child criminal exploitation, the true scale of which is completely unknown. We know that it is happening all over the place—it is off the scale, essentially—but many children who are exploited or groomed fall through the cracks of statutory support so are not identified in official statistics.
In England in 2021-22, there were more than 16,000 instances of local authorities identifying child sexual exploitation as a factor at the end of an assessment by social workers; 11,600 instances of gangs being a factor; and 10,140 instances of child criminal exploitation being a factor. It has been estimated that in England alone there could be as many as 200,000 children aged 11 to 17 who are vulnerable to serious violence because of the levels of crime or income deprivation in their community.
Research carried out by Dame Rachel de Souza, the Children’s Commissioner for England, found that 27,000 children who were at high risk of gang exploitation had not been identified by services and as a result were missing out on vital support to keep them safe. The research also found an even higher number of children who were experiencing broader risk factors linked to exploitation, with one in 15 teenagers—or 120,00 young people—falling through the gaps in education and social care. These are children who are being excluded from school, who are persistently absent or who go missing from care, and many face a combination of factors that leave them vulnerable to exploitation.
In the evidence sessions last week, Dame Rachel de Souza spoke about the importance of including a statutory definition of child criminal exploitation in the Bill. When asked whether it should be in the Bill, she said “absolutely”, and that she had wanted to bring it up herself. She said:
“When I go around the country and talk to children, wherever they are—whether that is being held in police cells or children who are involved in drugs or whatever—I realise just how complex the situations are. You realise that these children are as much victim as perpetrator. Children tell me all the time that their experiences with the police make them feel like they are not victims but criminals. That is what we need to sort out.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 24, Q50.]
Jess Phillips
I think that, last year, four people were charged with child trafficking, and one person was convicted. I believe that last year also saw the highest rate of young boys being trafficked into the system and being recorded in the national referral mechanism. Although the number of victims has gone up over the past 10 years, the number of trafficking convictions has gone down.
Anna McMorrin
I thank my hon. Friend for absolutely illustrating the point.
I want to raise a real case of child exploitation. A 15-year-old boy, whom I will call Robbie—not his real name—was picked up with class A drugs in a trap house raid by the police. He was driven back home by police officers, who questioned him alone in the car and used that information to submit an entry to the national referral mechanism, which did not highlight his vulnerability but instead read like a crime report. Robbie subsequently went to court. His national referral mechanism failed, and his barrister, who did not understand the NRM process, advised him to plead guilty, which he did.
Janet Daby
My hon. Friend is making an excellent speech and speaking up for the rights of children. I am sure we all have cases where we know a child has been exploited and is vulnerable—by definition, a child is a vulnerable person. If a child is criminally exploited, it means that their vulnerability is increased. Does my hon. Friend agree that it makes no sense for them not to be included in the victims code?
Anna McMorrin
That is an excellent point. My hon. Friend has absolutely reinforced the point that such children must be included in the Bill as victims.
I move on to talk about Robbie’s experience—as I said, that is not his real name. In June 2019, he was referred to the Children’s Society’s disrupting exploitation programme. The programme helped Robbie challenge the national referral mechanism decision, and those supporting him attended court sessions with him to ensure that his vulnerability was outlined and that he was recognised as a victim, instead of an offender. That enabled him to retract his guilty plea and access vital support. However, that was just one case. He was lucky: he had the Children’s Society programme there to support him. We know that does not happen for the majority of child victims.
Jess Phillips
Is my hon. Friend aware that had Robbie arrived on a small boat and been trafficked out of a hotel and into a cannabis factory at the age of 10—Channel 4 has found such a case—he would not be entitled to any support from the NRM under the proposals of the Illegal Migration Bill, even though he would be a 10-year-old child who had been groomed into drug dealing?
Anna McMorrin
Absolutely. That illustrates yet more child criminal exploitation. The whole thing is just horrific and absurd, which is why this issue needs to be addressed.
Back to Robbie. As the drugs that he had been selling were confiscated by the police when he was picked up in the raid, there was debt bondage in Robbie’s case, as he now owed the groomer money for the drugs that had been lost. In turn, that resulted in threats to him and his family. The programme then worked with the police to complete intelligence forms and make sure that Robbie’s safety was paramount. It put markers on the home and made sure that the police were aware of the situation, so that they could respond quickly if anything happened. The programme supported Robbie to continue his education.
Amendments 17 and 18 are absolutely vital to make sure that we take the necessary steps to protect vulnerable children and to focus agencies’ attention on the adults who exploit them and are linked to the much, much more serious crimes that are taking place. Protecting children and bringing true criminals to justice—I do not see how anyone, least of all the Government, can object to such a notion. I will push the amendments to a vote later, but I hope the Minister will seek to include them in the Bill.
Sarah Champion
I start by apologising to the Committee. For each month that the Bill was delayed, I tabled another amendment, so I have quite a few today.
I will speak to amendments 51 and 52, which stand in my name, and then to those tabled by my hon. Friend the Member for Cardiff North. My amendments seek to provide a definition of adult sexual exploitation and are informed by my experiences of child sexual exploitation. I hope to make the argument that one very often blurs into the other, and the same arguments stand for both.
In 2009, the Department for Children, Schools and Families introduced a statutory definition of child sexual exploitation for the first time. I can honestly say that it has been transformational in ensuring that child abuse and exploitation are understood and that children receive the necessary support. We now need to accept in this Committee that adults can also be sexually exploited.
The STAGE group is supported by the National Lottery community fund and my hon. Friend the Member for Birmingham, Yardley. It is a fantastic group that highlights the nature and extent of the sexual exploitation of adult women across our communities and seeks to change legislation to give them better support. STAGE brings together a number of charities to provide trauma-informed support for women who have been groomed for sexual exploitation across the north-east and Yorkshire—including, in my constituency, the amazing organisation GROW, which I say to the Minister is severely underfunded at the moment.
Adult sexual exploitation is a specific form of sexual abuse. It occurs where an individual or group takes advantage of an imbalance of power to coerce, manipulate or deceive a person aged 18 or over into sexual activity, usually in exchange for something that the victim needs or wants—often drugs, alcohol or indeed love. It is also usually for the financial advantage or increased status of the perpetrator or facilitator. The victim may have been sexually exploited even if the sexual activity appears to be consensual. It can happen online as well, of course. The victims cannot give informed consent if they see no reasonable alternative to engaging in the activity, or if they have a reasonable belief that non-engagement would result in negative consequences for themselves or others.
Adult sexual exploitation does not always involve physical contact; it can also occur through the use of technology. My amendment 52 reflects the wording used in the statutory definition of child sexual exploitation, which the Government already use. The Government need to accept that not just children are exploited: many women—it is usually women—are exploited as adults, too. They are victims and deserve support, and that begins with ensuring that their abuse is recognised through a statutory definition of this form of sexual abuse.
One case study from the STAGE group is N, whom I will keep anonymous. N is a 22-year-old first-generation British Pakistani woman, who grew up in Leeds in a devout Muslim household. From a young age, N began experiencing sexual abuse from a male in her extended family. N began to spend more and more time outside of the family home; she could not talk to her family about the abuse because she did not want to be seen to bring shame into the household. During her time spent out of the house, N was introduced to a “friend”, whom I will call H.
H began to groom N, supplying her with drugs and alcohol to the point where she developed a dependency. He used her fear about shame as a form of control—to ensure that she did not speak out about the abuse he would subject her to. N was 15 at the time. Between the ages of 15 and 18, N was seen as a victim of child sexual exploitation. She was trafficked around Yorkshire by H, being picked up in taxis and taken to properties to be raped repeatedly. Professionals did all they could to safeguard N, but the abuse continued. N experienced a breakdown in her mental health due to the repeated trauma that she was experiencing, and she began drinking heavily on a daily basis.
When she was 18, the exploitation continued on a weekly, sometimes daily, basis. However, since she moved into adult services, the police and adult social care brought into question whether N was making “unwise choices” in respect of whether she was getting something out of these exchanges. So N was seen as a victim of child exploitation while she was 17—364 days—but the following day, when she turned 18, this victim of adult sexual exploitation was making “unwise choices”.
A lot of work from STAGE partner Basis Yorkshire was put in place, including advocating for N—although she was not a child any more, by law she was experiencing sexual exploitation. Over the past few years STAGE has lobbied health, police and social care services to ensure that N is recognised as a victim of grooming and exploitation. Although she might seem to “choose” to get into a taxi or to meet H or one of his associates, that is in fact a result of the coercion and control that takes place in grooming and exploitation. In legislation we recognise coercive control.
Jess Phillips
I should declare that I am chair of the STAGE group. Is my hon. Friend concerned, as I am, at the disparity when it comes to women who are British citizens? When sexual exploitation is considered as part of human trafficking, a foreign national is far, far more likely to be considered a victim than a British person. In many regards, British victims of sexual exploitation—adults and children—get lesser services.
Sarah Champion
Sadly, I am concerned and I absolutely agree. That is partly why we need a definition. The national referral mechanism was mentioned. By moving a person from one side of the street to the other they are trafficked, so they could fall under the national referral mechanism for modern slavery or just be prosecuted. But without a definition, services are not taking a joined-up approach and using the resources already in place.
The same arguments about choice and risky lifestyles in relation to adult victims of sexual exploitation were used in Rotherham. Having a definition would mean police forces being trained in what the definition means. Legal arguments would be put forward, and judges would receive training so that when they saw a young person in front of them they would understand that their behaviour was a symptom of being sexually exploited. There is a domino effect once a legal definition is in place. That is what happened with child sexual exploitation, so I hope that that will happen with adult sexual exploitation. I will come on to child criminal exploitation, but I have said to the Minister what needs to happen with adult sexual exploitation.
Manipulation by perpetrators, cultural expectations and family and community dynamics make it difficult for women to identify that they have experienced abuse. But sadly, sexual exploitation, as I have said, is not widely understood by professionals. It is vital that the Ministry of Justice use the Bill as an ideal opportunity to create a statutory definition of adult sexual exploitation to ensure a consistent understanding and recognition of the ways that sexual exploitation continues and presents itself in adulthood.
Amendments 51 and 52 would be a huge step in the right direction by recognising people who have experienced adult sexual exploitation as victims and entitling them to the crucial support available under the Bill. That must also come, of course, with support and funding for training to be given to police and justice staff to identify the signs of sexual exploitation.
I will now speak in support of amendments 17 and 18, which are about the definition of child criminal exploitation. The amendments would place a statutory definition of criminal child exploitation in law for the first time by ensuring that children who are being exploited are classed as victims under the Bill. Child criminal exploitation is the grooming and exploitation of children into criminal activity. There is a strong association with county lines, but it can also involve moving drugs, financial fraud and shoplifting on demand. That our laws catch up with our reality and realise the harm and damage that those criminals are causing children is long overdue. The true scale remains unknown, as many children fall through the cracks, but we have some evidence that indicates the scale of the abuse.
The former Children’s Commissioner estimated that 27,000 children are at high risk of gang exploitation. During 2020, 2,544 children were referred to the national referral mechanism due to concerns about child criminal exploitation, and 205 of those cases involved concerns about both criminal and sexual exploitation. The pandemic has only made the situation worse. Children in Need reported that during the pandemic children faced an increased risk of online grooming or exploitation due to time online, not being at school or college, and increased exposure to harmful online content such as inappropriately sexualised or hyper-violent content.
In the evidence sessions last week, the current Children’s Commissioner fully supported introducing a statutory definition of child criminal exploitation. She explained that the situations facing the children affected are very complex and that police make many feel like criminals rather than victims, as my Front-Bench colleague, my hon. Friend the Member for Cardiff North, highlighted.
It is clear that thousands of children are being criminally exploited every day and the response for those children must be immediate and properly resourced. Experts believe that a lack of understanding of child criminal exploitation prohibits an effective and joined-up response. The lack of a single definition means that local agencies respond differently to this form of exploitation across the country. The Children’s Society data shows that a third of local authorities had a policy in place to respond. That means that two thirds do not. Given the nature of this exploitation, a national shared understanding is imperative. That is what a definition would provide.
Let me for one moment contrast the situation with that of the response to child sexual exploitation, which I spoke to on a previous group of amendments. Police officers across the country say to me that, because the police and politicians understand CSE, the police get resources specifically to address CSE. That is great and I support that provision, but it takes away from the resources we need for CCE. They are treated as two separate issues, even though the same gangs often promote both forms of exploitation. They are using these children for criminal exploitation, whether that be sexual, drug running or shoplifting. Accepting the definition would mean that we see criminal exploitation of children and sexual exploitation of children just as “exploitation of children” and we can pool the resources and expertise to try to prevent this crime.
Many children who are criminally exploited receive punitive criminal justice responses, rather than being seen as victims. Again, I take colleagues back; that is what happened 25 or 15 years ago with child sexual exploitation victims.
Rob Butler (Aylesbury) (Con)
The hon. Lady is making some incredibly powerful points and I have sympathy with a lot of them, but on several occasions, she has mentioned circumstances that would constitute criminal conduct. For example, she talked about victim N, who was raped. Rape is clearly criminal conduct. Does she accept that children in that situation would be covered by the provisions in the Bill?
Secondly, she is making a point about how young offenders are dealt with. I am a former youth magistrate and member of the Youth Justice Board. Does she accept that the judiciary dealing with young people are now trained and encouraged to find out whether the defendants in front of them have been subject to this kind of exploitation, and that that is therefore considered in the way that they are dealt with?
Sarah Champion
I will deal with those points in reverse order. My first reaction is to question why they were in front of a magistrate in the first place. How have those children gone all the way through the system to be in front of a magistrate, rather than it having been recognised at a very early point that there is something going on with the child? Why is a 15-year-old repeatedly running drugs across county lines? What is happening? What is behind that? The professional curiosity is not there.
That leads me to the hon. Gentleman’s opening point. Of course, raping a child or raping an adult is a crime. We all recognise that. First, there are very low levels of reporting, and—as I hope I made clear with the adult sexual exploitation argument—a lot of people do not recognise it. They just think, “I’m a drug addict. He’s my dealer. I have to do this in order to get my drugs.”
First there is the reporting situation, and secondly there is recognition. In the case of N, she was seen as putting herself in a risky situation, so she would not be seen as a credible witness. We are not seeing the overall picture and the patterns of behaviour—the fact that the same children might be in the same location day after day—and then going back upstream to see what the motivator is and who is controlling the situation. I hope that having the definition of both terms will enable the police forces, the judicial services and the support services to see the broader picture and place the victim in that broader context. That is where I am coming from with both amendments.
Rob Butler
The hon. Lady posed a direct question to me. In terms of those young people coming before the youth courts, will she acknowledge that there is now a far greater use of diversion at the very early stage by the police and youth offending services, which means in fact that far fewer young people are coming to court? I was directly addressing the situation she raised about what happens when they are in front of that judicial process. In fact, there has been a huge amount of progress in trying not to bring children in front of magistrates or judges if it can possibly be avoided. Does the hon. Lady accept that there will be occasions when the level of offending is so great that society rightly demands that those people must face justice, at which point judges and magistrates can consider all the factors in determining what action to take?
Sarah Champion
I fully accept the hon. Gentleman’s points. There was no criticism implied, but I will give one example. In 2013 I worked with Barnardo’s, and we did an inquiry to see whether the justice system was fit for purpose for child sexual exploitation cases. Something that we found, which I alluded to, was that when a victim was in front of a judge as a witness, they were often seen as chaotic, aggressive and unreliable. We identified that if the judges had training on what a victim of child sexual exploitation presented like or as, it would make a difference. Indeed, it has made a dramatic difference now that that training has been rolled out.
If we got the definition of child criminal exploitation, a judge would automatically get training on the identifiers, so one would hope that the outcome would be more informed on the basis of having understanding of the young person in front of them, rather than just looking at the crimes. That is not to say that there will not be young people who are bad ’uns, who will use this and exploit what they see as a “get out of jail free” pass—I fully accept that could happen—but if the judge has a proper understanding of criminal exploitation, one would hope that they would then be able to challenge that a little more from an informed position and make the right decision for the young individual in front of them.
I have now covered quite a lot of my points—happy days! Another thing that really frustrates me is that many children who experience child criminal exploitation come to the attention of services once they are arrested for crimes. Again, if we had the definition in place and the awareness in the services, one would hope that the child presenting would be seen as a warning sign, rather than as a criminal. Individuals who exploit children for criminal activity are not being held to account. As my hon. Friend the Member for Cardiff North said, only 30 charges under the Modern Slavery Act 2015 were flagged as child abuse in 2019-2020, against the 22,000—I think that was the figure—recognised by the Children’s Society in the same period.
Organised crime groups are aware of this situation and they are deliberately targeting children, because they know that by putting them on the frontline, it is much less likely that they themselves will be in the dock. The Government rightly adopted the statutory definitions of domestic abuse, coercive control and child sexual abuse, so I urge the Minister to do the same for vulnerable children experiencing criminal exploitation; they are victims, just as children of CSE are victims.
I will end with an example. I imagine that two thirds of Members, if not more, get here each week by train. I set those Members a challenge: speak to a train conductor, and I guarantee that they will be able to give daily examples of child criminal exploitation. They see the children going backwards and forwards, often without tickets but often with tickets paid for by the gang leaders. On my train, staff say that now they do not even bother looking for the children, because the common denominator is the bag that they carry either the drugs or the money in. It is different children going up and down, up and down, up and down—so conductors look for the bag and then report it to British Transport police.
British Transport police is funded by the railways. The service has a small budget and there are very few officers, so the likelihood of one being there when that train arrives is slender. Organisations like Railway Children try to support those children, but I guarantee that if Members speak to the conductor on their train, they will say, “Yes, that is happening on my train.”
Lia Nici (Great Grimsby) (Con)
We are all very concerned about the example given by the hon. Lady. Why are the conductors and British Transport police not reporting those children to the police? That does not seem to be to do with the Bill; it seems to have something to do with what is happening in our criminal reporting processes.
Sarah Champion
Sadly, they are reporting it to the police, but the scale of the issue is so enormous and the resources are so intensive that nothing happens. I suggest the hon. Lady speak to her conductor. Normally what happens is that the child will be offered some support, but will then be very up front with the conductor, saying, “No, no—it’s my bag!” and so on. The child then gets off and there are not the resources to have a member of the British Transport police there, and that genuinely is not a criticism of them; I think there are only 4,000 officers for the whole country.
Sarah Champion
British Transport police are the specific police for incidents that happen on the railways and transport networks. Even if we were looking at the Metropolitan police—I am going back and forth to London—the scale of the issue is so enormous that there is not the capacity to deal with it.
Jess Phillips
As somebody who has called the police in those circumstances, we are talking about a nine-day wait for anyone to come out. That is a problem.
Sarah Champion
Minister, it seems a ridiculously simple act to accept these two definitions, but the cascading of support and recognition within the victims code and our justice system would be enormous as a consequence. I have seen that at first hand with child sexual exploitation. I urge the Minister to look seriously into the two definitions.
Ordered, That the debate be now adjourned.—(Fay Jones.)
Digital Markets, Competition and Consumers Bill (Ninth sitting)
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Public Bill CommitteesRead Full debate Digital Markets, Competition and Consumers Bill 2022-23 View all Digital Markets, Competition and Consumers Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 June 2023 - (27 Jun 2023)
The Chair
Before we begin, I remind Members to please switch electronic devices to silent. There is to be no food or drinks, except the water provided. Please send speaking notes to hansardnotes@parliament.uk.
Clause 91
Destroying or falsifying information
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 92 and 93 stand part.
Government amendment 34.
Clauses 94 to 96 stand part.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)
Let me cover the criminal offences in the regime, which largely mirror existing powers that the Competition and Markets Authority has in the Competition Act 1998. Criminal liability is important for deterring serious acts of misconduct in the context of information gathering and compliance monitoring, and will help to ensure that the digital markets unit can access relevant information.
Clause 91 makes it a criminal offence for an individual or firm to intentionally or recklessly destroy information, conceal information, provide false information, or cause or permit any of those actions. Those offences apply in relation to any of the powers provided for in chapter 6, which concerns information gathering and compliance reports.
Clause 92 makes it a criminal offence for a person to knowingly or recklessly give false or misleading information to the DMU in connection with any of its digital markets functions. It is also an offence for a person to knowingly or recklessly give false or misleading information to another person, knowing that it will be used by the DMU.
Clause 93 makes it a criminal offence for an individual to intentionally obstruct an officer of the DMU when lawfully entering a premises with or without a warrant.
Government amendment 34 seeks to clarify that named senior managers for information requests and nominated officers cannot be held criminally liable for not fulfilling their duties in those roles. As drafted, clause 94(2) broadens the definition of an officer of a body corporate. That would mean that individuals assigned to those roles could risk facing criminal proceedings on the basis of their assignment to the role. It has always been the policy intention that a named senior manager or nominated officer should face a civil penalty only where a firm with strategic market status has failed to comply with a relevant information request or compliance report and where the named individual failed, without reasonable excuse, to prevent that failure from occurring. The amendment would not prevent a senior manager or a nominated officer from facing criminal proceedings if they happen to also qualify as an officer of a body corporate under clause 94. I therefore hope that the Committee will support the amendment.
Clause 94 sets out that, in certain circumstances, where a body corporate commits a criminal offence, an officer of the body corporate can also be held criminally responsible. An officer of a body corporate can be, but is not limited to, a director, manager or secretary. An officer can be held criminally liable where the body corporate commits a criminal offence and the offence is attributable to that officer’s consent, connivance or neglect on their part. That will help to encourage officers in firms to take personal responsibility for their actions and will ensure that they are held accountable for any serious information offences.
Clause 95 limits the extraterritorial application of certain offences in the Bill, and I will set out our wider approach to extraterritoriality when we debate clause 110. Specifically, clause 95 states that a person cannot commit any of the part 1 criminal offences unless they have a UK connection, which is established when the person is a UK national, is habitually resident in the UK, or is a body incorporated under UK law. We have carefully considered the options and implications of restricting the extraterritorial application of criminal offences in this way. Although it is crucial that the CMA may apply its powers extraterritorially, they must be used only when strictly necessary and when a sufficient connection exists with the UK. In circumstances in which the person does not have a sufficient connection with the UK for the purpose of committing an offence, the CMA will still be able to enforce breaches of information requirements using civil penalties. That approach will ensure that, in exercising its powers, the CMA is respectful of the territorial jurisdiction of other nations.
Finally, clause 96 sets out the punishments that can be imposed by the relevant courts on conviction of a criminal offence under clauses 91 to 93. Any person found guilty of one of those offences is liable on summary conviction to a fine. In England and Wales, that will be of an unlimited amount, and in Scotland or Northern Ireland it will be up to the statutory maximum. On conviction on indictment, a person is liable to imprisonment for up to two years, a fine or both.
Alex Davies-Jones (Pontypridd) (Lab)
I welcome the clauses in this grouping that outline the criminal offences, as the Minister has explained. We welcome their inclusion for clarity, and we are also grateful that they broaden the scope of the Bill to include specific provisions, particularly in clause 94.
We support the clarity and intention of Government amendment 34. It is important that the term “officer” has its usual meaning in relation to offences committed by officers as well as bodies corporate. This is an important clarification and we are grateful to the Minister for tabling the amendment.
Question put and agreed to.
Clause 91 accordingly ordered to stand part of the Bill.
Clauses 92 and 93 ordered to stand part of the Bill.
Clause 94
Offences by officers of a body corporate etc
Amendment made: 34, in clause 94, page 56, line 14, leave out subsection (2).—(Paul Scully.)
This amendment removes a gloss on the definition of “officer” of a body corporate so that the term has its usual meaning in relation to offences committed by officers as well as bodies corporate.
Clause 94, as amended, ordered to stand part of the Bill.
Clauses 95 and 96 ordered to stand part of the Bill.
Clause 97
Director disqualification
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendments 35 and 36.
Clauses 98 to 101 stand part.
Paul Scully
I will now cover the remaining enforcement measures in the regime, and the appeals process. Clause 97 gives power to the DMU to apply to the court to disqualify a director of a UK-registered company that forms part of a firm with strategic market status, where that firm has breached the digital markets regime. That will allow the DMU to use the Company Directors Disqualification Act 1986, as the CMA does currently under the Competition Act 1998, when an SMS firm infringes the regime and the director’s conduct makes them unfit to be involved in the management of a company. That helps to protect UK businesses and the public from individuals who abuse their role and status as directors.
Government amendment 35 clarifies that costs relating to a court order under clause 98 can be made against any person that has breached the relevant requirement, whether or not they are an undertaking. The amendment changes the wording in subsection (3) to reflect the rest of the clause, which applies to persons—in practice, meaning a legal entity forming part of an SMS firm. I hope the Committee supports the amendment.
Government amendment 36 seeks to clarify in clause 98 that where a firm is responsible for the failure to comply with a relevant requirement, a costs order can be made against any officer of the relevant firm.
Clause 98 allows the DMU to apply for a court order where an SMS firm fails to comply with a regulatory requirement and, where relevant, a subsequent order or commitment intended to bring them back into compliance. A breach of a court order is a serious offence that can eventually lead to an unlimited fine and/or imprisonment for officers of the undertaking in question if it is not complied with. The threat of a court order is a key backstop for ensuring SMS firms comply with the regime.
Clause 99 makes explicit provision to allow parties to seek redress privately if they suffer harm or loss when an SMS firm breaches a requirement imposed by the DMU. Redress will be available when an SMS firm breaches a conduct requirement, pro-competition intervention or commitment to the DMU.
Clause 100 sets out that the CMA’s final breach decisions are binding on the courts and the Competition Appeal Tribunal to which redress claims can be made. The court or tribunal will only consider what a suitable remedy would be. That will encourage harmed parties to assist the DMU during investigations into suspected breaches of the regime.
Clauses 99 and 100 strike the right balance of ensuring there is a clear and effective route to redress, while ensuring that the regime’s focus is on public enforcement.
Clause 101 provides that decisions of the DMU, made in connection with its digital markets functions, can be appealed to the Competition Appeal Tribunal. When deciding these challenges, the CAT will apply judicial review principles. Valid grounds for appealing decisions of the DMU could include challenging whether it acted lawfully and within its powers, applied proper reasoning or followed due process, as well as, in some circumstances, whether the DMU’s decision was proportionate. That is with the exception of decisions relating to mergers, which will be brought under the existing process for merger appeals set out in the Enterprise Act 2002. That will ensure that there is a consistent appeals regime for all merger decisions.
Judicial review will allow for appropriate scrutiny of the DMU’s decisions in the digital markets regime, ensuring that the DMU is accountable for those decisions, that they are fairly and lawfully taken, and that the rights of businesses are protected. I am sure we all remember the oral evidence: the majority of people in front of us were clear that this was the right approach, and was proportionate.
Alex Davies-Jones
Clause 97 is important in that, as the Minister said, it enables the disqualification of a person from being a director as a consequence of their involvement in an infringement of a requirement relating to conduct requirements or pro-competition interventions. Labour sees that as an important step in ensuring that individuals who have not abided by the terms of this regime are not able to continue in their role. The clause specifically inserts new text into the Company Directors Disqualification Act which allows for these provisions. We welcome that this disqualification can be for up to 15 years—a significant yet fair period—and support the Government’s approach. We therefore support clause 97 in its entirety and think that it should stand part of the Bill. I am pleased to confirm that we also support Government amendments 35 and 36.
I will now move on to clauses 98 to 101. On clause 98, we particularly agree with the logical step set out in subsection (1). Its clarification means that, in the event of any initial breach of a conduct requirement that occurs before an enforcement order has been put in place or a commitment has been accepted, it cannot be enforced with a court order. We also agree with the intentions of subsection (3). Again, these are sensible approaches which we support. On the whole, we believe clause 98 to be an important step in establishing and rooting the CMA’s powers on a statutory footing. For that reason, we are happy to support it standing part of the Bill.
A fair regulatory regime must include provisions around seeking compensation, so we welcome clause 99. We particularly welcome subsection (2). We further welcome the clarity that subsection (4) affords. Again, these are simple clauses that we see as logical and sensible. We are happy to see their inclusion.
I now come to the most important clause in the Bill: clause 101. The Minister will be pleased to know that I have plenty to say on it. Subsections (8) to (10) provide that decisions of the CAT may be appealed to the appellate court for that jurisdiction. That is an incredibly important point and one which the Government must maintain. The DMU will ultimately have the power to make pro-competitive interventions to reduce SMS firms’ market power and to review more of their mergers. That means that they will be able to make significant changes to SMS firms’ business models with the objective of opening up their ecosystems and levelling the playing field for other businesses. The benefits of doing so are significant, and I am sure we will touch on them in sessions to come.
In the current version of this Bill, the standard of review that applies to DMU decisions is the judicial review standard generally used for authorities that make forward-looking assessments, rather than the “merits” standard used for certain competition law enforcement decisions by the CMA. That means that parties will be able to apply to the Competition Appeal Tribunal to review the legality of the DMU’s decisions, focusing on the principles of irrationality, illegality and procedural impropriety. That is an extremely important point and is consistent with other regimes, so the Government must not bow down to pressure here and adopt a “merits” appeals approach. As the Minister quite rightly said, we heard from countless witnesses during our oral evidence sessions who said the same.
We know that judicial review appeals are more streamlined than merits appeals and they can last a matter of days, rather than weeks, years or even decades. Under this Government, our courts are already facing significant backlogs—perhaps the less said about that the better—but there is no reason why we should subject this regime and the appeals principle to even further delay. We recognise the pressure that the Government are under here; clearly, potential SMS firms and their advocates oppose the adoption of the JR standard. It is obvious that a company that may be negatively impacted by this new regime would seek to obstruct or delay it by arguing for an appeals process that incorporates a consideration of the merits of the case.
However, Labour strongly believes that the current drafting is fair and well aligned with other regulatory regimes. For far too long, big tech has had the ear of this Government and has been able to force the hand of many of the Minister’s colleagues when it comes to online safety provisions. The Minister must reassure us that that will not be the case. I look forward to his confirmation.
Paul Scully
I appreciate the hon. Lady’s approach to the appeals standard, which she has taken in regard to the measures throughout the Bill. The Government speak to larger companies and smaller challenger companies, because it is really important that we get this right. I can assure the hon. Lady that there is no way we are going to weaken the appeals structure. We will always make sure that we listen and do things fairly. In no way will the structure be watered down such that challenger tech cannot come through. It is important we ensure that the Bill in its final form is the best it can be and is fair and proportionate.
Question put and agreed to.
Clause 97 accordingly ordered to stand part of the Bill.
Clause 98
Enforcement of requirements
Amendments made: 35, in clause 98, page 58, line 23, leave out “undertaking” and insert “person”.
The requirements to which clause 98 relates can apply to persons other than undertakings. This amendment clarifies that a costs order under this clause can be made against any person, whether or not they are an undertaking, who fails to comply with a requirement.
Amendment 36, in clause 98, page 58, line 25, leave out paragraph (b) and insert—
“(b) where the person responsible for the failure is an undertaking, any officer of a body corporate that is or is comprised in that undertaking.”—(Paul Scully.)
This amendment clarifies the circumstances in which a costs order under this clause can be made against an officer of a body corporate.
Clause 98, as amended, ordered to stand part of the Bill.
Clauses 99 to 101 ordered to stand part of the Bill.
Clause 102
Extension etc of periods
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 103 stand part.
Government amendment 37.
Clauses 104 to 109 stand part.
Government amendment 38.
Clauses 110 to 114 stand part.
Government amendment 39.
Clause 115 stand part.
New clause 4—Annual report on operation of CMA functions—
“(1) The Secretary of State must, at least once a year, produce a report on the operation of the CMA’s functions under Part 1 of this Act.
(2) Each report must include an assessment of the following matters—
(a) the outcomes of SMS investigations carried out by the CMA, with regard to the number of undertakings found—
(i) to have SMS, and
(ii) not to have SMS;
(b) the extent to which designated undertakings have fulfilled any conduct requirements imposed by the CMA; and
(c) the effectiveness of any pro-competition interventions made by the CMA.
(3) The first report must be published and laid before Parliament within one year of this Act being passed.”
This new clause requires the Secretary of State to produce an annual report on the operation of the CMA’s functions under Part 1. The report will be made publicly available and will be laid in Parliament.
Paul Scully
Clauses 102 to 115 deal with the administration of the regime and some technical matters. Clause 102 provides the DMU with the ability to extend investigations for strategic market status, conduct and pro-competition interventions, including the use of the final offer mechanism, for up to three months for special reasons. If a firm does not comply with information or interview requests, the deadlines can be extended until compliance is achieved. Clause 103 supports that measure by clarifying that special reasons extensions can be used once per investigation and specifying how total extension periods are calculated. Together, that provides clarity for firms on how investigations will be run and ensures that the implementation of extensions by the DMU is consistent.
Clause 104 sets out who will be permitted to take decisions in the new regime. It reserves the launch of strategic market status and pro-competition investigations to the CMA board, and further specified regulatory decisions to the board and one of its committees. The committee’s membership is constrained to provide a balance of independence and expertise.
Government amendment 37 amends clause 104 and requires that the continued application of existing obligations at the point of further designation, or transitional arrangements at the end of designation, are decisions reserved for the CMA board or its committees. That will ensure consistency across the introduction of obligations on firms.
Clause 105 sets out the manner in which a notice may be given to SMS firms or other relevant parties in relation to its functions under the digital markets regime. The provision is necessary to prevent parties frustrating investigations by claiming that they have not received a notice or that it has not been given to them in the proper way.
Clause 106 creates a statutory duty for the DMU to consult key regulators on significant proposed actions that engage their regulatory interests where it is relevant and proportionate to do so. Those regulators are the Information Commissioner, Financial Conduct Authority, Ofcom, Prudential Regulation Authority and the Bank of England. That ensures that the DMU can draw on expertise, avoid negatively impacting the interests of other regulators and prevent conflicting interventions.
Clause 107 creates a formal mechanism for the Financial Conduct Authority or Ofcom to make a recommendation to the CMA for it to exercise a significant digital markets function. That will ensure that the FCA and Ofcom, as concurrent competition regulators, have a clear and transparent process to refer cases to the DMU.
Clause 108 extends existing information-sharing provisions in part 9 of the Enterprise Act 2002. It ensures that information can be shared between the CMA and other relevant regulators to help them to carry out their statutory functions. The CMA will be able to disclose information to SMS firms or third parties to enable them to respond to allegations, seek legal advice or make appeals.
Alex Davies-Jones
Clause 102 is incredibly important if the CMA and, subsequently, the DMU are to be able to be an accountable body that consumers and businesses—and parliamentarians—have confidence in. This clause allows the CMA to extend various deadlines in part 1 of the Bill by up to three months where there are “special reasons” to do so. Those may include, for example, illness in the CMA investigation team. These are important provisions to ensure that the CMA is able to extend relevant investigations by up to three months.
We think it reasonable that the clause does not define the exact parameters of “special reasons”. We support a common-sense approach and therefore anticipate that those would include matters such as the illness or incapacity of members of an investigation team that has seriously impeded their work, and an unexpected event such as a merger of competitors. We further support the need for the CMA to publish a notice to trigger an extension under this clause. However, the Minister knows how important it is that these notices are made public, so I hope that he can clarify that that will be the case here.
It is right and proper that subsection (7) outlines the interaction between SMS investigations and active SMS designations. If the CMA is carrying out a further SMS investigation for a designated undertaking and needs to extend it, that investigation may not conclude until the original designation has expired, meaning the undertaking would fall outside the regime before the need for continued SMS designation is confirmed. The clause enables the SMS designation to be extended to match the length of the SMS investigation period and is a sensible approach that Labour supports.
We also welcome the provisions around clause 103, allowing the CMA to extend an SMS designation by up to three months. That speaks to the nature of an agile and flexible regime, which we ultimately all want and support. Government amendment 37 prevents decisions about whether and how to exercise the power in clause 17 being delegated to a member of the CMA’s board or a member of staff of the CMA. We consider that to be an appropriate response.
Clause 104 is crucial all round because it explains how decisions will be made under the digital markets regime and has practical applications in establishing exactly how the functions within the CMA will be able to operate when implementing the legislation. Notably, subsections (1) to (5) provide the CMA with the ability to create groups. The CMA must state the function for which such a group is established and the group will be required to fulfil that function. Can the Minister confirm where that information will be reported? Again, it will be helpful for us all to understand how that will work in practice.
We also value the clarifications outlined in the clause, which establish that to be eligible to carry out the functions under subsection (2A), a committee must include at least two CMA board members, which can include the chair. Furthermore, a majority of the committee’s membership must be non-staff or CMA panel members. We welcome the clarification that any changes of this nature would need to be laid before and approved by each House of Parliament before being enacted. Can the Minister confirm whether the Secretary of State will be required to be consulted under the provisions? That aside, we support the clause and believe it should stand part of the Bill.
We support clause 105 and welcome the clarification that a notice may be given to the particular individuals specified in subsections (3) to (5). This is an important clause that will allow the CMA to fulfil its obligations as the regulator. We also welcome clause 106, which outlines the requirements that will ensure the CMA has to consult specific named regulators, and welcome the clarity that those five regulators are the Bank of England, the Financial Conduct Authority, the Information Commissioner, the Prudential Regulation Authority and Ofcom. It is positive that they are outlined in the Bill. They are all established and relevant regulators that are subject to their own vast regulatory regimes, so Labour supports their involvement in assisting the CMA to regulate the regime proposed in the Bill. Again, we feel that subsection (6) is fair and reasonable. We particularly approve the fact that it is proportionate and we are happy to support it.
If clause 106 forces the CMA to consult the specific named regulators, it is only right that clause 107 sets out the formal mechanisms to be exercised under their regulatory digital markets function and that they are in the Bill too. We welcome the clarification on the timeframes, particularly around the fact that the CMA must respond to each relevant regulator within 90 days, setting out what action, if any, it has taken or will take and the reasons for that decision. It is important that those time periods are established in the Bill so as not to delay the CMA in taking action on a firm that is not operating in alignment with the regime.
For transparency purposes, we are also pleased to see the summaries of the CMA’s responses and that they must be published online. I am sure the Minister is pleased that that is included. We will come on to that matter as we address further clauses, particularly clause 112.
We welcome clause 108, which we see as a procedural clause that additionally extends current provisions to enable information sharing between the CMA and the Information Commissioner’s Office where that facilitates the exercising of one of their respective statutory functions, and we support the clause’s intentions. Information sharing must be encouraged between the agencies to allow for a regulatory regime to work in practice and be robust. It is right that the clause makes amendments to the Communications Act 2003 and the Enterprise Act 2002, which we see as vital for the regime to work in practice. We therefore support the clauses and believe they should stand part of the Bill as fully drafted.
Labour fully supports the provisions in the Bill to ensure the CMA has sufficient power to collect a levy from designated undertakings to recoup the costs associated with delivering the digital markets regime. We see that as a positive and effective way of encouraging compliance, but also an important way of generating funds to ensure the sustainability of the digital markets regime more widely. The polluter pays model is commonplace in a wide range of policy areas and it can be immensely effective. We therefore welcome the provisions in full. I do not need to address each subsection individually because the overall message is the same. SMS firms should absolutely pay a levy. For far too long they have got away with having considerable power and profit, and the time for them to have a statutory obligation to support measures such as those outlined in the Bill is well overdue.
We support the provisions in Government amendment 38, which we hope will go some way to assist should penalties have to be invoked by the CMA. The amendment permits notices to be served on people outside the UK if the CMA is considering imposing a penalty. Again, that is appropriate, and the Minister can be assured of our support. We feel that the provisions in clause 110 are fair and in alignment with similar regimes already in place, so we are happy to support it too. This is all becoming very collegiate.
Clause 111 protects the CMA against legal action for defamation as a result of its exercise of functions under the digital markets provisions in this part, and we support it entirely.
We welcome the provisions outlined in clause 112, which confirms the CMA’s duties to consult and publish statements online. As the Minister will be aware, any measures around transparency must factor in an element of consultation and transparency, so we welcome the clarifications that clause 112 affords. Colleagues will note that subsection (1) makes provision for when the CMA consults and publishes a statement. We think that it makes perfect sense. We are happy to support it, and wish to see that transparency echoed throughout the Bill.
Clause 113 is again welcome because it sets out the CMA’s obligation to publish guidance. It is important to have confirmation that the CMA will be able to revise or replace any guidance that it publishes, but must publish the revised or replacement guidance. While we recognise that that could include industry associations with a particular interest in the specific guidance in question, I would be grateful if the Minister would clarify whether others may be consulted in the instance of revised guidance being published? That aside, we support the intention behind clause 113 and believe that it should stand part of the Bill.
Clause 114 is particularly important. In the case of a large corporate group whereby a designated undertaking may be part of a wider body, it is important that that is defined within the Bill and interpreted when used throughout the Bill. Turning to Government amendment 39, we of course support the need to ensure that the definition of
“relevant service or digital content”
is consistent with the definition of “digital activity”, so we will support the amendment. We welcome clause 115 and do not disagree with any of the definitions outlined therein. We see them as fairly standard, as long as they are applied with common sense. We therefore fully support the clause.
Lastly, turning to new clause 4, we have already touched on this to some extent in previous debates. The aim of the new clause is clear: we want there to be more transparency over the function of the CMA’s regime. Particularly when it is in its infancy, the information will be extremely useful to businesses, civil society, academics and parliamentarians alike. It will also be important for other jurisdictions to have a meaningful way of understanding the regime, particularly if we want it to be world leading, when considering options for their own legislation.
I hear the Minister’s comments regarding replication of work and the need for the independence of the CMA, but it is right that Parliament has that scrutiny and overview. I would welcome his commitment to ensure that Parliament will have a mechanism by which to review the activity of the CMA via a regular report. If he could commit to me that that will be the case, we will not need to press the new clause to a vote.
Paul Scully
I thank the hon. Lady for her approach. Let me answer some of her questions. Notices will be made public, and information about the groups will be reported online. Under clause 104, the Secretary of State would not need to be consulted because, again, it is an independent regulator, so mandatory consultation with the Secretary of State is not necessarily appropriate. On clause 113 and who will be consulted on the revised guidance beyond industry, it will be relevant stakeholders, such as SMS firms themselves, other regulators such as Ofcom and the ICO, businesses likely to be affected by the decisions, and consumer groups. A wide-ranging consultation will be required to ensure that the regime works properly.
I think I can give the hon. Lady the assurance that she is looking for on new clause 4. It is really important that Parliament continues to be able to scrutinise the regime effectively. I do not think that it is appropriate to take the approach that the Secretary of State needs to do another form. It is less to do with duplication; it is more to do with the fact that if the Secretary of State is putting forward his or her own report, that might undermine the report that the CMA is doing. The CMA has an annual report, which it will publish at the end of each financial year. It will include a survey of developments relating to its functions, assessments of its performance against its objectives and enforcement activity, and a summary of key decisions and financial expenditure. That should be enough for Parliament to scrutinise that report and the work of the CMA and the DMU. I am happy to give that assurance that Parliament has that scrutiny and oversight.
The Chair
With this it will be convenient to discuss the following:
Clauses 117 to 121 stand part.
That schedule 3 be the Third schedule to the Bill.
Clauses 122 and 123 stand part.
Clauses 134 and 135 stand part.
Paul Scully
I hope my voice will stand up to this level of scrutiny. Part 2 of the Bill focuses on the UK’s existing competition regime. First, I will explain that while the CMA is the principal regulator responsible for the public enforcement of the prohibitions in part 1 of the Competition Act 1998, its functions are also exercisable concurrently by sector regulators, such as Ofgem and Ofcom, among others. The measures in clauses 116 to 120 and clause 135, and when we reach them clauses 136 and 137 and schedules 8, 9 and 11, affect the CMA and sector regulators. For the sake of brevity, I will just refer to the CMA.
Clause 116 extends the territorial reach of the chapter 1 prohibition in the Competition Act 1998. The prohibition relates to anti-competitive agreements, decisions by associations of undertakings or concerted practices, hereafter simply referred to as agreements. The chapter 1 prohibition captures agreements that have as their object or effect the prevention, restriction or distortion of competition within the UK, and which may affect trade within the UK. Currently, it is limited to agreements that are, or are intended to be, implemented within the UK. The extension in reach of the chapter 1 prohibition means that agreements implemented, or intended to be implemented, outside the UK are also captured, but only where they would be likely to have immediate, substantial and foreseeable effects on trade within the UK.
Clause 117 introduces a new duty to preserve documents on persons who know or suspect that an investigation is being, or is likely to be, carried out under the Competition Act 1998. The duty will apply from when a person knows or suspects that an investigation by the CMA is under way or likely to occur. Where a person has a reasonable excuse for not complying with the duty, no liability for a penalty will arise. A reasonable excuse could include something out of an individual’s control, such as an IT failure.
Clause 118 strengthens the CMA’s powers to require the production of electronic information stored remotely—for example, in the cloud—when executing warrants to enter business or domestic premises. Under this reform, the CMA will be able to require the production of information for the purposes of its investigation without needing to demonstrate when making the request the specific relevance of the particular dataset to be produced. It will then be able to take copies or extracts only of information that is relevant to the investigation. The CMA will also be able to operate equipment to produce remotely stored information itself. Clause 134 makes similar amendments to the CMA’s power to require the production of electronic information when executing a warrant during an investigation into a suspected criminal cartel offence under part 6 of the Enterprise Act 2002.
Clause 119 amends part 1 of schedule 1 to the Criminal Justice and Police Act 2001, to include the power of the CMA to undertake an inspection of domestic premises, under section 28A of the Competition Act 1998. That means that when the CMA undertakes an inspection of domestic premises, it will have access to the same seize and sift powers as are already available to it when it inspects business premises under a warrant.
Clause 135 also concerns the CMA’s investigative powers. First, it expands the CMA’s power to require persons to answer questions for the purposes of a Competition Act 1998 investigation, so that it applies regardless of whether the person has a connection to a business under investigation. The CMA will be able to require individuals to answer questions only where they have information that is relevant to an investigation. Secondly, the clause amends the CMA’s powers to require individuals to answer questions across its Enterprise Act 2002 markets and mergers and Competition Act 1998 functions, so that it can specify that interviews for those purposes should take place remotely.
Clause 120 amends the standard of review applied by the Competition Appeal Tribunal in appeals against interim measure decisions from full merits to judicial review. Interim measures are temporary directions that the CMA has the power to give during an investigation under the Competition Act 1998. To be an effective tool in fast-moving modern markets, it is essential that interim measures can be implemented efficiently. Judicial review will provide a flexible and proportionate standard of review, ensuring the CMA is held accountable appropriately for its decisions.
Clause 121 introduces schedule 3 to the Bill, which amends the Competition Act 1998 to empower the Competition Appeal Tribunal to grant declaratory relief in private actions claims under the Competition Act 1998. Declaratory relief is a remedy that involves a court making a legally binding statement on the application of the law to a set of facts.
Clause 122 gives the Competition Appeal Tribunal, the High Court of England and Wales, the Court of Session and sheriff courts in Scotland and the High Court in Northern Ireland the ability to award exemplary damages in private competition claims. This will help deter and punish particularly egregious conduct and ensure that those impacted by the most reckless breaches of competition law can be awarded additional damages.
Clause 123 amends section 71 of the Serious Organised Crime and Police Act 2005 to designate the CMA as a specified prosecutor. This designation will allow the CMA to enter into formal agreements with an offender who has assisted or offered to assist its criminal cartel offence investigations. For example, if it considered it appropriate, the CMA could agree not to use specified information against them in any criminal proceedings. Agreements to provide assistance can also be taken into account by the courts when sentencing an offender, or their sentence could be referred back to the court for review. These measures do not enable the CMA to offer immunity from prosecution.
Alex Davies-Jones
Part 2 focuses on the competition elements of the Bill. I am pleased to see clause 116, which expands the territorial reach of parts of the Competition Act 1998. Labour recognises the importance of ensuring that legislation already on the statute book is aligned with the intentions behind the Bill, because we understand that regulation of our digital markets will draw on existing competition law. We therefore welcome the clause, which will expand chapter 1 of the 1998 Act. The chapter 1 of the 1998 Act considers only undertakings and decisions that might affect trade within the UK, and which have as their object or effect the prevention, restriction or distortion of competition. At the moment, those behaviours are prohibited only where they are, or are intended to be, implemented in the United Kingdom, but we need to consider the impact of agreements, decisions and practices that might affect trade within the United Kingdom. Subsection (2) of the clause will replace the existing section of the 1998 Act to ensure that a consideration of the effect on trade will be considered. That is particularly important in the context of digital markets because they operate on a global level.
The clause goes some way to address the lack of futureproofing in the Bill more widely. The Minister knows my thoughts on that, and knows the Bill should go further in that regard. That aside, we welcome subsection (3), which will repeal the existing equivalent in the 1998 Act. The introduction of the qualified test will ensure that UK trade and businesses and consumers based in the United Kingdom, are protected from any detrimental effects of anti-competitive conduct, regardless of where that conduct takes place. That is welcome, and we consider the measure to strike a positive balance.
We welcome the clarity and the changes to the 1998 Act that will bring important provisions of the Bill into line with existing legislation. We have therefore not sought to amend the Bill, and we support those measures being part of it.
Clause 117 is important in that, once again, it will amend part 1 of the 1998 Act. We know that big companies can often be smart in concealing, or even overloading, information relevant to regulatory regimes, and we have seen that happen time and again when it comes to online safety. Labour does not want the same detrimental behaviours to be allowed to continue within this regime. We therefore welcome the provisions in the clause, particularly proposed new section 25B, which sets it out that the duty applies where
“a person knows or suspects that an investigation by the CMA… is… or is likely to be carried out.”
The inclusion of a person “suspecting” is important, and, in theory, it will push companies to abide by their duties. Recently, we have seen those at the heart of Government in the news owing to their failure to produce vital documents in investigations of the covid-19 pandemic, so it is very welcome indeed that the Government appear to have learned their lessons and worked to ensure that designated companies will not be able to circumvent the regime, as a former Prime Minister has attempted to do.
Let me get back to the Bill and the matters at hand. In practice, those duties will arise where a business receives a case initiation letter from the CMA, so it will be perfectly aware that its conduct is under investigation. Such duties might further arise when, for example, an individual working for a business is aware that a customer has reported their suspicions of price fixing, and that the customer has been interviewed by the CMA, or members of an anti-competitive agreement have been “tipped off” that a member of the agreement has blown the whistle to the CMA. Those are important clarifications, which we welcome. We therefore support their inclusion in the Bill.
We support clause 118, which specifically amends sections 28 and 28A of the 1998 Act, and we support the clarity with respect to the execution of such warrants—for example, a named CMA officer has the power to require the production of information that is held electronically and is accessible from the premises. It is a positive step to have these amendments to the 1998 Act, which will expand the powers of the court or the CAT to grant a warrant to the CMA based on the fact that there are reasonable grounds to suspect that there are documents relating to an investigation that are accessible from the premises, when the other criteria set out in the section are met. Those powers will apply to any information stored electronically, and we hope and expect that the provisions of the clause will rarely be used. Despite that, we fully support their inclusion. It is right and appropriate that businesses and other jurisdictions looking closely at the Bill have a sense of the process that will result in the event of the CMA being forced to act on a warrant. The clause and others in this part of the Bill are an important part of ensuring compliance, and we therefore welcome the provisions in full.
Clause 119 is, once again, an important clause that will amend existing legislation. The powers of seizure conferred by section 28 of the 1998 Act are already specified for the purposes of section 50 of the Criminal Justice and Police Act 2001, so the amendment will align the powers available to the CMA whether it is inspecting business or domestic premises under a warrant, and it will make consequential changes in the light of those made by clause 118. These practical clauses will make important changes to legislation to bring other provisions in line with the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 4 be the Fourth schedule to the Bill.
Clause 125 stand part.
That schedule 5 be the Fifth schedule to the Bill.
Clauses 126 to 128 stand part.
Paul Scully
Chapter 2 of part 2 upgrades and refines UK merger control to ensure it remains the best in class. Clause 124 and schedule 4 amend the thresholds for merger review to focus the UK’s merger regime on reviewing the transactions that have the potential to have the most marked impact on competition in UK markets.
The Bill makes three changes to those thresholds. First, it introduces a new acquirer-focused threshold, which gives the CMA clear jurisdiction over transactions in which a very large business with a UK turnover of more than £350 million, and at least a 33% share of supply, acquires another business. The new threshold will allow the CMA to review potentially harmful transactions—for example, a business with significant market power in one part of a supply chain acquiring a business in another and then being able to leverage its market power across that supply chain.
Secondly, the Bill increases the turnover test level from £70 million to £100 million. That adjustment limits merger review of cases that are less likely to be harmful, maintaining the balance intended when the UK’s merger regime was created. Thirdly, it introduces a safe harbour for transactions where all parties have a UK turnover of no more than £10 million. For the first time, therefore, small and micro enterprises merging with each other can be certain that they will not be captured by UK merger control.
Clause 125 and schedule 5 introduce a fast-track procedure to allow certain mergers to be expedited to an in-depth, or phase 2, investigation. That is intended to increase flexibility and deliver more efficient merger investigations. Now, when the CMA investigates a merger, initially it has to undertake a phase 1 investigation lasting up to 40 working days before it can refer the transaction for an in-depth phase 2 investigation. Merger parties, however, may be aware early in the process that their merger is likely to require an in-depth investigation by the CMA. In such cases, moving quickly to phase 2 will significantly speed up the overall process. Let me be clear: the fast track is not a suitable process for all mergers that the CMA reviews. However, in some cases, it will be a valuable tool to save time and resources for all involved, especially if parties request a fast track early on.
Clause 126 enables merger parties and the CMA to extend existing statutory time limits for merger reviews by mutual agreement where appropriate. The increased flexibility that that provides will ultimately help to resolve cases more effectively and, in some cases, more quickly. Clause 127 enables the CMA and merger parties to extend the time limits of merger review in public interest cases. Unlike in a normal merger review, however, the Secretary of State has an important role in decision making in public interest cases. This clause therefore sets up a key additional requirement for such cases: the CMA can only make or cancel an extension if the Secretary of State also consents. Clause 128 replaces the requirement for the CMA to publish the merger notice in the London Gazette, Edinburgh Gazette and Belfast Gazette with a requirement to do so online.
Alex Davies-Jones
Labour welcomes the provisions in the clause which establish that transactions within jurisdiction can be reviewed by the CMA, although no obligations or requirements are imposed on businesses by being in scope. Schedule 4 introduces the new acquirer-focused threshold, as well as introducing a small merger safe harbour that is primarily targeted at reducing the regulatory burden faced by small and micro businesses—the burden that we heard about in our evidence sessions. We support the clause standing part.
Schedule 4 makes several changes to the thresholds, which determine what transactions are within the jurisdiction of UK merger control. As I have noted already, the UK’s merger control regime is voluntary, meaning that there is never on obligation to notify a transaction to the CMA. However, when the existing jurisdictional thresholds in the Enterprise Act 2002 are met, the CMA may review a transaction even if it is not notified. The CMA has such jurisdiction if: the target’s UK turnover in its most recently completed financial year exceeded £70 million; or the parties have a combined share of supply of 25% or more in relation to any product or service in the UK or a substantial part of the UK. This schedule will clarify some significant changes to those thresholds, which Labour welcomes.
Schedule 4 introduces a new threshold that will grant the CMA jurisdiction to review transactions where one party has a UK share supply of at least 33% and UK turnover exceeding £350 million. We see the new threshold as largely capturing killer acquisitions, in which a larger firm acquires a smaller and possibly innovative firm, potentially with a view to eliminating the threat of future competition. The CMA’s existing 25% share-of-supply threshold has already shown itself to be flexible in capturing many such transactions, but it is estimated that the new threshold will lead to an increase of between two and five phase 1 cases per year. That is to be applauded.
The new £350 million threshold is aimed at expanding the CMA’s jurisdiction, but other sections of schedule 4 seek to reduce the burden on merging companies by removing certain transactions from the CMA’s jurisdiction. By increasing the target turnover threshold from £70 million to £100 million, it is estimated that the changes to the turnover test will lead to a reduction of two or three phase 1 cases per year. In addition, the Government have proposed an interesting solution with the introduction of a safe harbour threshold to the existing share-of-supply test where, even if the 25% share of supply threshold is met, the CMA would not have jurisdiction if no party to the transaction had more than £10 million of UK turnover.
Labour recognises that it would be inappropriate to burden the CMA unnecessarily, but we are keen to have an understanding of how schedule 4 will operate in practice. Has the Minister considered introducing an annual reporting mechanism that would allow for more transparency on whether the approach is working? That aside, we certainly and carefully support the intentions of this schedule.
We welcome the provisions of clause 125 and are pleased to see that particular attention has been given to merger situations. Labour recognises that designated companies often buy other companies or merge with them, so it is only right that the CMA is empowered with the appropriate tools to investigate in such circumstances, where necessary. As we know, at present the UK’s merger control regime is voluntary, meaning that there is never an obligation to notify the CMA of a transaction. However, as I have said, when the thresholds in the Enterprise Act are met, the CMA may review a transaction despite not having being notified of it.
Clause 125 is relevant because it amends part 3 of the Enterprise Act to enable the CMA to fast-track a merger to an in-depth phase 2 investigation if it receives a request from the parties involved to do so. That is an important step in streamlining merger review procedures and timelines by removing certain statutory duties on the CMA that currently limit the benefits and use of the existing, non-statutory fast-track procedures. This fast-track process gives the CMA more flexibility to deliver quicker and more efficient merger investigations without prejudicing the quality of the review. We welcome the clarifications in clause 125 and support its standing part of the Bill.
We welcome schedule 5, which amends the Enterprise Act to enable the CMA to fast-track these mergers. In particular, we support the clarification that the CMA may launch a phase 2 investigation only if it believes that a completed or anticipated merger has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom. We also support the clarification of the circumstances in which the CMA can accept a fast-track reference request.
When making these decisions, the CMA must have regard to whether the merger could raise public interest issues or whether a special public interest intervention has been launched under provisions in the Enterprise Act, to ensure that no case is unduly fast-tracked. Schedule 5 is important and will be central to ensuring the CMA can work at pace in the case of any merger requiring investigation. We welcome and support it.
Labour fully supports the intentions of clause 126. The timetable for phase 2 investigations is important for the timely resolution of merger investigations, and we believe the approach outlined to be sensible. As it stands, section 39 of the Enterprise Act, which outlines time limits, requires the CMA to publish its report on a merger reference within 24 weeks of the date of the reference. Clause 126(2) amends that provision to give the CMA the power to extend the period if necessary. We welcome the clarity that the length of an extension has to be agreed between the CMA and parties involved in the potential merger.
We also acknowledge that, while the Bill does not specify circumstances in which the CMA and the parties involved in a merger can agree an extension, an extension is most likely to be helpful in support of early consideration of remedies or in multi-jurisdictional mergers that are being reviewed in other countries in parallel to the UK. We welcome that distinction. Labour has consistently said that for the regime to work in practice it must be flexible. We see clause 126 as an important step towards that aim and are therefore happy to support its inclusion in the Bill.
As I said with respect to clause 126, Labour supports flexibility to extend time limits, and we feel that is particularly important where there is a public interest to do so. That is why we support clause 127. The clause amends chapter 2 of part 3 of the Enterprise Act, which sets out that the Secretary of State may intervene in the consideration of a merger where the Secretary of State believes it raises a public interest consideration that needs to be taken into account. We feel that this is an appropriate and proportionate way of ensuring accountability for public interest interventions, and that the Secretary of State should be empowered to do so. We therefore support the intentions of clause 127 and, again, believe that it should stand part of the Bill.
Finally, clause 128 replaces the obligation on the CMA in section 96(5) of the Enterprise Act to publish the latest form of the merger notice
“in the London, Edinburgh and Belfast Gazettes”
with an obligation to publish it online. We welcome that transparency. The Minister knows my views on transparency with respect to the Bill more widely. I wish that provision about online publication was replicated elsewhere in the Bill, so that information is available to anyone who wishes to see it. We welcome clause 128 and hope to see it replicated.
Paul Scully
Indeed, a lot of the publication is done online, as we have discussed, even if that is not stated specifically in the Bill. I hope the hon. Lady takes heart in that.
The hon. Lady asked specifically about schedule 4 and safe harbours. Clearly, we would expect the CMA and the Government to review the merger review thresholds regularly, and there are powers to amend the thresholds if and when it is considered appropriate to reflect economic developments or, indeed, because of the experience of enforcing the thresholds, as she rightly said. The CMA board is accountable to Parliament, as we have described. We expect that, through its annual plan and performance reports, Parliament will be able to scrutinise the decisions that have been taken.
Question put and agreed to.
Clause 124 accordingly ordered to stand part of the Bill.
Schedule 4 agreed to.
Clause 125 ordered to stand part of the Bill.
Schedule 5 agreed to.
Clauses 126 to 128 ordered to stand part of the Bill.
Clause 129
Market studies: removal of time-limit on pre-reference consultation
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 130 and 131 stand part.
That schedule 6 be the Sixth schedule to the Bill.
Clause 132 stand part.
That schedule 7 be the Seventh schedule to the Bill.
Clause 133 stand part.
Paul Scully
The UK’s markets regime is the CMA’s most powerful tool for promoting competition in UK markets. Clauses 129 to 133 reform the markets regime, ensuring that it is effective, focused and proportionate.
Clause 129 reforms the market study process. Currently, the CMA or sector regulator must start a consultation on making a market investigation reference, or decide not to make a reference, within six months of the start of a market study. That timeframe is unduly restrictive. The clause removes the six-month time limit, giving flexibility for the consultation to start at the most appropriate point. It allows extra time to gather evidence, ensuring that information that comes to light later on can be considered.
Clause 130 makes amendments so that references can be targeted appropriately, to better define the scope of the investigation required. It further narrows the questions that the CMA group must consider, reflecting the scope set out in the reference. This will allow the CMA to ensure that its work is targeted effectively, which will benefit businesses and investors.
Clause 131 introduces schedule 6, which expands the use of voluntary undertakings that remedy competition harms. The clause allows the CMA to accept such undertakings at any stage in the market inquiries process. This includes the acceptance of partial undertakings that address some features causing concerns in a market, but not all. The flexibility to take issues “off the table” by accepting such undertakings, alongside the amendments made by clause 132 regarding narrowing the scope of investigations, will help to provide greater flexibility in the regime. We recognise that voluntary undertakings will not be appropriate in every case. Where they are appropriate, they will drive efficiencies and enable faster results. They will also help to tackle competition problems and any resulting consumer harm as quickly as possible.
Clause 132 introduces schedule 7, which gives new powers to the CMA to conduct trials of certain types of remedies at the conclusion of a market investigation where an adverse effect on competition has been identified. That will help to ensure that any final remedy is suitable and effective. For now, the power to trial remedies will be limited to solutions that relate to the provision or publication of information to consumers. That is the area where trials are most likely to be useful and enables a proportionate approach to introducing this new power. The Secretary of State will be able to expand the scope of remedies to trial in future, subject to the draft affirmative procedure.
Clause 133 gives the CMA new powers to amend ineffective remedies where less than 10 years has passed since the original market investigation. Where the CMA decides that remedies have been ineffective and should be varied, it will be required to consult with affected businesses before reaching a final decision on whether to vary a remedy, and to conclude the variation within six months. In cases where the Secretary of State has accepted or imposed remedies, the CMA will provide advice to the Secretary of State. This new power will be constrained by a mandatory two-year cooling-off period, beginning at the end of a remedy review.
Alex Davies-Jones
I will speak briefly to clause 129 before addressing our thoughts on the rest of the group. Labour supports the intentions of the measures in the group, and we have not sought to amend them at this stage.
The removal of the time restriction outlined in clause 129 gives the CMA flexibility and more time to gather evidence to determine when the consultation process should commence. That is something I think we can all get behind and fully support.
Schedule 6 outlines the process by which the CMA will be able to accept voluntary commitments during all stages of a market study and a market investigation. It allows the CMA to accept partial undertakings, to narrow the issues that require further investigation. We see these features as central to a flexible regime that firms want to easily engage with. That must be at the heart of any fully functioning and appropriate regime.
Clause 132 and schedule 7, which are incredibly welcome, provide that the CMA may be required by the Secretary of State to conduct trials of remedies before setting a final remedy package. We recognise that since this is a new regime, the regulator may benefit from such trial remedies, and it is important that the CMA has the legislative teeth and support to do so.
We therefore support the measures in the group. We have not sought to amend them, and we believe that they should stand part of the Bill.
Question put and agreed to.
Clause 129 accordingly ordered to stand part of the Bill.
Clauses 130 and 131 ordered to stand part of the Bill.
Schedule 6 agreed to.
Clause 132 ordered to stand part of the Bill.
Schedule 7 agreed to.
Clauses 133 to 135 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Energy Bill [ Lords ] (Sixteenth sitting)
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Public Bill CommitteesRead Full debate Energy Act 2023 View all Energy Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 June 2023 - (27 Jun 2023)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, I remind Members that Hansard colleagues would be grateful if any speaking notes could be emailed to hansardnotes@parliament.uk. Please put electronic devices on silent, and tea and coffee are not allowed during sittings. The only refreshment permitted is water, which is available in the room. I might review my view on whether gentlemen can remove their jackets if it warms up later in the day.
New Clause 1
Smart meter roll-out for prepayment customers
“(1) The Secretary of State must ensure that all legacy prepayment meters are replaced with smart meters, unless the customer objects in writing, before the end of 2025.
(2) The Secretary of State must by regulations provide for an end to the practice of self-disconnections, such regulations to come into force within six months of the date on which this Act is passed.
(3) Regulations under subsection (2) may provide for, but are not limited to—
(a) the introduction of a social tariff for prepayment customers,
(b) the introduction of mechanisms to apply credit automatically if a prepayment customer runs out of credit, and
(c) the introduction of a mechanism to transfer a prepayment customer to credit mode automatically if they run out of credit.” —(Alan Brown.)
Alan Brown (Kilmarnock and Loudoun) (SNP)
I beg to move, That the clause be read a Second time.
Alan Brown
It is a pleasure to serve under your chairmanship, Ms Nokes.
We are now in the final week of this Bill Committee, and Members will have spotted that a lot of Government new clauses and amendments have been tabled and accepted. In the spirt of fairness, the Government should also accept some of our new clauses and amendments; hopefully that is what is going to happen. Rather than getting into a debate, if the Minister wants to intervene and tell me which new clauses the Government will accept in the spirit of fairness, I would be happy to give way.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)
I would not like to put you off.
Alan Brown
Okay, so we go back to my monologue justifying why the Government should accept some of our new clauses, including new clauses 1 and 2.
Clearly, we should be grateful that energy prices are starting to fall, but the reality is that the cap on energy bills for an average household was set at £1,138 in April 2021. This month, Ofgem has set the cap at more than £2,000, so energy bills are still nearly double what they were two years ago. The reality is that many people are struggling badly with their energy bills, even though prices are falling, and those struggling the most are those with prepayment meters. People with prepayment meters can access credit of only £5 or £10. If they reach that credit limit, the lights go out—it is as simple as that. They cannot turn on the gas or electricity, and it is a real difficulty for people. It also means that if people cannot get out of the house for whatever reason—if they are ill or have just had a newborn kid—and have reached the threshold, they lose access to their energy by virtue of not being able to top up their meters.
It is unfair that people with prepayment meters pay higher standing charges. Frankly, it is an outrage that people who pay in advance for their energy are paying a premium to access it, whereas people like us in this room, who pay by direct debit, have access to credit and cheaper tariffs. As I say, the reality is that if someone is on a prepayment meter, they are going to struggle to pay their bills, they will pay more and they will face the difficulties associated with a lack of credit.
As End Fuel Poverty states:
“Imposition of a pre-payment meter is disconnection by the back door. When you can’t top up the meter everything clicks off”.
Forcing people to have prepayment meters means that those who are already struggling are put on to a system whereby they will be forced to ration, automatically disconnected when the credit limit is reached and more likely—this is the rub—to have a cold, damp home, with the long-term health implications that that brings, as well as the short-term heating and eating dilemmas.
It is estimated that 19% of housing stock across the UK is damp. The proportion rises to nearly a third, or 31%, for those on prepayment meters. In other words, if someone is on a prepayment meter, they are 65% more likely than the average person to live in a damp house. Some 51% of prepayment customers have health conditions or disabilities, so in many ways the existing system is punishing those who are more likely to require more energy in the first place. That, in a nutshell, is why a social tariff is needed for those with prepayment meters.
Research by Utilita indicated previously that as many as 14% of the 4.5 million households with prepayment meters did not choose to be on such tariffs, and what has been happening during the cost of living crisis is outrageous. For example, an investigation for the i paper revealed that since the end of lockdown energy firms have secured almost 500,000 court warrants to forcibly install meters in the homes of customers who are in debt. Freedom of information requests showed that in the first six months of last year there were 180,000 applications for such warrants.
We then had the bombshell coverage of an undercover reporter working for bailiffs, which exposed the cruelty of some bailiffs for what it was: revelling in the forced installation of prepayment meters, no matter the vulnerabilities of the customers. The officers of that debt company were working on behalf of British Gas, which of course said that it was shocked and that it did not advocate such a policy.
The rub is that some utility companies are using debt collection agencies routinely as part of their process to collect money that they believe they are owed. That set-up relieves utility companies of the burden of debt collection. More importantly, it stops them providing debt advocacy and interacting with customers, which is what is required. Meanwhile, the debt collection companies add their own fees just for reissuing bills to customers.
All that is why we tabled new clauses 1 and 2. Voluntary codes for prepayment meters will never be enough. It is quite clear that we will never know how many people were forced on to prepayment meters against their will, especially when smart meters can be switched remotely to prepayment mode without people even realising initially.
New clause 1 sets out the need for legacy prepayment meters to be switched to smart meters as long as consent is given. This is an enabling aspect, as smart meters will make it easier to implement the provisions of new clause 1(3), which will end the practice of so-called self-disconnection. The provisions include the consideration of a social tariff, and, most importantly, mechanisms to allow customers to access credit and not be cut off immediately as they would be with a £5 or £10 credit limit.
New clause 2 restricts the forcible use of prepayment meters. It does not prevent informed consent and agreement for people to move to prepayment mode, because some customers like it as a way of managing their debt, but what is important is consent and an understanding of what prepayment means. The provisions also give access to impartial debt counselling services before the switch to prepayment mode is needed. Subsection (2)(c) places a duty on the Secretary of State to assess and define customer vulnerabilities, because the current definition is too narrow and does not cover some people who should be classed as vulnerable. Lastly, subsection (3) confirms that switching smart meters to prepayment mode is considered the same as a legacy prepayment meter.
Too many people have been forced on to prepayment meters. We cannot allow that to continue and we cannot allow the door to reopen for energy companies. No matter what they say here and now when there is an immediate storm and a backlash, we need to protect people for good going forward, which is what new clauses 1 and 2 will do.
According to recent Government figures, £120 million-worth of the vouchers issued for customers in prepayment mode were still unclaimed at the start of June. There are only four days left until the deadline on 30 June, so I hope the Minister will update us on the outstanding balance of unclaimed prepayment meter credit vouchers. Having nearly 20% of vouchers unclaimed at the start of the month is indicative of a failed policy that does not support the most vulnerable in our society. Again, that is why we need new clauses 1 and 2 to protect those who sometimes cannot protect themselves.
Kerry McCarthy (Bristol East) (Lab)
As always, it is a pleasure to see you in the Chair, Ms Nokes.
I rise primarily to speak in support of new clause 38, but it has quite a lot of overlap with new clause 2. Our new clause 38, on the restriction of the use of prepayment meters, says:
“The Secretary of State may by regulations restrict the installation of new prepayment meters for domestic energy use.”
It makes provision to ensure that consumers have full and informed consent on the installation of a prepayment meter, and that vulnerable customers are not put on to prepayment meters. We heard from the hon. Member for Kilmarnock and Loudoun some of the reasons why we have shared concerns about that. Some of my points will be very familiar to the Minister if he followed the debate earlier this year, when it reached crisis point.
Citizens Advice estimates that the number of people moved on to prepayment meters reached 600,000 in 2022, up from 380,000 in 2021. We know that that comes at a cost to them. There is a poverty premium on some of the most vulnerable, and on people on the lowest incomes, because of the shift to prepayment meters, and their use should be restricted as a result. Those with prepayment meters are more likely to be in fuel poverty and facing significant debts already. We find ourselves in a situation in which those requiring the most support are being forced to pay the most and are given the least help.
Citizens Advice revealed at the start of the year, at the height of the energy crisis, that someone was being cut off from their energy supply every 10 seconds, with millions unable to afford to top up their prepayment meters. We also know that so-called voluntary self-disconnection was a thing. People simply could not afford it, so they would not necessarily feature in the numbers. Labour’s call for a moratorium on the forced installation of prepayment meters was dismissed until the March Budget. The Secretary of State told the House on a number of occasions that he was talking to Ofgem and that plans were in motion, but during that period we were still hearing horrific stories about forced entry to people’s houses, warrants being issued and energy companies continuing to go down that path.
Our view was very much that it was the Government and the energy regulator’s responsibility to ensure that people were not left at home in the cold and the dark, yet we had to press incredibly hard before anything was achieved. Over the winter, more than 130,000 households that included a disabled person or someone with a long-term health condition were being disconnected from their energy supply at least once a week because they could not afford to top up. The same report also said that
“63% of PPM users who had disconnected in the last year said it had a negative impact on their mental health. This rises to 79% of disabled and people with long-term health conditions.”
Really good work was done by organisations such as Citizens Advice, but it also took tireless investigations from UK newspapers to expose the scale of the crisis. An investigation by the i in December showed that magistrates were batch processing hundreds of warrants in the space of a few minutes to allow the forced installation of prepayment meters, with one court in the north of England approving 496 warrants in just three minutes. At some point, we were given reassurances that people’s circumstances and vulnerabilities were being taken into account before the warrants were issued, but if nearly 500 are issued in three minutes, clearly they are not taking any information into account; it is very much a rubber-stamping exercise.
An undercover report by The Times in February highlighted how British Gas was employing debt collectors to break into people’s homes. Among them were customers described in the staff notes as a woman in her 50s with “severe mental health bipolar”, a woman who
“suffers with mobility problems and is partially sighted”,
and a mother whose
“daughter is disabled and has a hoist and electric wheelchair”.
We heard in debates at the time that many MPs had their own stories of constituents who were affected by the forced installation of prepayment meters; hopefully we will hear from some today to back up what we are calling for.
It was therefore a relief when action was taken in April, and a code of practice was introduced by Ofgem, but we have to wonder why the scheme is voluntary rather than compulsory. Just yesterday, the Committee on Fuel Poverty, in its annual report, expressed disappointment with Ofgem’s code of practice, stating that it is
“disappointingly limited in ambition”.
We have to wonder what the Government’s role is in that. I argue that Ofgem has proven incapable of dealing with the situation and it is up to the Government to step up and take control. That is what we seek to achieve with the new clauses.
The code’s voluntary nature still leaves too much power and judgment in the hands of energy suppliers, and the vulnerable and the voiceless should not be exposed to the dangers that prepayment meters pose, so I call on the Minister to give us some assurance that he accepts that it is the Government’s responsibility to act in this case—we cannot continue to leave it to voluntary codes of practice—and to support new clause 38.
Andrew Bowie
It is an absolute pleasure to serve under your chairmanship again, Ms Noakes, for sitting 16 in the final week before we conclude our proceedings in Committee. I thank Members for tabling their new clauses.
New clause 1 places a duty on the Secretary of State to ensure that all legacy prepayment meters are replaced with smart meters before the end of 2025. The Government have been clear that our aim is for as many households as possible to benefit from smart metering, including those that prepay for energy, which is why we have set minimum installation targets for suppliers until the end of 2025. To ensure effective scrutiny and transparency, large suppliers are also required to publish their performance against their targets, broken down by credit and prepayment mode. That ensures that they have strong incentives to deliver.
Although we agree with the hon. Member for Kilmarnock and Loudoun that smart prepayment is highly superior to legacy prepayment meters, it is also true that those customers who would benefit the most from prepayment meters can be among the hardest audiences to reach and the most vulnerable in our society. It is therefore critical that we tread carefully and do not place unrealistic targets in statute that may cause unintended consequences.
As drafted, the new clause could result in the prioritisation of the replacement of traditional prepayment meters. That may inadvertently deprioritise smart meter installation for credit consumers, many of whom are in vulnerable circumstances. Data from Ofgem indicates that around 70% of those with disabilities pay by direct debit and may therefore benefit from the automated readings that smart meters deliver.
Let me turn to the requirement to end self-disconnections within six months of the Bill becoming law. It is critical that the market delivers a fair deal for consumers, with an energy market that is resilient and investable over the long term. Ofgem’s recently published code of practice on prepayment is clear that when self-disconnection occurs, suppliers must make multiple attempts to contact the customer to understand the reasons for self-disconnection and offer appropriate support, including additional support credit. If frequent or prolonged periods of self-disconnection are identified, energy suppliers should assess whether a prepayment meter remains a safe and practicable option for that consumer.
As announced in the 2022 autumn statement, His Majesty’s Government have committed to work with consumer groups and industry to consider the best approach to consumer protection from April 2024, as part of a wider retail market reform. In addition, as announced at the spring Budget, we are keeping the energy price guarantee at £2,500 for an additional three months from April to June. That means we have covered nearly half a typical household’s energy bill through the energy price guarantee and energy bill support schemes since October, with a typical family saving £1,500. That is in addition to the expanded warm home discount scheme, which has been extended until 2026 and provides £475 million in support per year in 2020 prices.
New clauses 2 and 38 would allow the Secretary of State to restrict the use of prepayment meters, especially in relation to vulnerable consumers or where consumers are not aware that they are being moved to a prepayment mode. It is of course critical that our most vulnerable energy users are protected. The findings in The Times regarding British Gas customers were shocking and completely unacceptable. The Government acted quickly to tackle that issue of inappropriate prepayment meter use, and the Secretary of State wrote to energy suppliers insisting that they revise their practices and improve their action to support vulnerable households.
Following that intervention, all domestic energy suppliers agreed to pause the forced installation of prepayment meters and the remote switching of smart meters to prepayment mode. Ofgem rules are clear that suppliers can install a prepayment meter to recover a debt only as a last resort. They also require energy suppliers to offer a prepayment service only when it is safe to do so, with clear obligations on energy suppliers regarding support for customers in payment difficulty. The Secretary of State has called for more robust Ofgem enforcement on those issues, and Ofgem has responded by announcing a further review of supplier practices relating to prepayment meter customers.
Kerry McCarthy
The Minister may be about to come to this point, but I am wondering how it is going—does he know how many warrants are now being issued by the courts? Is he aware of statistics on how many prepayment meters are now being installed or on the type of customers who are being put on them?
Andrew Bowie
I do not have the exact numbers at my fingertips, but I am happy to write to the hon. Lady with that information. I can tell her that the senior presiding judge has ordered magistrates courts to immediately stop authorising warrants for energy firms to forcibly install prepayment meters while the process by which suppliers bring forward such applications is being reviewed.
Dr Alan Whitehead (Southampton, Test) (Lab)
In his reply to my hon. Friend the Member for Bristol East, will the Minister expand briefly on his understanding of the meaning of the word “pause” in relation to the forcible installation of prepayment meters by energy companies? As far as I am aware, there is no time set for that, nor is it subject to any other actions that the Government may take. Is it the Minister’s understanding that the pause is strictly time-limited and that practices may start again at the end of it?
Andrew Bowie
The pause will be until Ofgem has finalised the review of supplier practice in relation to prepayment meter customers. That is what we expect, anyway, because in addition to what I have said this morning, the Secretary of State has told Ofgem to toughen up on energy suppliers and to investigate customers’ experiences of how their supplier is performing. Following that, Ofgem established a new customer reporting system for households to pass on their experiences of how they are being treated. We are approaching this across the board. We believe, however, that any ban on the forced installation of prepayment meters would risk a build-up of customer debt. Unpaid debts increase costs for all energy consumers and could pose a risk to supplier stability.
To address issues around the forced installation of prepayment meters, Ofgem has recently published a new code of practice, as I mentioned. The code has been agreed with energy suppliers to improve protections for customers being moved involuntarily to a prepayment meter. It ensures better protections for vulnerable households, increased scrutiny of supplier practices, and redress measures where prepayment meters were wrongly installed. It includes provisions to prevent involuntary installations for all high-risk customers, including those dependent on powered medical equipment, people over 85, and households with residents with severe health issues. It also includes a requirement for suppliers to reassess whether prepayment remains the most suitable and preferred payment method for a customer once they have repaid debts. Suppliers must agree to any request from a prepayment customer who is clear of debt to move off a prepayment meter.
The rules to which suppliers must adhere regarding the installation of prepayment meters are set out in the licence conditions set by Ofgem as the independent regulator. Ofgem will undertake a formal statutory consultation process to modify suppliers’ licence conditions in line with the code ahead of this winter. This will allow Ofgem to use its full enforcement powers to enforce compliance with the code, ensuring that consumers are protected and that the poor practices that we have seen will not happen again.
It is vital that, as the independent regulator, Ofgem continues to set the rules to which energy suppliers must adhere in licence conditions. New clauses 2 and 38 would risk taking that power away from Ofgem. Allowing the Government to set rules outside the licence conditions would threaten Ofgem’s independence and its ability to regulate suppliers effectively.
The Government 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. We will continue to work closely with Ofgem and industry to see that the code leads to positive changes for vulnerable consumers. I hope that hon. Members are reassured by my explanation and that they might feel able to withdraw their new clauses.
Alan Brown
Despite what the Minister says, I am not fully convinced by those arguments. With the leave of the Committee, I will not press new clause 1 to a vote, but it is important to understand that new clause 2 would not even mean an outright ban on the installation of prepayment meters; it would just put protections in place so that people are not forced on to prepayment meters. It would also address debt build-up by ensuring that people are given access to debt counselling, for example. New clause 2 is about working with customers and providing additional protections, so I would certainly like to press it to a vote.
On new clause 1, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Restriction of the use of prepayment meters
“(1) The Secretary of State may by regulations restrict the installation of new prepayment meters for domestic energy use.
(2) Regulations under subsection (1) may set conditions for energy suppliers in relation to the installation of new prepayment meters, including—
(a) ensuring consumers have given full and informed consent to the installation of a prepayment meter after having been offered access to a recognised debt counselling agency;
(b) ensuring vulnerable consumers are not required to use prepayment meters;
(c) publishing a non-exhaustive list of circumstances in which a consumer is considered vulnerable, including financially vulnerable; and
(d) ensuring consumers have a clear, timetabled route back to standard meters once specified conditions are met.
(3) In this section ‘installation of new prepayment meters’ includes switching existing energy meters to a prepayment mode.”—(Alan Brown.)
This new clause would allow the Secretary of State to restrict the use of prepayment meters, especially in relation to vulnerable consumers or where consumers are not aware they are being moved over to a prepayment mode.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Alan Brown
I beg to move, That the clause be read a Second time.
This fairly simple clause seeks for the Government to include in all future legislative impact assessments a net zero compatibility test. Achieving net zero is vital to save to planet. The Government have legally binding targets to hit net zero by 2050, and this Committee has agreed to Government amendments that give Ofgem a statutory duty to consider net zero. If the regulator is obliged to consider net zero, and if the Government have legal targets to achieve net zero, surely it makes sense to legislate for the Government to undertake a net zero compatibility assessment, so as to ensure that policies will not have an adverse impact on the legally binding target to achieve net zero. That would result in transparency on whether policies are adversely or positively impacting on the route to net zero. Such transparency would also be of assistance with costs, especially given the net zero cynics among Government Members. Importantly, Energy UK, the trade body that represents energy companies, also says that it supports a net zero compatibility test.
Given what I have outlined, I do not see why the Government would not accept the new clause. If the Government can carry out impact assessments of the effect of legislation on small businesses, why not carry one out on the wider, legally binding target to hit net zero? I hope that the Minister will accept the new clause.
Andrew Bowie
I thank the hon. Members for Kilmarnock and Loudoun and for Argyll and Bute (Brendan O’Hara) for tabling their new clause. The Government agree with the intention behind it, but we believe that it is unnecessary. We are already taking a cross-Government and systematic approach to embedding net zero and climate into Government policies and decision-making processes.
The creation by the Prime Minister of the new Department for Energy Security and Net Zero, which I am proud to serve, means that there is an entire Department dedicated to delivering on our climate ambitions. The Department’s focus, alongside energy security, is driving overall delivery of net zero and maximising the economic opportunity that the transition presents. The new Department’s officials work with counterparts across Government to co-ordinate action, working particularly closely with the Cabinet Office and the Treasury to ensure that net zero is prioritised in Government policy and decision making, and that it aligns with our wider priorities.
We are also working with industry and stakeholders, which has led to the creation of the net zero council, the green jobs delivery group, the jet zero council and the local net zero forum. We also work closely with our devolved Administration colleagues. We have also gone further by creating the Domestic and Economic Affairs (Energy, Climate and Net Zero) Committee, which brings together senior Ministers from across Government to ensure a co-ordinated approach to delivering net zero across government. Additionally, we have provided Green Book supplementary guidance on the valuation of energy use and greenhouse gas emissions for appraisal. That guidance helps officials when undertaking options appraisal for policies, programmes and projects; building business cases; and when conducting impact assessments. I hope that provides the hon. Member with the reassurance that he needs to withdraw his new clause.
Alan Brown
The Minister smiled when he said he hoped that that would satisfy me. There is no surprise that it does not. He outlined the creation of the new Department for Energy Security and Net Zero, and the important thing is that the net zero compatibility test would apply to all legislation that the Government introduce from every Department, so it would make every Department start to consider the net zero implications of its policies. That is what is critical about this new clause. I do not wish to withdraw the motion.
Question put and negatived.
New Clause 6
Just Transition Commission
“(1) Within six months of the date on which this Act is passed the Secretary of State must by regulations establish a body to be known as the ‘Just Transition Commission’.
(2) Regulations under subsection (1) must provide for the purposes of the Just Transition Commission to include—
(a) the provision of scrutiny and advice on the ongoing development of just transition plans;
(b) the provision of advice on appropriate approaches to monitoring and evaluation; and
(c) consultation with such persons as the Secretary of State shall consider appropriate in relation to the delivery and likely impact of just transition planning.
(3) The Just Transition Commission must produce and lay before Parliament an annual report of its work.”—(Alan Brown.)
Brought up, and read the First time.
Alan Brown
I beg to move, That the clause be read a Second time.
I shall potentially continue my losing streak here. This new clause is about setting up a just transition commission. The Committee may be aware that the Scottish Government set up a just transition commission a couple of years ago, which is effectively world leading. It brings together independent academics, and representatives from trade unions and right across industry. It advises the Scottish Government on policy implications and what is needed as we move forward to a just transition to ensure that workers are not left behind and do not lose their jobs, to be effectively left on the scrapheap.
This important body came together and has brought transparency to the Scottish Government, and I want to see that replicated at Westminster. It would be good for the Government as a way to work across the sector and the industry, with trade unions and academics to provide expertise. I look forward to hearing the Minister’s thoughts on that, explaining why they are probably not going to do this in the short term. I will be happy to be proved wrong on that.
Kerry McCarthy
We certainly need more focus, and to hear more from the Government about ensuring that this is a just transition. We know that we cannot reach net zero without the skilled workforce to deliver it, and without decisive action to ensure that no community is left behind. It is illustrative to look at what Joe Biden is doing with the Inflation Reduction Act in the United States, where a lot of focus is on energy-intensive states such as Texas to ensure that, as they move away from fossil fuel exploration, the jobs are still there. We all know what happened, as we debated earlier in this Committee, when the coalmines were closed with the lack of a strategy to ensure good, decent jobs for people left behind. We saw whole communities abandoned and, in some parts of the country, turned into basic commuter villages, rather than having a home-grown industry.
It has rightly been said that net zero is the economic opportunity of the century, but it represents a potential threat to those who, at the moment, rely on traditional industries. That is not because oil and gas extraction will immediately cease, or because coal-fired blast furnaces will suddenly be switched off. It is because our reliance on the old way of doing things will gradually decline and, as a result, the skills required will evolve.
Workers in those industries need to know that there is a plan. As I said, we cannot allow the mistakes of the 1980s to be repeated. We need a forward-looking industrial strategy, to make it clear that the transition to net zero is an opportunity to reinvigorate our industrial heartlands and coastal communities and to make it clear that that means a higher quality of work, better regulation of employment practices and greater diversity in the sector. This is quite a complex task. Some of it will be industry-led, but we know, particularly when we get further down the supply chain to those clusters of jobs that will be based around the traditional industries, that those smaller companies will need support to diversify as well.
Alan Brown
The hon. Lady will be aware that procurement rules and contracts for difference auctions, for example, are reserved to Westminster, so the Scottish Government do not have control of that. There is a whole supply chain aspect that is not developed, and that is partly because of these procurement rules—the fact that the cheapest price takes all. We want that amended at some time.
Kerry McCarthy
I was about to move on to that, because it is important. On the Government’s lack of action on developing a strategy, I have been trying to ask questions about the Green Jobs Delivery Group, such as when we will actually see some delivery and outcomes and how that will feed through into a skills strategy and an industrial strategy, but I have been getting very little by way of response.
Friends of the Earth Scotland has called on both the UK Government and the Scottish Government to ensure greater worker representation in their transition planning through existing bodies such as the UK’s Green Jobs Delivery Group and the Just Transition Commission in Scotland. It says that at the moment there is little support provided for high-carbon workers to find alternative jobs, to facilitate retraining where necessary, or to lighten the financial burden of training currently borne by the workers.
Last month, the Climate Change Committee briefed that the
“Government has policy levers at its disposal to support workers during the transition”
but warned that
“clearer plans are needed to harness the potential of the transition and to manage its risks.”
Work has been done. As I said, my concern is about focusing on setting up a commission rather than just calling on the Government to actually come forward with a clear strategy, a clear road map, particularly on the skills front, and to link that up. I do not know whether the Minister will accept my analysis of the situation, but it seems very fragmented. It is left, in large part, to big companies in the supply chain to try to ensure that the workers of the future are there as they transition. There is not a strategy for the smaller companies in the supply chain unless the big companies are leading that.
Alan Brown
I understand what the hon. Lady is saying about wanting the Government to get on with it sooner, but does she not agree that commissioning a body of experts will provide better advice, enabling the Government to develop their strategy better?
Kerry McCarthy
As I said, the Government have had their green jobs taskforce, and now they have the delivery group. They are also doing things on the nature side. I would argue that they should have had all the information and expert advice; it is all available out there.
What we need are more incremental steps. Rather than setting up a body, we need something concrete from the Minister on what the Government are doing, for example, to ensure that further education colleges are tying up with the potential needs of businesses in their areas. Some incredibly good further education colleges are working on that—going into schools, working with businesses and encouraging young people to look at those careers—but as I said it is piecemeal and depends on the quality of the college, and the relationship with other agencies in the local area. I sympathise with focusing on a just transition, but I have concerns about whether setting up another body is the way to do it.
Andrew Bowie
I thank the hon. Members for Kilmarnock and Loudoun and for Bristol East for their contributions. The Government agree with the intention behind the new clause; however, we already view transition as a consideration embedded across all Government policy actions. We are committed to managing the transition to net zero in such a manner that the positive opportunities are maximised for the economy and the population, while protecting individuals, communities and the economy.
Given that the majority of the low carbon economy lies outside London and the south-east of England, Government action to deliver our net zero commitment and build a low carbon economy will help to level up the UK and spur on the transition. That is demonstrated through the North sea transition deal agreement in March 2021, through which the UK became the first G7 country to agree a landmark deal to support the oil and gas industry’s transition to clean, green energy, while supporting 40,000 jobs in industrial heartlands across the UK.
Since delivering a net zero workforce transition needs joint action by Government, industry, and the education sector, the Government have established the green jobs delivery group. The group is headed up by Ministers and business leaders to act as the central forum for driving forward action on green jobs and skills, and has committed to publishing a net zero and nature workforce action plan in 2024, which will consider the workforce transition. We will continue to join up across the devolved Governments, who have already made excellent progress, with the Welsh Government having launched their net zero skills plan in March 2023, and the Scottish Government and Skills Development Scotland having launched their climate emergency skills action plan 2020-2025 in 2020.
Alan Brown
On working with the devolved Governments, does the Minister recognise that it is time for the UK Government to match fund the £500 million just transition fund that the Scottish Government have put in place?
Andrew Bowie
I thank the hon. Member for his intervention, and point him to the remarks that I just made regarding the huge investment that we are already making in the transition, the fact that we were the first G7 nation to sign a transition deal, and the £100 billion of private sector investment by 2030 that we hope to see, and that we are driving into British industries, supporting 480,000 green jobs by the end of the decade. We are looking to meet that target, unlike the Scottish Government’s green jobs target, which of course they have not met—alongside failing in four years out of five to meet their climate change targets, as was announced just last week. Since delivering a net zero workforce transition needs joint action by Government and industry, as I have said, we are continuing in that regard.
With respect to the scrutiny advised in the new clause, the Government already report progress on delivering our net zero ambitions through multiple channels—through parliamentary Select Committees, the Public Accounts Committee, independent bodies such as the National Audit Office, and—under the Climate Change Act 2008—the Climate Change Committee. I should point out that the hon. Member’s colleague and friend, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), has recently taken up the chairmanship of the Energy Security and Net Zero Committee, and will, I am sure, ably hold my Department to account. I hope that that provides the hon. Member for Kilmarnock and Loudoun with the reassurances that he needs to withdraw the motion.
Olivia Blake (Sheffield, Hallam) (Lab)
It is a pleasure to serve under your chairmanship, Ms Nokes. I have asked a few written questions in this space and I agree wholeheartedly with my hon. Friend the Member for Bristol East that the just transition should have already started for many workers. A survey two years ago found that workers were looking to move from the fossil fuel industry to renewables but that they were being put off by training fees. I have asked repeatedly about that.
I asked the Department whether it knew what the average cost of retraining would be for oil and gas workers but was told that it does not know or does not hold that data. However, I have heard at first hand from oil and gas workers who want to move into renewables that they face training costs of many thousands of pounds and that the quality of such training is questionable in some places. Government inaction risks leaving those workers behind when they want to be part of the transition and already have transferrable skills in those industries. I also recently asked a question about the Department’s discussions with the offshore wind industry on recognising an energy skills passport to help oil and gas workers, but was told in response that no such discussions have taken place.
I thank the Minister for his kind words about a transition. However, when will we see action for oil and gas workers? When will the inaction turn into action and delivery so we can get on with developing the green skills we need in this country to deliver net zero and compete in a global market?
Andrew Bowie
I thank the hon. Member for Sheffield, Hallam for the tone of her words. The Government believe that the best way to secure jobs for oil and gas workers is to continue to give them support and, indeed, to support investment into the North sea, which not only provides secure employment for them now and into the future but provides for our energy security needs, which is something the Labour party might take note of moving forward.
As a representative of a constituency in the north-east of Scotland, I am fully aware of the pressures that workers in the North sea oil and gas industry face and the desires of many of them to transition to new green jobs. We see that in the city of Aberdeen, which is transitioning from being the oil and gas capital of Europe to the energy capital of Europe. That is why we have set up our green jobs delivery group and why we are identifying recommendations and actions for central and local government, industry and business, and the devolved Administrations.
We are also exploring how we can support local areas to deliver a successful transition, and the Department for Work and Pensions is expanding sector-based work academy programmes to help those who are out of work develop the skills they need to re-enter the job market. The programme runs in England and Scotland and is developed by jobcentres in partnership with employers and training providers. The Government take that incredibly seriously and I have a particular interest in the matter.
I thank the hon. Lady for her comments, but we are clear that it is very important to support people who are reskilling and upskilling from traditional oil and gas jobs into new green jobs, while also investing in our oil and gas industry to ensure that investment continues to support the traditional jobs that will be needed for some time yet.
Alan Brown
The Minister puts forward arguments that suggest the Government are doing a lot in terms of green jobs. The Government are doing some things, but not enough. That is the reality.
To go back to my intervention on the hon. Member for Bristol East, the CfD rules should have been changed years ago to incentivise supply chain development and create those homegrown jobs. Perhaps a just transition commission would have provided advice on how that procurement could have been taken forward. I want to revisit that. The Government should think and should speak to people engaged in the just transition commission. In the meantime, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 33
Purposes
“(1) The principal purpose of this Act is to increase the resilience and reliability of energy systems across the UK, support the delivery of the UK’s climate change commitments and reform the UK’s energy system while minimising costs to consumers and protecting them from unfair pricing.
(2) In performing functions under this Act, the relevant persons and bodies shall have regard to—
(a) the principal purpose set out in subsection (1);
(b) the Secretary of State’s duties under sections 1 and 4(1)(b) of the Climate Change Act 2008 (carbon targets and budgets) and international obligations contained within Article 2 of the Paris Agreement under the United Nations Framework Convention on Climate Change;
(c) the desirability of reducing costs to consumers and alleviating fuel poverty; and
(d) the desirability of securing a diverse and viable long- term energy supply.
(3) In this section ‘the relevant persons and bodies’ means—
(a) the Secretary of State;
(b) any public authority.”—(Dr Whitehead.)
This new clause and NC34, NC35 and NC36 are intended as a suite of purpose and strategy clauses for this Bill.
Brought up, and read the First time.
Dr Whitehead
I beg to move, That the clause be read a Second time.
We come now to something that has run as a bit of a leitmotif through our discussions in Committee, which is the position of the North Sea Transition Authority—I was going to say the “so-called” North Sea Transition Authority, but I accept that it is the North Sea Transition Authority. However, as we have pointed out in previous debates, the name came about by means I am not entirely clear about, as opposed to being set in legislation.
In a previous debate, we discussed the circumstances under which somebody might go about their daily business calling themselves a particular appellation but find out that there were legal consequences to using a name that was not actually theirs, even though for daily purposes that name was reasonably accepted. That is the key point as far as the North Sea Transition Authority is concerned, because legally the North Sea Transition Authority is actually the Oil and Gas Authority. It is not just legally the Oil and Gas Authority; it is an authority that was effectively set up by the Energy Act 2016.
If we turn to the pages of the 2016 Act, we see a number of functions that the OGA must undertake. It is not the case that the OGA did not exist at all in any form prior to the 2016 Act’s passing into law; it was originally incorporated under the Companies Act 2006 as the Oil and Gas Authority Limited. The 2016 Act made a particular point of taking that limited company and transforming it by legislation. It states:
“The company originally incorporated under the Companies Act 2006 as the Oil and Gas Authority Limited is renamed as the Oil and Gas Authority.”
There it is in the legislation. The 2016 Act then made a number of transfers of functions from the OGA: the transfer of property rights, staff and so on. It is fairly clear from that that the Government at the time of the passage of the 2016 Act had a very real intention as to the function, activity and so on of the Oil and Gas Authority: they set it all out in the legislation. They were clear and specific on that. They were also clear and specific on what the OGA should be doing.
It was not just guidance on what the OGA should be doing; it was set out in the legislation under section 8, “Matters to which the OGA must have regard”. It needed to
“minimise public expenditure relating to, or arising from, relevant activities.”
It was concerned with the
“need for the United Kingdom to have a secure supply of energy.”
It had a function entitled “Storage of carbon dioxide”, and the OGA needed to
“work collaboratively with the government”.
By the way, regarding a debate we will come to later, the OGA also had at least an implied function with respect to the maximum economic extraction of oil and gas from the North sea. It was clear that the OGA had a number of things it should do, and that it was able to collect samples and regulate the oil and gas industry in the North sea, all within the overall umbrella of maximising economic recovery of that oil and gas in the North sea and elsewhere.
The OGA had a clear set of legal requirements and a clear set of duties and responsibilities, but the Government’s decision—I do not know whose decision it was, and it would be helpful if the Minister clarified that for me—that, henceforth, the OGA should be called the North Sea Transition Authority was, as far as I can see, conceived and carried out on no legal basis whatever. It was simply a device, which I guess aligned with the North sea transition deal, which was originally entitled the North sea oil and gas deal, whose title was, during discussions on the deal, so I understand, changed. That was when the Government had an industrial strategy, and this was put forward as a strategy for oil and gas in the North sea, although it also included elements of what we might say was a transition.
The North sea oil and gas companies undertook to change their position on flaring, for example, and undertook to do various things about the electrification of the North sea oil rigs and various other things. However, notably in the North sea transition document, there was no mention of, nor any agreement on, the management of production in the North sea, or indeed management of exploration or any other activities that were going on. This was a limited document that might be described as a North sea transition document, and an even more limited change to the name of the North sea OGA, which was renamed the North Sea Transition Authority. I presume that the name change arose from the basement of the Department for Business, Energy and Industrial Strategy as a nod in the direction of that particular document, but that is all.
The North Sea Transition Authority has done some mighty work in respect of its new function. It has changed its notepaper, I think—it has got that bit sorted out—but nothing else has happened as far as the authority is concerned. As the Minister saw just recently, and as I have periodically pointed out as the Committee has progressed, when the guidance notes and the notes published by the Department on various aspects of the Bill appear, we see that the North Sea Transition Authority is doing various things related to various aspects of the Bill. However, when we go into the clauses in the Bill, we see that it is not the North Sea Transition Authority that is doing those things, but the Oil and Gas Authority, because that remains the legal arrangement.
Andrew Bowie
I thank the hon. Member for tabling his new clause and for his attempts at my reformation. To be clear, the new clause would change the name of the Oil and Gas Authority and introduce an express obligation for it to ensure the transition to net zero in carrying out its functions.
In March 2022, the Oil and Gas Authority changed its trading name to the North Sea Transition Authority, or NSTA. The change, supported by the Government and the Opposition, reflects the expanded role the NSTA plays in our transition to a net zero economy.
Under the new clause, the name change would occur only in the Energy Act 2016. However, as the hon. Gentleman admitted, the Oil and Gas Authority is mentioned in a large amount of primary and secondary legislation, which would also require amendment. Any partial change of name could undermine or change the NSTA’s statutory functions, powers and objectives. However, the Government recognise the importance of the change and, as we speak, we are considering legislative options to amend the authority’s statutory name to the NSTA in all places where it occurs.
Dr Whitehead
Indeed there is a feeling welling up in me that we are not able to proceed with the new clause, given that the Minister said—and I agree—that such a change cannot be made easily with a quick stroke of a pen, and that a number of other things need to be considered alongside that. I am pleased that he indicated that, as we speak, there are serious people with towels round their heads working through the implications and looking at how we can best do it. That was the intention of the new clause, but perhaps I was rather optimistic in thinking that the name change could be written in easily. I appreciate that it cannot.
I also appreciate that the transition authority has the green light from Government to start undertaking things relating to transition. It is beginning to pursue that, and that is all good, but I say gently to the Minister that at some stage we will need to push this together. If the gentlemen with wet towels round their heads—
Dr Whitehead
And ladies, indeed. If they can undertake their work in a reasonable fashion, I hope we will have a solution that is good for all of us, as far as the transition is concerned. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 44
Maximum economic recovery in the North Sea
“(1) The Petroleum Act 1998 is amended as follows.
(2) Omit sections 9A to 9I.”—(Dr Whitehead.)
This new clause removes reference to Maximum Economic Recovery in the North Sea as placed into the Petroleum Act 1998 by section 41 of the Infrastructure Act 2015.
Brought up, and read the First time.
Dr Whitehead
I beg to move, That the clause be read a Second time.
New clause 44 concerns a similar legislative requirement—this time, not in the Energy Act 2016, but in the Infrastructure Act 2015. The 2015 Act—I know that hon. Members will have it at their bedsides at all times—contains what can only be described as a performative piece of legislation. Section 41 makes an extensive amendment to the Petroleum Act 1998, which worked perfectly well in supporting the development and activity of the North sea basin, to introduce a principal objective of
“maximising the economic recovery of UK petroleum”—
interestingly, that is not defined in the legislation—through
“development, construction, deployment and use of equipment,”
collaboration among various persons, and so on.
Section 41 also states that the Secretary of State
“must produce one or more strategies for enabling the principal objective to be met.”
There is a requirement on the Secretary of State,
“As soon as practicable after the end of each reporting period,”
to
“consider the extent to which, during that period, these persons have followed section 9C by acting in accordance with the current strategy or strategies,”
and to
“produce a report on the results of the consideration of that question.”
The section goes on to state what the report must contain, and to provide that the Secretary of State
“must publish, and lay before each House of Parliament, a copy of each report produced under this section.”
I have one initial question for the Minister: where are the reports? I have looked quite hard in the Library and various other places to find copies of the reports that the Secretary of State was supposed to produce in each reporting period, and to identify what considerations he or she made in terms of licence holders and operators under petroleum licences and so on. It is probably a case of me being a little remiss, but I cannot find those reports on the maximisation of the economic recovery of UK petroleum, several of which should have been produced by now, since they are supposed to be produced at the end of each two-year reporting period.
Far be it from me to suggest that the Secretary of State is in breach of his requirements under the 2015 Act. I am sure the Minister can put me right about whether the Secretary of State is in breach and either point me to the reports or, perhaps, suggest that they might be forthcoming. I hope the Minister has received inspiration that may enable him to address that point.
Even at the time, section 41 of the 2015 Act appeared to be rather strange in definitional terms. What would lead the Secretary of State to consider that the economic recovery of UK petroleum has been maximised? Is it the extraction of every last drop of petroleum and gas from the North sea—and, if so, over what timescale? It is unclear. Presumably, if economic circumstances change and make further North sea extraction economical, the Secretary of State and industry should start busily extracting everything that is economically extractable, even though in the future it may not be regarded as such.
Section 41 is a bit of a nonsense, and of course it is a much bigger nonsense now than it was, because the Government have solemnly agreed to our net zero targets and amended the Climate Change Act 2008. Indeed, the amendment of those targets was agreed after the 2015 Act was passed. We now have targets for our country’s future emissions, as well as legislation that essentially says that we are required to do the opposite of those targets through oil and gas extraction in the North sea.
As I am sure the Minister is aware, one important calculation in reaching net zero—indeed, the Government have introduced a net zero calculator—is whether at least some extraction of oil and gas from the North sea contradicts the net zero target. We have had a number of assessments, including from the Climate Change Committee and various other bodies, that maximising the economic extraction of oil and gas from the North sea would undoubtably bust our targets, and that we must be clear that at least some of it probably needs to be left there. If we sucked the North sea and other places dry of their oil and gas resources, depending on how we accounted for it, that would pretty much inevitably bust our ability to reach our targets. The objective to maximise economic recovery sits in stark contradiction to our overall emissions targets.
Olivia Blake
It has been an interesting discussion. “Maximum economic recovery” might sound like three benign words, but they could be a toxic combination. If we are not careful, they could be rephrased as “maximum economic crisis”. The climate catastrophe that will unfold if we do not cap global warming at 1.5°, and maintain that on average over 20 years, will be incredibly tough for any Government and for everyone internationally. Some reports suggest that if we wait 10 years, it will not take 1% of GDP to tackle the climate emergency; that will jump staggeringly. About 8% of GDP expenditure will have to go on resilience alone, and dealing with the consequences of the climate catastrophe. The cost of changing to a green energy system in that same decade would double as well. It is really important that we understand what that means.
I say “toxic combination”, but there is also the very real and significant risk of stranded assets. The financial sector, the insurance industry and pension funds are all very aware of the issue, and we see that in how they are changing the way that they invest in projects, and the divestment policies of many of the institutions in this space. Nature published an article in 2022 stating that 60% of oil and gas and 90% of known coal should remain in the ground if we are to get to 1.5°C, but the issue of stranded assets is a reality. We cannot have our cake and eat it; we cannot inhale our cake quicker and hope for the best. Every drop of oil and gas and every lump of coal that we burn contributes to the Anthropocene we are seeing. We have decisions that we can take, and we know that those decisions have an impact.
Stranded assets are really important in this debate. A report in 2022 suggested that the oil, gas and fossil fuel industry had £1.4 trillion of stranded assets. That means that there will be a cliff edge for jobs. There will be assets that people can no longer use or get value from. It will mean that we have barrels of oil, gas and coal that we cannot use, because—a very senior scientist makes this argument in the report—the world will have moved on. We hope that the world will move on as a result of the Bill; if we do not scale up net zero measures, UK households could be spending £500 a year on foreign gas, rather than saving £1,500-odd through a move to renewables and energy efficiency policies, and retrofitting.
This is an incredibly important point. We cannot just hope that things will get better, and squeezing every last drop out of the North sea is not compatible with our aim of 1.5°. We cannot set a date for getting to net zero, but then produce as much carbon and other greenhouse emissions as we like and hope for the best. There must be carbon budgeting, as we all know. We have had all this conversation about a just transition, yet we are giving massive tax breaks. For example, if Rosebank goes ahead, it will receive a tax break of £3.75 billion for something that may soon become a stranded asset.
Katherine Fletcher (South Ribble) (Con)
I am grateful to the hon. Lady, and I will be brief. Will she share the definition of a stranded asset? Some oil and gas extraction areas have enormous potential for carbon capture and storage; it will be a matter of pushing stuff down a pipe, rather than pulling stuff out of it. Has any of that been taken into account in her slightly apocalyptic analysis of what we can do in the North sea and other areas?
Olivia Blake
It is apocalyptic because going above 1.5°C will be catastrophic.
Olivia Blake
I absolutely agree that it needs to be a transition; that is exactly my point. In the scenario we are discussing,
“Fossil fuel resources that cannot be burned and fossil fuel infrastructure (e.g. pipelines, power plants) that is no longer used may end up as a liability before the end of its anticipated economic lifetime.”
The assets are not being valued at their value over their lifetime; it is that simple. Say we give a value to an asset for its lifetime—25, 50, 100 years or whatever. Its lifetime will fall short of that period, and there will be catastrophic consequences for the financial and economic world; things will go into freefall. This is about economic risk, not just what we have, where. It is that fundamental. That understanding is missing from a lot of this debate, but financial services, pension funds and the insurance industry are all saying that they are very aware of the issue.
Katherine Fletcher
The hon. Lady has just read quite a detailed definition of a stranded asset, which included fossil fuel reserves remaining under the ocean, if I heard her correctly.
Olivia Blake
We would have to leave them there, but figures for them would be baked into the economic analysis and the business planning for those sites. That is why there is a financial risk; financial plans will come into play that will be unrealistic and unmeetable. That is why the assets will become stranded assets; it had been planned that they would produce a profit over a period, but we will not get to that time because of the situation.
Katherine Fletcher
If I understand the hon. Lady correctly, she is worrying about a figure of £1.5 billion in stranded assets, which includes fossil fuels that are left under the ground. That does not take into account the fact that the assets could be repurchased for an energy transition. Would she agree that there is perhaps more analysis to do?
Olivia Blake
To be clear, it is not £1.3 billion; it is £1.4 trillion, and that is why this is significant. I am not the only one worried about this—so are financial institutions around the globe. This massive financial risk could spin us into financial crisis if we are not careful. This is not just a climate catastrophe; it is an economic situation that we need to monitor, and we need to ensure that we do not have a cliff edge that lands us in a spiral that we cannot get out of. That is why a transition is so important, and why we need development of industry in the North sea, but cannot rely on our valuations of assets at the moment.
We need to take into consideration changes in the use of oil and gas, so that we can reach 1.5°C. We cannot deal with those two issues in isolation. As much as that would please everyone at the moment and allow them to make a quick buck, it is economically illiterate to think that we can continue as we are. That is a big problem. There are huge opportunities for Government, and I welcome a lot of the things in the Bill that will help to unlock them.
At household level, the move to renewables would significantly benefit people. Renewables are three times cheaper than oil and gas-related heating and electricity. A record number of households are suffering from energy insecurity. It is important that we look at the issue in the round. We cannot just say, “We need this” or “We need that,” and expect it to add up. If the financial sector gets scared, and much suggests that it is, it will look to invest in other places. If insurance companies say, “We are not going to insure these facilities because there is such an economic risk to us,” we are in trouble. If pension funds flee from the sector, we are in trouble. Our financial sector is incredibly important in this area, and those in it are saying loud and clear, “Governments are behind us, and we need them to catch up.” This tiny phrase, “Maximum economic recovery”, and what it asks for, could lead to the cliff edge that we have all been saying that we do not want. That is why this is so important.
Andrew Bowie
I thank the hon. Members for Southampton, Test, and for Sheffield, Hallam, for their impassioned contributions to the debate. There has been talk of apocalypse and catastrophe, and there has been some idea that the country is not taking the issue seriously. The hon. Member for Sheffield, Hallam suggested that we were just setting a date and hoping for the best. Nothing could be further from the truth. We have decarbonised faster than any other G7 nation. Off the coast of this country are the first, second, third and fourth-largest offshore wind farms in the world. We created an entire Department to focus on the challenges of net zero, and we are passing this Bill, which will enable us to unlock so much of what we need to do to move this country forward even more quickly.
There was talk of economic illiteracy, but it is economic illiteracy not to support our outstanding British offshore oil and gas industry as it continues to produce the oil and gas that is required to keep the lights on in this country as we transition to a net zero future. It is the safest, most responsible offshore oil and gas sector in the world. Indeed, by 2035 we will have the first net zero offshore oil and gas sector, and the North sea will be the first basin in the world to be a net zero basin. I urge colleagues to stop talking down this Great British success story and start talking it up, as it contributes so much to our energy security and net zero ambitions.
Olivia Blake
I think the Minister completely missed the point of what I was saying. I am in no way doing down the industry. I am saying that there are financial risks linked to our climate risks, and they must be brought into this debate. That is fundamental, and future Governments will not thank us if we do not discuss and address that now.
Andrew Bowie
I could not agree more that there are financial risks. That is probably why, just this morning, so many businesses expressed their worry at Labour’s Just Stop Oil plans, which were outlined a couple of weeks ago and which the former Labour leader of Aberdeen City Council described as even worse for an industry than the actions of Margaret Thatcher in the 1980s. That is from a member of the Labour party who resigned due to Labour’s policies on oil and gas.
Dr Whitehead
I would be grateful if the Minister withdrew that comment about Labour’s “Just Stop Oil plans”. There are no Labour Just Stop Oil plans. Indeed, Labour has condemned the activities of Just Stop Oil protesters, because Labour does not wish just to stop oil. We specifically said this morning that we do not wish to do that, and that we see a substantial role for the North sea oil and gas industry out to 2050. We would support that future, so I hope the Minister will not resort to these easy gibes and will address the issue rather more seriously today. That would be helpful.
Andrew Bowie
I should probably turn to the new clause, but I welcome the welcome and support that the hon. Gentleman—and now, it seems, the Labour party—will give to our offshore oil and gas industry. He should probably inform the members and founders of Just Stop Oil who have donated so much money to his party.
The objective of maximising economic recovery in the North sea forms the basis of the North Sea Transition Authority’s regulatory functions, and removing them could significantly undermine its ability to operate as intended. It would also lead to a significant lack of clarity about the authority’s regulatory role. Maximising the economic recovery of oil and gas need not be in conflict with the transition to net zero, and the North Sea Transition Authority is already doing a great deal of work to support an orderly transition that delivers on our climate commitments and supports workers.
In December 2020, in accordance with section 9A of the Petroleum Act 1998, the North Sea Transition Authority published a revised strategy, titled “The OGA Strategy”.
Andrew Bowie
It is rather ironic, given what we have just been discussing. Through the revised strategy’s central obligation, the North Sea Transition Authority must
“secure that the maximum value of economically recoverable petroleum is recovered from the strata beneath relevant UK waters; and, in doing so, take appropriate steps to assist the Secretary of State in meeting the net zero target”.
The strategy therefore already provides a basis for the North Sea Transition Authority’s ongoing work to help drive the energy transition.
Under the revised strategy, the North Sea Transition Authority has also introduced new expectations for how North sea oil and gas assets will be managed in the least polluting way, and it will consider the full societal carbon cost when taking decisions. The North Sea Transition Authority will continue to work with Government, industry and other regulators to help accelerate the move to net zero while meeting the UK’s energy demands and need for energy security.
Section 9D of the Petroleum Act 1998, on reports by the Secretary of State, was repealed by paragraph 10 of schedule 1 to the Energy Act 2016, which means the repeal happened before any reports needed to be produced.
I pay tribute to our offshore oil and gas industry, particularly Offshore Energies UK and its “Vision 2035” plan, which means the North sea will become the world’s first net-zero basin. With these explanations, I hope the hon. Gentleman feels able to withdraw his new clause.
Dr Whitehead
I thank the Minister for clarifying the position on reports, because I must admit that I had not read that paragraph of the 2016 Act. It rather underscores my point that this is a performative piece of legislation. There were requirements to report, but the Government presumably realised that they were even sillier than the original imposition on the 1998 Act and decided, one year later, that reports would not be necessary. It could have been a bit embarrassing if the reports came out, so they decided that the reports were not necessary. I thank him for that clarification, but he is rather speaking to my point instead of his.
I am very disappointed that the Minister has sought to characterise our debate as one side of the Committee being against oil and gas and the other side being in favour; he thereby swerves the important point raised by my hon. Friend the Member for Sheffield, Hallam. On the overall position that maximum economic extraction could lead us—
Victims and Prisoners Bill (Sixth sitting)
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Public Bill CommitteesRead Full debate Victims and Prisoners Bill 2022-23 View all Victims and Prisoners Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 June 2023 - (27 Jun 2023)
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 51, in clause 1, page 1, line 16, at end insert—
“(e) where the person has experienced adult sexual exploitation.”
Amendment 18, in clause 1, page 2, line 6, at end insert—
“(c) ‘child criminal exploitation’ means conduct by which a person manipulates, deceives, coerces or controls a person under 18 to undertake activity which constitutes a criminal offence;”
This amendment provides a definition for the term “child criminal exploitation”.
Amendment 52, in clause 1, page 2, line 6, at end insert—
“(c) ‘adult sexual exploitation’ means conduct by which a person manipulates, deceives, coerces or controls another person to undertake sexual activity.”
This amendment would provide for a statutory definition of adult sexual exploitation.
The Minister of State, Ministry of Justice (Edward Argar)
Amendment 17 seeks to include in the definition of a victim those who have experienced child criminal exploitation and have suffered harm as a direct result. I am grateful to the hon. Member for Rotherham for raising this issue, which the Government agree has a devastating impact. This morning, right hon. and hon. Members did what this House does well: they gave a voice to the voiceless.
I want to reassure hon. Members that large elements of the amendment are encapsulated in the Bill, and I hope I am able to offer something that goes at least some way to satisfy the hon. Lady and the hon. Member for Cardiff North. The Government are committed to tackling county lines and associated child criminal exploitation, and outside the Bill we have invested up to £145 million over three years to crack down on criminal gangs exploiting children and young people.
In addition, as part of the county lines programme, the Government continue to support victims of child criminal exploitation. We have, for example, invested up to £5 million over three financial years—2022 to 2025—to provide support to victims of county lines exploitation and their families. That includes a specialist support and rescue service provided by Catch22 for under-25s in priority areas who are criminally exploited through county lines to help them to safely reduce and exit their involvement. It also includes a confidential national helpline and support delivered by Missing People’s SafeCall service for young people and their families.
As the shadow Minister said, it is important to remember that although county lines is often the first issue to catch the attention of the media or this House, child exploitation goes way beyond that crime. We are therefore also targeting exploitation through the Home Office-funded prevention programme, delivered by the Children’s Society. That programme works with a range of partners to tackle and prevent child exploitation regionally and nationally.
I assure hon. Members that children who have been exploited for criminal purposes are indeed victims in the context of the Bill if the conduct they have been subjected to meets the criminal standard. Regardless of whether the crime has been reported, charged or prosecuted, those victims are already covered under part 1 of the Bill and the victims code.
Child criminal exploitation is already captured by a number of criminal offences under the Serious Crime Act 2007, the Misuse of Drugs Act 1971 and the Modern Slavery Act 2015. However, as the hon. Member for Rotherham highlighted, in some cases the exploitative conduct may not itself be criminal. The measures in part 1 of the Bill have specifically and fundamentally been designed for victims of crime and seek to improve their treatment, experiences of and engagement with the criminal justice system. Therefore, where the criminal exploitation is exactly that—criminal—the victims are already covered by the Bill’s definition of a victim of crime.
The definition of a victim, as I said previously, is deliberately broad. Within reason, we are seeking to be permissive, rather than prescriptive, to avoid the risk that specifying particular subgroups could inadvertently exclude those who do not fall into specific descriptions and definitions.
Amendment 18 seeks to provide a definition for child criminal exploitation. The Government recognise that the targeting, grooming and exploitation of children for criminal purposes is deplorable, and we share the hon. Member for Rotherham’s determination to tackle it. The Government have already gone some way to defining child criminal exploitation in statutory guidance for frontline practitioners working with children, including in the “Keeping children safe in education” and “Working together to safeguard children” statutory guidance. We have also defined child criminal exploitation in other documents, such as the serious violence strategy, the Home Office child exploitation disruption toolkit for frontline practitioners, which was updated in July last year, and the county lines guidance for prosecutors and youth offending teams.
The Modern Slavery Act 2015 states that when children who are under 18 commit certain offences, they are not guilty if they were committed as a direct result of exploitation. Prosecutors must consider the best interests and welfare of the child or young person, among other public interest factors, starting with a presumption of diverting them away from the courts where possible.
Sarah Champion (Rotherham) (Lab)
The Minister highlights the problem: there are lots of different documents with lots of different Departments and support teams where the Government have felt comfortable defining child criminal exploitation, and there is fragmentation across Government. The Bill offers the opportunity to define child criminal exploitation so that it is seen clearly that such children are victims of that exploitation. I will be frank with the Minister: the victims ought to be recognised in the Bill, but they are not. My hon. Friend the Member for Cardiff North and I are trying to use this as an opportunity to force the Government’s hand to make that definition, so that any person in the public or private sector who sees those children can understand that they are victims.
Edward Argar
When I conclude in a moment, I hope that I might have given the hon. Lady a little more reassurance. In respect of her specific point, the Government have previously explored the introduction of a statutory definition of child criminal exploitation with a range of operational and system partners. They and the Government concluded that the existing arrangements allow sufficient flexibility to respond to a range of circumstances while still ensuring actions when that consideration was undertaken.
I reassure the hon. Members for Rotherham and for Cardiff North that we continue to keep under review the issue and the legislation. The previous consultation with partners suggested that the right tools, powers and offences were already in place to tackle the issue.
Sarah Champion
I wonder who the Minister is talking to, because this amendment is supported by the children’s sector, including the Children’s Society, the NSPCC and Barnardo’s. The children’s sector wants this, so I do not understand who he is talking to who does not.
Edward Argar
I mentioned operational partners, and in this context, that refers to partners in the criminal justice system, such as the prosecution authorities, the police and others. I take the hon. Lady’s point about the wider stakeholder and sector support. If she allows me to make a little progress, we will see if it reassures her sufficiently.
Turning to amendments 51 and 52, amendment 51 seeks to ensure that persons who have experienced adult sexual exploitation are explicitly referenced in the definition of a victim. Adult sexual exploitation could be considered to consist of numerous criminal acts, some of which include human trafficking, controlling and coercive behaviour, causing or inciting prostitution for gain, controlling prostitution for gain, and rape and other serious sexual offences. I reassure hon. Members that adults who have been subjected to such criminal conduct are victims under part 1 of the legislation and under the victims code. My concern is therefore that the amendments would duplicate the existing coverage of the definition of a victim of crime. Again, the definition is deliberately broad to avoid inadvertently excluding a particular group or victim through being overly prescriptive.
Amendment 52 is intended to create a definition of adult sexual exploitation. Acts that can constitute adult sexual exploitation are, again, already covered by a number of existing offences.
Jess Phillips (Birmingham, Yardley) (Lab)
While they are covered by a number of different offences, much like domestic abuse, there is no charge or crime of domestic abuse, yet the Government felt it important to define domestic abuse in the Domestic Abuse Act 2021 for all the same reasons that my hon. Friend the Member for Rotherham tried to point out: it is currently written nowhere in any Government guidance, or any strategy to tackle adult sexual exploitation. That is what the amendment is intended to address.
Edward Argar
I am grateful to the hon. Lady. She may well push me in a slightly different direction, but I am always a little cautious of seeking to read across a precedent in one piece of legislation to a range of other areas. There may be occasions when it is universally applicable, but in other cases I would urge a degree of caution.
We have yet to see unequivocal evidence that a single definition or approach would better achieve delivery of our commitment than the current approach. However, I am happy to discuss it further and work with the hon. Member for Rotherham, the shadow Minister, the hon. Member for Cardiff North, and others between Committee stage and Report. As is the nature of the Committee stage, the amendments were tabled a few days ago—last week—and inevitably, when something significant is suggested, it is important to reflect on that carefully. I intend to reflect carefully on the points that have been made. I will not pre-empt the conclusions of my reflections, but I will engage with the hon. Member for Rotherham, and the shadow Minister if she so wishes, to see what may be possible between Committee stage and Report. On the basis of that commitment to engage, I hope that the hon. Member for Rotherham and the shadow Minister might, at this point, consider not pressing the amendments to a Division.
Anna McMorrin (Cardiff North) (Lab)
I thank the Minister for his response and the Committee for this debate on child criminal exploitation. I particularly thank my hon. Friend the Member for Rotherham for tabling the two critical amendments that look at adult exploitation as well as child criminal exploitation. She made excellent, and really quite emotive, points about a victim of child sexual exploitation, of course due to coercion and control, reaching the age of 18, when it is suddenly questioned as “unwise choices”. I appreciate the points that the Minister made. He appreciates that there is a real issue. As I set out earlier, there is widespread concern among all the agencies and charities working on this that child criminal exploitation takes a variety of forms. Ultimately, the grooming and exploitation of children into criminal activity needs to be addressed.
To take up the Minister’s point about using one statutory definition, at the moment safeguarding partners are working to so many different understandings, as my hon. Friend the Member for Rotherham said, of what constitutes criminal exploitation that there is no meaningful or consistent response across criminal justice agencies and safeguarding partners, which is critical when dealing with such matters.
I appreciate that the Minister is prepared to work together, and I hope that he has listened to our arguments. It sounds as though he is coming to the agreement that we will work together to address this matter in the Bill. Therefore, on reflection and having heard those points today, I will seek to bring this proposal back at a later stage of the Bill but will not press it today.
Sarah Champion
I thank the Minister. We have worked together for a long time, and he knows that I can be like a dog with a bone when it comes to things like this. I will take what he has said absolutely at face value. I am really grateful for the opportunity to explore the matter with him further, and because of that, I will not press my two amendments at this point.
Anna McMorrin
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 46, in clause 1, page 1, line 16, at end insert—
“(e) where the person is the child of a person posing sexual risk to children.”
This amendment would include children of a person posing a sexual risk to children (that is, paedophiles (including perpetrators of offences online), suspects or offenders) as victims.
I don’t get out much, Sir Edward—and neither do you, because of that! I ask the Committee to listen to my speech on this issue with an open mind, because when I first came across it, it took me a little time to get my head round it, but to me now, it seems the most obvious thing. I am talking about recognising the children of paedophiles as victims. That is what my amendment seeks to make happen. Just as we have now—I thank the Minister and the Ministry of Justice—made a huge step forward in defining children born of rape as victims in this legislation, so we need to ensure that other secondary victims will also be entitled to rights under the victims code. The children of any paedophile are disproportionately impacted when their parent is investigated, charged and jailed, and I make a plea for them to be considered within the definition of victims.
Just like domestic abuse, the illegal activity is committed, most often, within the family home—the child’s “safe space”. Social services view the parent as potentially posing a sexual risk to any child from day one of an investigation, not from a guilty verdict. I will give the Committee an example from my constituency. About five years ago, a lot of single mothers were coming to me with real concerns about the heavy-handedness of social services around child protection—their child’s protection. They were really confused as to why social services were doing this. When I intervened on their behalf, I realised that it was because the other parent of the child was being investigated for—in this case—organised child sexual exploitation. Social services could not tell the mother what was going on, for fear of tipping off the other parent, but they had serious safeguarding concerns in respect of that parent in that house because of the father’s activities. This is a very real thing that happens; it has a very real basis.
Amendment 46 is crucial, because it specifically identifies children of a person posing sexual risk to children. These people are known as PPRC—persons posing a risk to children—by the police when they are under investigation and not just once they have been charged. The family unit structure, including the household economics, is generally impacted in a dramatic way—irrespective of the outcome of the investigation—because of the immediate protective measures put in place by agencies. For the family’s safety, the nature of the investigation is almost always kept confidential, thus increasing the vulnerability of these children within the whole secrecy around CSA. Investigations and convictions shape the child’s childhood, as interactions with the parent are controlled by restrictions imposed by the judicial system. The child loses all autonomy within the relationship with the suspect or offending parent, for safeguarding purposes—which we can completely understand—until they are over the age of 18.
Negative community judgment for close associates of CSA suspects is highly prevalent and can be magnified by media coverage at the court. If we think about our local papers, once someone is charged with such crimes, their name, address and photos all get into the public domain, whether by media, once the conviction has happened, or most likely by Facebook and well-meaning neighbours trying to protect their own children. The stigma that causes for the child is untold.
I have worked with the survivor Chris Tuck for many years. She is an active campaigner on child protection. She has asked me to read her case study about what happened to her:
“I grew up in 3 domestic violence households where witnessing and experiencing abuse every day was the norm.
My dad and step mum were not good for each other or to us children. The abuse intensified via domestic violence and child abuse.
This chaotic dysfunctional abusive home life led to us being vulnerable to abuse outside the family home. I was sexually abused by a school bus driver in 1979…In 1980/81 my dad George Frances Oliver was convicted of child sexual abuse against some of the children in the household (not me).
I remember very clearly when my dad was arrested for his crimes.
It was an odd day; 3 of us children came home from school and dad was lying on the sofa reading. It was eerily quiet, my step mum, my sister and stepsisters were not there.
We were just speaking to dad about this fact when there was a loud crashing noise and lots of shouts of ‘Police! Police!’.
The police stormed into the room and arrested my dad, it was very frightening to witness and caused us a lot of distress. We did not know what was happening.
I remember the police taking us 3 children to our eldest stepsisters’ house where my step mum, other stepsisters and sisters were waiting.
That is where I was told what my dad had done. I didn’t believe it. I couldn’t believe it.
In my head I was trying to reconcile what the school bus man had done to me and now my dad had done those things and worse to other children in the house.
I felt sick, I felt dirty, I felt shame. I felt betrayed and let down by my dad. The man I loved at the time.
Dad was put on remand and eventually convicted of his crimes. I find out about this at school, in the playground. One day a boy shouted out ‘your dad is a paedo....dirty paedo’.
I didn’t know what that word meant. But I knew it was bad by the way it was said and I knew what my dad had done. I had experienced a little of what my dad had done via my own experience of sexual abuse and the internal examination I had at the Police station.
Dad’s sentencing had been written up in the local paper. Again, it felt like everyone knew. Everyone was judging me, us, for the crimes committed by my dad.
Again, I felt sick, I felt dirty, I felt shame. I felt bad to the very core of my being. This I carried with me well into my adulthood.
Again, no support was given to any of us as children and young people.
The legacy of my dad being a convicted paedophile lived with me into my mid 40s when I paid for specialist professional help and support to deal with the trauma from deep unexpressed feelings and emotions.
When I left home at nearly 16, I wrote my childhood off, I never told anyone about anything. I put on a mask for over a decade and I tried to build a new life for myself. I battled with bulimia and anger management throughout my teens and twenties.
If I had been classed as a victim, as a child and young person and given the help and specialist support at the time of each incident throughout my life I would not have had the hardship of dealing with the trauma and ill-health (mentally and physically) I have experienced as a result during my adulthood.
Recognising children and young people as victims of crime perpetrated through association needs to be recognised because there is a trauma impact as I have described.
Just knowing what is happening when it comes to the perpetrator and their movements—where they are imprisoned, when they are going to be released and where—is a must for the peace of mind of all involved.”
That experience has become even more common with online child sexual offences, which have increased dramatically. The trauma for the child usually begins once police execute a search warrant of the family home, often referred to as “the knock”, after the police have received the information regarding the online suspect. That, I would say to the Minister, would be the ideal point to intervene to prevent further trauma, but currently that is not happening. Records for 2021 show that there were 850 knocks a month. Children were present for 35% of those knocks. That compares with 417 knocks per year in 2009-10, and I fully expect those numbers to keep on going up, with all the police are telling us about the exponential rise of online child abuse.
Children are unseen victims of this crime, but are not recognised as such or given the support they need. Often, families do not receive information about the offence, court proceedings or sentencing until they are told by the offender, if they are told by the offender. If the children were defined as victims, they and their parents would be entitled to receive such information. Having the victims code apply here would address some of the key issues for children and for non-offending parents, including information from police and access to support services.
Let us be honest: the knock disproportionately affects women, who are often forced to give up their job as a consequence, take time off sick, move home, supervise access, manage childcare, manage supervision and take on the burden of minimising the suspect’s risk of suicide or reoffending. Women are effectively treated as a protective factor, but they have no protection themselves.
I have worked on the amendment with Talking Forward, a charity that funds peer support for anyone whose adult family member has been investigated for online sexual offences. It is much more common than Members realise. Currently, three police forces refer families automatically to Talking Forward, but that could be broadened out nationally, if the amendment is accepted. Lincolnshire police now have a dedicated independent domestic violence adviser-type role for such families. Again, if the amendment is accepted, that could be rolled out more broadly to provide specialist support.
The first step must be to recognise children of child sexual abusers, whether physical or online, as victims. That will reduce costs in the long term, whether that is by ensuring children have immediate support or reducing costs to the family courts. I ask the Minister to accept this amendment.
Edward Argar
As the hon. Lady set out, amendment 46 would include persons who have suffered harm as a direct result of being a child of a person who poses a sexual risk to children, for example a paedophile, in the definition of a victim. I am grateful to her for raising this important issue and I reassure her that the Government absolutely sympathise with the challenges faced by the unsuspecting families of sex offenders and those who pose a sexual risk to children.
If family members in these circumstances have witnessed criminal conduct, they are of course already covered by the Bill’s definition of a victim—that is, if they have been harmed by seeing, hearing or otherwise directly experiencing the effect of the crime at the time the crime happened. I think the hon. Lady would like to go somewhat more broadly, to those who may not have been there at the time or have directly witnessed the crime, but who may still suffer the impacts of that criminal behaviour. I know that she is interested in support more broadly for the families of offenders and those impacted.
As the hon. Lady rightly said, that cohort would not come within our definition of a victim, which is deliberately crafted in both the Bill and the victims code to be designed for those who have been harmed directly by the crime in question and therefore need the broader entitlements in the code to navigate the criminal justice system, as well as to receive support. On this occasion, therefore, I must resist the broadening of the scope of clause 1 that the amendment would bring.
Maria Eagle (Garston and Halewood) (Lab)
The Justice Committee, in its pre-legislative scrutiny of the clause, did ask the Government to extend the coverage of these provisions to include children born of rape as secondary victims, and they responded positively. Is there a difference between the case that my hon. Friend the Member for Rotherham made for the children of paedophiles and the concession—that is the wrong word for it; it is technically correct, but I am not trying to suggest that the Government have given in—made in accepting the Justice Committee’s suggestion that children born of rape should be included? Is there a technical difference, because I am failing to see it at the moment?
Edward Argar
The technical difference, or the difference as we see it, is that in the case of the Justice Committee’s PLS recommendation the individual was born as a direct consequence of a criminal act. In the case to which the hon. Member for Rotherham referred, the individual is not experiencing something as a direct consequence of a criminal act, but there are of course impacts on them. That is the difference that we draw, but it does not mean that this cohort is not deserving of support on their own terms, and I will touch briefly on what is available.
His Majesty’s Prison and Probation Service funds the national prisoners’ families helpline, which provides free and confidential support for those with a family member at any stage of their contact with the criminal justice system. There are also several charities—I suspect that the hon. Lady works with them on these issues—that provide specific support for families affected by the actions of a family member, including support for prisoners, people with convictions, and crucially their children and families, and support for families that have been affected by sexual abuse.
We will continue to consider how best to support and protect those impacted by crime as well as victims of crime, who are directly covered by the Bill. I therefore gently encourage the hon. Lady not to press her amendment to a vote at this stage. She may wish to return to it, but I will continue to reflect carefully on what she has said. We sit and listen, but we may miss some nuances, so I will read the report of what has been said carefully.
Sarah Champion
I am grateful to the Minister for keeping an open mind. What is needed most is information on the criminal justice process for those family members, which would automatically be afforded under the victims code. I am grateful for his offer to read the report and see whether there is something that we can do. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jess Phillips
I beg to move amendment 54, in clause 1, page 1, line 16, at end insert—
“(e) where the death by suicide of a close family member of the person was the result of domestic abuse which constitutes criminal conduct.”
We have all had a long time while the Bill has been going through to campaign, successfully, on various things through various means, including, as my right hon. Friend the Member for Garston and Halewood mentioned, around the pre-legislative scrutiny. Those of us who have been fighting for child victims born of rape were pleased to see that concession. Another area that many of us have campaigned on is recognition of people who are victims of homicide but not direct victims. If someone’s daughter is murdered, they are a victim of that crime. Both those concessions have come about, and not dissimilarly to my hon. Friend the Member for Rotherham I wish to push the envelope a little further, and talk about those who die by suicide as a direct result of being a victim of domestic abuse.
I met a mother at a memorial service for violence against women and girls. Just yesterday, she emailed me. Her daughter died in 2018. She wrote:
“If my daughter hadn’t met him, she would still be alive, her children still have a mother, me my precious only daughter…Why is the associated link between ‘domestic abuse’ and ‘suicide’ ignored? Overlooked are the ‘compensating’ mechanisms—substance abuse, alcohol, ‘mental health issues’ then used by so called ‘professionals’ as the reason ‘why’ they have taken their lives...the link is the perpetrator and the victim, NOT the substances. They are often used by the victim to ‘escape’ from the relentless mental, physical abuse and torture. They don’t want to die, merely ‘escape’ from the traumatic situations. They are in Hell.”
Families who have lost loved ones to suicide following domestic abuse should be recognised as victims, in the same way as those who lose family members to murder are supported.
Ellie Reeves (Lewisham West and Penge) (Lab)
My hon. Friend is making a powerful speech. I want to mention the family of Gemma Robinson. Gemma was the victim of a horrific assault by a former boyfriend. She took her own life in 2020 due to the fear of facing her attacker in court. Gemma’s sister, Kirsty, has spoken about the devastating impact of Gemma’s death on the whole family. The family were then left to face the sentencing of the perpetrator, Gemma’s inquest and the domestic homicide review all on their own, without support. Does my hon. Friend agree that Gemma’s case highlights why it is so important that relatives in these types of cases are recognised as victims?
Jess Phillips
I thank my hon. Friend. Our hearts go out to Gemma’s family. That is exactly the reason why I tabled the amendment and why the Labour party seeks to have these people recognised. That recognition would allow such relatives to access the support and care they need, and begin to shine a light on a shamefully under-scrutinised and ignored sphere of criminality and wrongdoing.
We do not need to look much further than the facts of the cases and the experiences of the families to realise that those relatives should be recognised and have the support and guidance that that would, or should, bring. The criminality and wrongdoing in those cases, the interaction with court processes and the justice system, and the trauma experienced, make the argument for inclusion clear. Although in many cases, they may not ever get a criminal sanction against the perpetrator, there are inquests and domestic homicide reviews, as my hon. Friend said. Honestly, to be a victim in this country, whether that is one recognised by this Bill or not, is hard work. Imagine doing that work when your daughter or your sister has died.
There are other concerns about why this recognition is important, which are to do with unchecked criminality and wrongdoing. In these heartbreaking cases, where the deceased took her own life—I use the pronoun “she” due to the gendered nature of domestic abuse—there is clear evidence that she was driven to suicide by the abuse she suffered at the hands of a domestic abuse perpetrator.
The feelings of injustice for bereaved families when the abuser escapes all responsibility for the death must be unbearable. Families find themselves in an agonising position of having watched their loved one experience horrendous criminality—violence, abuse, coercive control—and the unrelenting horror day after day, hour after hour, until their loved one was driven by desperation to take their life. Currently, in those cases, criminality is going completely unchecked, un-investigated and unchallenged. Perpetrators remain free to harm again and again. Bereaved families are left feeling failed by the justice system, and the opportunities to address issues and learn lessons are being missed.
There has been one successful prosecution of that type of case. In 2017 R v. Allen, the perpetrator pleaded guilty to manslaughter—if we are relying on cases where men plead guilty, we are on a hiding to nothing—in respect of the death of his former partner, Justene Reece, who had taken her own life after experiencing years of coercive control, stalking and harassment. Justene had left a suicide note explaining that she could not endure her stalker’s behaviour any longer. That case is a clear precedent.
Janet Daby (Lewisham East) (Lab)
Only last week, we heard from the Domestic Abuse Commissioner, who said that the broader the definition is, the better it will be for victims.
Jess Phillips
Absolutely. I have worked with the Domestic Abuse Commissioner. There is a huge area of hidden homicide that we are concerned about, and suicide is one of the areas where we are just not getting the data about how many women are dying because of domestic abuse, unless they are directly killed.
The case that I described provides a clear precedent, and there is hope that more cases will follow, but currently families find very limited access to such justice and answers. It is clear that for such prosecutions to happen, police officers must proactively undertake evidence gathering for domestic abuse offences post death, for example by listening to the concerns of family members, taking witness accounts, reviewing records held by medical, statutory and third sector agencies, and looking through financial records and electronic communications. This is not commonplace in cases of domestic abuse where the victim is alive. It is certainly not commonplace in cases where the victim has died.
The police seem to have a distinct lack of professional curiosity in such cases. In research by Advocacy After Fatal Domestic Abuse and the University of Warwick, titled “An Analysis of Domestic Homicide Reviews in Cases of Domestic Abuse Suicide”, families reported police failing to investigate adequately, police not acting on the information given by families and friends about perpetration of domestic abuse, evidence not being captured, evidence and personal effects of the deceased being returned to the surviving partner or ex-partner, police not considering domestic abuse when attending suicide cases, and a lack of senior police oversight in investigations of suicides.
One family member included in the research submitted 74 exhibits of screenshots and photographs in the aftermath of her daughter’s death, but felt dismissed out of hand by the officer in charge when she presented them. She said:
“I said to him, I’ve brought this because I think it’s important information. Every time he took a piece of paper off me…[he] slammed it on the desk. I said to him, are you not going to look at them? He said, there’s no point…it’s irrelevant…your daughter took her own life…It was like she wasn’t important when she was alive and…she’s not important now she’s dead.”
Other institutions also deny these families any form of justice or an understanding of what happened to their loved one. Take domestic homicide reviews. In many cases, even though the statutory criteria are met, families have to fight tooth and nail to ensure that a domestic homicide review is commissioned, normally only with the help of an advocacy organisation such as AAFDA. Inquests and coroners courts often demonstrate a lack of understanding of domestic abuse. In the research I mentioned, one DHR chair reflected that, in their experience,
“Coroners often see...women as kind of weak, they’re so misguided and they take their own lives, and they should have stood up for themselves and left…So you get that kind of reference to, you know, extreme attention-seeking. And it’s not that. It’s that you’re utterly worn down by someone who often is so cleverly manipulative…I don’t think Coroners understand that at all and the barriers to leaving and all those sorts of things…I don’t think they have an understanding of how all these little things are really damaging.”
Those examples of interactions with criminal justice systems or inquest procedures clearly highlight the crucial need for advocacy and support for families who lose a loved one to suicide following domestic abuse. One family member explained that
“you’re thrust, in a nanosecond your life flips on its axis, and not only are you dealing with the impact of losing someone so precious, especially in circumstances like this…you have to learn a whole new language…and then there’s timeframes, you’ve got to have this done by that…you’ve got this agency asking you for that, you’ve got someone questioning you, the police are calling you up”.
Research has found that having access to support and advocacy is overwhelmingly positive for families, helping them to feel empowered, but for most that support comes about only by luck or lengthy effort on their part. The mental health impact must not be underestimated. The trauma experienced by families is unimaginable. As one professional who works with such bereaved relatives put it, losing a loved one to suicide is
“one of life’s most painful experiences. The feelings of loss, sadness, and loneliness experienced after any death of a loved one are often magnified in suicide survivors by feelings of guilt, confusion, rejection, shame, anger, and the effects of stigma and trauma. Furthermore, survivors of suicide loss are at higher risk of developing major depression, post-traumatic stress disorder, and suicidal behaviors, as well as a prolonged form of grief called complicated grief. Added to the burden is the substantial stigma, which can keep survivors away from much needed support and healing resources. Thus, survivors may require unique supportive measures and targeted treatment to cope with their loss.”
It is clear that families who find themselves in that devastating situation desperately need more support to navigate the complex legal processes and get access to the support they need.
Edward Argar
I am grateful to the hon. Member for Birmingham, Yardley for raising this important issue and for referring, as the right hon. Member for Garston and Halewood did, to pre-legislative scrutiny. I hope to have given Committee members some encouragement that on occasion I agree to changes, and perhaps to a different approach from that in the original draft of the Bill.
As the hon. Member for Birmingham, Yardley set out, her amendment 54 would extend the definition of a victim in the Bill explicitly to include families impacted by the death by suicide of a loved one as a result of domestic abuse. In her remarks, the hon. Lady quite rightly went wider than that, highlighting investigatory issues and broader prosecutorial issues. I have—as, I suspect, does every member of the Committee—huge sympathy for the families in the position that she set out. Before I turn specifically to the impact of her amendment, and I wish to touch on some of the support available for them,.
The Ministry of Justice provides police and crime commissioners with grant funding to commission local, practical, emotional and therapeutic support services for victims of all crime types, based on their assessment of needs. The Department for Health and Social Care has committed to publishing a new national suicide prevention strategy later this year and is engaging widely across the sector to understand what further action can be taken to reduce cases of suicide. The strategy will reflect new evidence and national priorities for suicide prevention across England, including actions to tackle known risk factors and targeted actions for groups at particular risk or groups of concern. An additional £57 million is being invested in suicide prevention by March 2024, through the NHS long-term plan.
I agree with the hon. Lady about the importance of the issue. With regard to her amendment, we are not convinced that explicitly extending the definition of a victim of crime in the Bill and the code is the right approach to appropriately support the families. Part 1 of the Bill specifically sets out how victims who have suffered harm as a direct result of criminal conduct are treated by and supported to engage with the criminal justice system. Our view is that that group is largely covered by the Bill’s definition of the bereaved family of a person who has died, including by suicide as a direct result of domestic abuse, which is captured by clause 1(2)(c):
“where the death of a close family member of the person was the direct result of criminal conduct”.
In the context, domestic violence is criminal conduct. I appreciate—this is potentially where the nuance lies, and why the hon. Lady might be pushing for greater clarity—that that will be fact-specific for each case in the circumstances. It is a complicated area and each case will be complicated but, as I say, we believe that clause 1(2)(c) captures this.
I know that we have discussed the need for clarity and awareness about entitlements among victims and agencies. As I am sure the hon. Member for Birmingham, Yardley is aware from her shadow ministerial role, the Government are consulting on and clarifying the position in the domestic homicide review to formally recognise this cohort of victims. With her permission, I will gently encourage her not to press her amendment at this point, but in the context of the broader work being done I hope she will allow me, in the short term, to write to her with greater clarity on our interpretation of clause 1(2)(c)—she may wish to challenge that in the future, of course; she is entitled to—and to see if we are able to factor in the broader work being done before we reach Report.
Jess Phillips
I thank the Minister. I would absolutely welcome it if he wrote to me and the Committee about exactly how clause 1(2)(c) encompasses what I seek, so that those families have an opportunity. It is good when Ministers say things in Committee that we can use to ensure that families get support. I will withdraw the amendment at this stage. I am not always especially keen on the Government, but the level of progress in the area of hidden homicides, certainly under the previous Home Secretary, is to be admired. I do not think that the Government are without concern on the issue of suicide in cases of domestic abuse. Thanks to what the Minister says, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 63, in clause 1, page 1, line 16, at end insert—
“(e) where the person is a child under the age of 18 who has suffered harm and is a victim of, or a witness to, criminal conduct.”
The Chair
With this it will be convenient to discuss amendment 42, in clause 2, page 2, line 25, at end insert—
“(3A) The victims’ code must make provision for services for victims who are children under the age of 18 who have suffered harm and are victims of, or witnesses to, criminal conduct.
(3B) In determining what services are appropriate under subsection (3A), the Secretary of State must have regard to the provisions of the Youth Justice and Criminal Evidence Act 1999 in respect of children under the age of 18.”
This amendment would require the victims’ code to contain specific provision for children who are victims or witnesses, in line with the provisions of the Youth Justice and Criminal Evidence Act 1999.
Sarah Champion
Amendments 63 and 42 are supported by the NSPCC; I am grateful for its help, which has enabled me to table them. They are designed to ensure that all children under the age of 18 who have experienced harm as a victim of or witness to a crime are within the scope of the Bill and have access to special measures in line with the existing provisions on vulnerable witnesses in the Youth Justice and Criminal Evidence Act 1999.
The inclusion of children as victims of domestic abuse within clause 1, in accordance with the Domestic Abuse Act 2021, is welcome. However, children experience many different forms of abuse, exploitation and serious violence, as shown by the remit of the Bill. In many cases, children can experience more than one form of abuse at the hands of one or multiple perpetrators.
The scale of child abuse in this country, as we know, is devastating. The Centre of Expertise on Child Sexual Abuse estimates that, based on the available evidence, one in 10 children in England and Wales are sexually abused before the age of 16. At a conservative estimate, the number of children sexually abused in a single year is around half a million. In 2021-22, there were more than 16,000 instances in which local authorities identified a child sexual exploitation case as a factor at the end of an assessment by social workers. There were 11,600 instances in which gangs were a factor, and 10,140 in which child criminal exploitation was a factor. Research by the Children’s Commissioner found that 27,000 children were at high risk of gang exploitation but had not been identified by services, and were therefore missing out on vital support to keep them safe.
For the Bill to truly support all young victims and witnesses, clause 1 must refer to the eligibility criteria in the Youth Justice and Criminal Evidence Act 1999, which provides for enhanced rights and special measures for those under the age of 18 at the time of the offence. The victims code of practice also recognises the issue, under its definition of “vulnerable or intimidated” victims, by affording eligibility to under-18s to have access to enhanced rights and special measures. Special measures include, but are not limited to, screening witnesses from the accused, providing evidence by live link, the removal of wigs and gowns, and video-recorded cross-examination.
However, despite the Crown Prosecution Service stating that special measures are available for vulnerable and intimidated witnesses to give their best evidence in court—and to help to relieve some of the stress associated with giving evidence—the Victims’ Commissioner has found that young victims were neither informed about nor in receipt of all their rights under the victims code, including access to special measures. For many children, the current justice system is simply not supporting their needs. That often compounds the abuse that they have suffered.
In oral evidence last week, this Committee heard the Children’s Commissioner explain that children and young people do not necessarily understand or report their experiences in the same way as adults. NSPCC research has previously found that special measures were seldom used. Being accompanied by a neutral supporter of the young witness’s choice, closing the public gallery in sexual offence cases, combined special measures—such as preventing the defendant’s view of the child on the live link—and giving evidence over a live link, away from the trial, were sadly rarely used. Some areas had no non-court remote sites at all.
Our courts desperately need the funding and resources to ensure that there are suitable facilities accessible for all victims’ needs and preferences. I welcome the roll-out of section 28 pre-recorded evidence in all courts, but it is key that the victim or witness can provide their evidence how they choose. For children, we must ensure that that is an informed choice.
NSPCC research also found that 150 witnesses waited an average of 3.5 hours at magistrates courts or youth courts and 5.8 hours at a Crown court, despite the victims code committing to ensure that victims giving evidence
“do not have to wait more than two hours”.
It is imperative that all victims under the age of 18 be recognised as eligible for special measures under section 16 of the Youth Justice and Criminal Evidence Act 1999, so that they are recognised by all relevant agencies as vulnerable and therefore receive their enhanced rights. We need to actively include children within the definition of a victim so that they can be afforded the appropriate support to which they are entitled, in a way that they can understand and access. Will the Minister explain whether he will take any additional steps, either in the guidance or separately from the proceedings of the Bill, to ensure that all child victims and witnesses can access their rights, particularly special measures?
Edward Argar
Amendment 63 seeks to add wording to the definition of a victim to explicitly state that it includes children. I reassure the hon. Lady that children who are
“a victim of, or a witness to, criminal conduct”
are already covered by the definition of a victim under part 1 of the Bill, and included in the current victims code. The relevant provision of the Bill—clause 1(2)(a)—says
“where the person has seen, heard, or otherwise directly experienced the effects of, criminal conduct at the time the conduct occurred”,
and that is not an age-specific or age-exclusive point; it is universally applicable.
The definition of a victim covers individuals, including children, who have suffered harm as a direct result of being subjected to a crime. It also covers persons, including children, who have suffered harm as a direct result of certain circumstances, including the death of a close family member as a direct result of criminal conduct, and being born from rape. The hon. Lady quite understandably made a number of broader points about the operation of the criminal justice system and the courts. I will confine my remarks to the amendments, but I note those points.
The Bill’s definition of a victim has been amended, as the hon. Lady touched on, to align with the full definition of domestic abuse in part 1 of the Domestic Abuse Act 2021, which will also be set out under the new victims code. The purpose is to have clarity and proper read-across between different pieces of legislation. The Bill therefore defines child victims who witness or experience the effects of domestic abuse as victims in their own right.
Individuals—again, including children—who witness a crime are covered by the Bill. We have described that as seeing, hearing or otherwise directly experiencing the effect of a crime at the “time the conduct occurred”, which ensures that we do not exclude individuals who have been harmed by witnessing a crime even if they were not physically present when it occurred. For example, they may have seen it occur online as it was happening if it was being streamed or similar.
We recognise that individuals will be affected differently after witnessing a crime. That is why we have specified that an individual will be defined as a victim only if they have suffered harm as a direct result of witnessing criminal conduct. In that context, amendment 63 is unnecessary as children are already covered by the definition in the Bill, which, as I said, also aligns with the DA Act 2021.
Amendment 42 would require the victims code to contain specific provision for children who are victims or witnesses. Again, I reassure the hon. Lady that the definitions in both the Bill and the victims code include adults and children alike. Children are also explicitly recognised in the current victims code as vulnerable victims. Some of her points—for example, on how a court case is run and the length of time given for evidence—will, to a degree, be down to the way a judge runs that particular case with judicial independence and discretion. However, that explicit recognition in the victims code means that children have entitlements and “enhanced rights”, such as getting information about key decisions more quickly.
That recognition is set out in the enhanced rights section of the code, which specifies that victims are “eligible for enhanced rights” if they are
“under 18 years of age at the time of the offence”.
Young people are automatically eligible for the special measures included in the Youth Justice and Criminal Evidence Act 1999, which the hon. Lady mentioned, when they are giving evidence. Such measures can include communication assistance through a registered intermediary, giving evidence by live link or having their evidence pre-recorded, subject to the agreement of the court or the judge.
I fully support the aim of making the victims code as clear as possible about the different and distinct needs of children. The hon. Lady is aware that we will be consulting on a new victims code after this Bill gains Royal Assent, and we have published a draft to inform the debate prior to that formal consultation. This is one of the areas that we will be focusing on in reviewing and updating that code.
Sarah Champion
The Minister is right to say that the special measures are subject to a judge’s discretion. I wonder whether, when he is looking at updating the guidance and the code, he could look quite closely into that, because of the example in Rotherham, where we have the ongoing past cases of grooming gangs. We are finding that the National Crime Agency tries to go for one judge, who is very aware of the need for special measures and very supportive of that. The concern is that, across the country, other judges are more subjective with regard to whether they think special measures are an automatic right and what the threshold is. Therefore, when the Minister is doing his review, will he look specifically at the guidance to judges about whether to allow special measures?
Edward Argar
I hope that the hon. Lady will forgive me if I resist the temptation to stray into areas that are properly judicial—related to judicial independence and, indeed, training and the Judicial College. I am very cautious about trespassing on judicial independence. She has made her point on the record, but as a Minister I have to be a little cautious in that respect.
The Children’s Commissioner, Dame Rachel de Souza, when she gave evidence to the Committee last week, welcomed the fact that work with her office had already begun. We are looking forward to working with her and others—including, indeed, in this House—as we prepare a further draft code for consultation. Given that the current code already includes provision for child victims and witnesses and that we have made a commitment to make that clearer in the new code, and given the definition in clause 1(2)(a), I hope that I will persuade the hon. Lady not to press her amendment to a Division at this point.
Sarah Champion
I thank the Minister for everything that he has said. I have comfort at this point, so I will not press the amendment. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 40, in clause 1, page 2, line 5, after “that” insert
“no report of the conduct has been made to a criminal justice body and that”.
This amendment aims to ensure that a person could meet the definition of a victim without needing to make a report to a criminal justice body.
I am nearly done with my amendments—on this clause. [Laughter.] Sorry; but I will say up front that this is a straightforward probing amendment, which aims to ensure, in relation to determining whether a person is a victim for the purposes of this legislation, that the scope is expanded to include those who do not choose to report an offence to the criminal justice system. Clause 1 of the Bill has been substantially improved since the drafting. I am relieved that it states that
“in determining whether a person is a victim by virtue of any conduct, it is immaterial that no person has been charged with or convicted of an offence in respect of the conduct”.
However, I am keen for the Minister to clarify that this also does not require the victim to report the crime to a criminal justice body.
Janet Daby
I want to refer again to the Domestic Abuse Commissioner, who said in her evidence to us:
“You are absolutely right: most victims do not report to the police. The reality is that it is probably one in six.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 7, Q4.]
I just want to emphasise that point: many victims do not report to the police. Of course, there is a question following that, as to whether a prosecution takes place.
Sarah Champion
My hon. Friend is absolutely right, as is the Domestic Abuse Commissioner. That is why it is imperative that all victims and witnesses, particularly children, can access support through this legislation without needing to engage with the criminal justice process.
I have worked with the NSPCC on this amendment, as it raised concerns due to the fact that the majority of crimes against children and young people are not reported to the police. It can be extremely difficult for victims and survivors to speak about their experiences of child sexual abuse, as revisiting traumatic childhood experiences often causes significant distress. Prior experiences of being silenced, blamed or not taken seriously by the justice system can discourage victims and survivors from disclosing child sexual abuse again.
The independent inquiry into child sexual abuse found that child sexual abuse is dramatically under-reported. The 2018-19 crime survey for England and Wales estimated that 76% of adults who had experienced rape or assault by penetration did not tell anyone about their experience at the time. A large number of the inquiry’s investigation reports noted that the true scale of offending was likely to be far higher than the available data appears to suggest. The Government’s own “Tackling Child Sexual Abuse Strategy 2021” noted that:
“People were even less likely to tell the police—only an estimated 7% of victims and survivors informed the police at the time of the offence and only 18% told the police at any point.”
Can the Minister guarantee, on the record, that the definition of victim includes those who choose not to report to the criminal justice system? The majority of victims, who choose not to report an offence, must still be able to access support under the Bill.
Edward Argar
I am grateful to the hon. Lady for the amendment, which she has clarified is a probing amendment; she is seeking clarity from the Box, as it were, that someone can come within the definition of a victim in the Bill without needing to report the relevant crime. Let me reassure her at the outset that that is already the case in the Bill’s existing definition.
Victims of crime are considered victims under part 1 of the Bill, whether or not the offence has been reported to the police or any other criminal justice body. This is a fundamental part of the Bill, because we want to make it clear that victims of crime are able to access support services, regardless of whether they have reported a crime.
The point is covered by clause 1(4)(b), which sets out that,
“criminal conduct” means conduct which constitutes an offence (but in determining whether a person is a victim by virtue of any conduct, it is immaterial that no person has been charged with or convicted of an offence in respect of the conduct).”
I am happy to clarify and build on that for the hon. Lady: reporting or conviction is not required to meet the threshold. That echoes the current victims code and approach, which is clear that relevant entitlements are available,
“regardless of whether anyone has been charged, convicted of a criminal offence and regardless of whether you decide to report the crime to the police or you do not wish to cooperate with the investigation.”
In the new draft code that we have published, that point is further highlighted in the opening section on who is a victim under the code, which explicitly sets out:
“The term ‘criminal conduct’ reflects the fact that you do not need to have reported the crime to the police to be considered a victim of crime. Some of the Rights under this Code apply to you regardless of your engagement with the criminal justice system.”
The reason it is worded that way is because some of the rights are clearly worded as only to be directly relevant if someone is in the criminal justice process. It is explicit there that the code would apply to the individuals that the hon. Lady seeks to ensure are encompassed in this context.
I appreciate that the amendment seeks to make the fact that reporting is not required as clear as possible. Our view is that the amendment is not necessary because of the current drafting of the Bill and the wording of the revised victims code.
Noting the hon. Lady’s words that this is a probing amendment, I hope she will not feel the need to press it further.
Sarah Champion
I thank the Minister for that clarity. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Anna McMorrin
I want to put on the record my thanks to the Clerks here, but also to Claire Waxman and Dame Vera Baird, who have steadfastly demonstrated their commitment to championing victims’ rights.
Dame Vera’s commitment has not wavered, even though she left her role as Victims’ Commissioner last September. Victims and advocates have continued to step up and make their voices heard, even when the Government have delayed the promised Bill time and again—we have been waiting eight years for it. Many victims, advocates and groups have continued to campaign and champion the issues. I particularly commend Claire Waxman, who has been pushing for this Bill for 10 years. Without those people, we would not be where we are today—at long last sitting here and scrutinising the Bill, line by line.
Anna McMorrin
Yes, that is what I am looking at right now. I wanted to make a couple of general points, because we are beginning the line-by-line scrutiny of the Bill, if you will just allow me to do so, Sir Edward; you are being very generous—thank you.
We can only do this by working together. I turn to the amendments that we have discussed today—the critical ones tabled by my hon. Friend the Member for Rotherham, who is a steadfast champion for the rights of those who have been abused and for the rights of children. I commend her for that work. The amendments we have discussed seek to strengthen clause 1 on the definition of a victim, and they particularly consider antisocial behaviour and child criminal exploitation.
My hon. Friend the Member for Birmingham, Yardley, when speaking to her amendment 54, made some emotive points on death by suicide and the impact on family members.
I hope that we can work together as we move forward in our consideration of the Bill, so that amendments, including those to clause 1, are discussed and debated, and so that we can amend the Bill later down the line, and so that victims’ rights, particularly the rights of child victims, are clearly defined in the Bill and that we strengthen the Bill as a result.
Edward Argar
I am grateful to right hon. and hon. Members for their points. It is important and right that we have taken a considerable amount of time to consider this clause on the definition of a victim, which of course is central—quite understandably—to what this Bill is about. It is a piece of legislation that I am pleased to be taking through Committee. If it does not harm my prospects with the Whips to say so, I will say that when I first entered this House in 2015 I took a close interest in working on this issue, alongside the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), having both been elected at the same time.
The hon. Member for Cardiff North mentioned the role of Victims’ Commissioner, which, as she will appreciate, is an extremely important post. We have seen a number of changes of Lord Chancellor in recent years. As she would expect, the new Lord Chancellor takes a very close interest in the position and is determined to make sure that he gets things right, gets the right person and that the process is properly followed. I know that he is as keen as she is to see the post filled, but filled properly.
Anna McMorrin
I appreciate the Minister’s answer. Could he come back to the Committee with a timetable for the appointment?
Edward Argar
It is probably premature to offer a prescriptive timetable, but I know that it is very much on the Lord Chancellor’s mind and that he recognises the importance of the role.
I am grateful for the debate on clause 1 and the various amendments. It is clear that we all agree on the importance of the clause. As I have alluded to, I am happy to work across the House where possible to see whether there are ways that we can address the points that have been raised.
Our intention in clause 1 is to define “victim” for the purposes of the relevant clauses in part 1 of the Bill, so that it is clear who is covered and entitled to benefit from the measures. If I may put it this way, we have sought to be more permissive and less prescriptive to avoid inadvertently excluding particular groups. In resisting some of the amendments, we have tried to avoid an approach that is duplicative. We do not need to put something in the Bill if there are other ways that we can achieve the same objective.
The clause focuses on victims of crime, which is relevant to the Bill’s measures designed to improve support services for victims, regardless of whether they report the crime, and to improve compliance with the victims code. I am grateful for the constructive engagement on the clause. I believe that the definition as drafted is a good definition, but there are certain points that I will take away and reflect on further.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Sarah Champion
On a point of order, Sir Edward. Amendments 44 and 49 have been grouped together, but they have little to nothing to do with each other. Is there any way to separate them, or am I stuck with that group?
The Chair
Well, I can ungroup them. We will deal with them separately.
Clause 2
The victims’ code
Sarah Champion
I beg to move amendment 44, in clause 2, page 2, line 18, leave out paragraph (a) and insert—
“(a) should be provided with information from all state agencies with responsibilities under the victims’ code, including the NHS, to help them understand the criminal justice process and beyond, including grant of leave or discharge.”
This amendment would extend the principle that victims should be given information about the criminal justice process to explicitly include the NHS, in order to bring mental health tribunal decisions in line with the rest of the criminal justice system.
I tabled amendment 44—and amendment 45, which we will come to later—because victims of serious crime committed by mentally disordered offenders currently do not get the same rights and entitlements as victims of offenders who are not mentally disordered. I apologise for the clunky terminology. Amendment 44 is vital, as critical information is often withheld from victims when the offender is mentally disordered.
In diminished responsibility cases, the psychiatric evidence is often considered and agreed in private by the Crown Prosecution Service without any meaningful disclosure to the victims. In those cases, there is often no trial, just a brief sentencing hearing where the evidence is not examined or tested in open court, which leaves victims completely in the dark. Often, offenders in such cases will have been patients of local NHS mental health trusts, which will have conducted their own investigations into the care and treatment of the offender. Many of those investigations are not shared with the families as they should be, with NHS trusts often ignoring official national NHS guidance without sanction. NHS trusts seem unaware of their responsibilities and duties to victims under the victims code.
I am speaking about the issue from personal experience. I have worked with the brilliant charity Hundred Families on this amendment, as well as amendment 45, because it has been supporting a bereaved family in my constituency that has been affected by this type of case. In February 2022, my constituent’s son, Paul Reed, was murdered on a ward in Rotherham Hospital by a fellow patient. Although there is clear NHS guidance requiring the trusts to investigate serious incidents, the hospital did not even consider Paul’s murder a serious incident. Initially, the hospital claimed that it had done a full investigation but would not share it with the family; then it turned out that it had not done an investigation at all. It required many letters, and finally my direct involvement, to get it to start a proper investigation.
That case, like others, shows that the Bill needs specifically to include the NHS to get it to take its duties to victims seriously. This is, sadly, a widespread issue; I know that Committee members have direct experience of it with their constituents. There are around 100 to 120 mental health-related homicides in the UK each year. In December 2022, there were 4,580 restricted patients —mentally disordered offenders who have committed serious crimes and are considered dangerous—in psychiatric hospitals in England and Wales. Around 2,979 restricted patients are discharged every year, although 268 were recalled to hospital according to the latest figures from 2020.
There is a very high rate of reoffending by such patients on their release. A recent long-term academic study found that 44% of offenders discharged from a medium-secure psychiatric unit were reconvicted following release, mostly for assault. Nearly 30% were convicted of a grave offence such as robbery, arson, wounding, attempted murder or rape. Another study of patients released from high-secure psychiatric wards found that 38% were reconvicted, 26% of them for serious offences. These are very sensitive cases that may raise broader concerns about processes, but victims and families deserve access to information, just as they would if the case went through the criminal justice system.
The amendment would ensure that the NHS is explicitly included among agencies that have a duty to inform victims of decisions made about an offender. I genuinely cannot understand why that is not happening now, and I really hope that the Minister will address that serious oversight. These families have already experienced immense grief and shock. They must be able to remain informed about the case, just as they would if the offender did not have any mental health issues.
Maria Eagle
I rise briefly to support my hon. Friend’s amendment. She has touched on an important point: the difference in treatment between offenders who end up in jail and those who end up in some form of secure hospital or mental health unit. That is something that struck me when I was a Minister at the MOJ, in what now seems like the dim and distant past—in fact, it is.
The main reason for the difference is that the offender in the mental health hospital or secure unit is treated by clinicians, who have that person’s clinical recovery at the core of what they do. They are very much focused on that and not so much on the broader issues of public safety, as would be the case in the criminal justice system, in the prison and at the Parole Board. I am not saying that clinicians do not consider those issues at all; I am saying that the focus is different.
Therein lies one of the reasons for the difference that my hon. Friend’s amendment highlights: the focus is on getting the individual who is in mental health provision up on their feet and back out operating in society, rather than on the broader public safety issues that may arise from that person’s being back out and about. Putting such an obligation on health service organisations is the kind of prompt that would make clinicians—and treating clinicians in particular—think a little more about the broader issues, instead of focusing entirely on the recovery of their patient.
One can understand why a clinician focuses on the recovery of their patient. I am not criticising that, but often there is not the overview of the broader public safety implication of any decision. I hope that the Minister, with his very open mind, which he has already demonstrated today, will consider that there is an issue here, and that there has been for many years. Depending on the kind of offence, it is easy to end up in either mental health provision or jail; some offenders could end up in either, yet the way they are treated can be very different, as can the reasons that decisions are made.
Edward Argar
I am grateful to the hon. Member for Rotherham for tabling the amendment and airing this issue. The amendment seeks to ensure that victims are given
“information from all state agencies with responsibilities under the victims’ code, including the NHS, to help them understand the criminal justice process and beyond, including grant of leave or discharge.”
I recognise the importance of ensuring that victims receive the information they need to help them understand the process, including when the release—temporary or otherwise—of offenders detained outside the prison system is being considered.
The hon. Member for Rotherham drew attention to cases where an offender was subject to a hospital order. As the right hon. Member for Garston and Halewood highlighted, such offenders are subject to a different process from offenders in the prison estate. They are viewed through the prism of health as opposed to criminal justice, and decisions about their detention under the Mental Health Act are taken by the mental health tribunal or the Secretary of State for Justice, rather than by the Parole Board. However, I want to reassure hon. and right hon. Members that communication with victims about those processes is handled in the same way, through the HMPPS victim contact scheme.
Under the scheme, the victim liaison officer will share information about the process for considering release and will notify victims when the patient is having their detention reviewed. The victim liaison officer will also support victims and make representations to decision makers on conditions of discharge in appropriate cases. The victim liaison officer is best placed to communicate with and support victims in such circumstances, as they will be expert in the process and have victims’ interests at the centre of their work.
The victims code includes some information about the process and what victims can expect from those involved, under right 11, the right
“to be given information about the offender following a conviction.”
I think it is right to keep the detail of who will deliver services, and how, in the code rather than in the Bill, in order to build in flexibility so that it can continue to be updated and to enable the inclusion of more operational details, such as those I have outlined. However, I take the point made by the right hon. Member for Garston and Halewood and the hon. Member for Rotherham about how we get an organisation such as the NHS—I had the privilege being the Minister of State for Health for two and a half years—to engage with that in what is understandably a different context, because there is often a medical mindset rather than a criminal justice one. My plea to Members is that this is better considered in the context of the revised code, and that perhaps we can use that to better draw out victims’ rights.
Sarah Champion
Could I push the Minister to say that he will consider this in the revision of the code? I hear everything that he says, but it relies on all the different parts working together, which simply is not the case.
Edward Argar
Notwithstanding any legislative reason or primary legislation that might limit our scope, I am quite happy to look at it in the context of the code. We have published a pre-draft to give colleagues and organisations the opportunity to engage with it and make suggestions before it goes to the formal consultation process, and so that it is available to members of the Committee during our deliberations. I encourage the hon. Lady to engage with that.
With that, I hope that I may encourage the hon. Lady to treat this as a probing amendment, rather than one she wishes to press to a Division.
Sarah Champion
I will indeed treat it as a probing amendment. I am given confidence by the Minister’s words. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Anna McMorrin
I beg to move amendment 6, in clause 2, page 2, line 18, leave out “should” and insert “must”.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in clause 2, page 2, line 20, leave out “should” and insert “must”.
Amendment 7, in clause 2, page 2, line 22, leave out “should” and insert “must”.
Amendment 8, in clause 2, page 2, line 24, leave out “should” and insert “must”.
Anna McMorrin
In his opening speech on Second Reading, the Justice Secretary stated that
“in order to deliver justice, victims must be treated not as mere spectators of the criminal justice system, but as core participants in it. That is the mission of this Government and of this Bill. It will boost victims’ entitlements”
and
“make victims’ voices heard”.—[Official Report, 15 May 2023; Vol. 732, c. 583.]
On paper, it sounds like the Government are dedicated to putting victims first, yet they stumble at the first hurdle. Clause 2(3) states only that agencies should comply with the four overarching principles of the victims code, making those principles weak and open to interpretation.
Ellie Reeves
Does my hon. Friend agree that if the Bill is really going to serve victims, it is important that it sets out what must be done rather than what should be done? We all know that when the word “should” is used, it often simply does not happen, and that is not good enough.
Anna McMorrin
I thank my hon. Friend for making that point. That is at the core of why I would like the Government to agree to the amendment. The principles are at the core of the Bill and agencies must comply with them. If they do not, that will call into question the essence of this entire piece of legislation.
I understand from the Government’s response to the Justice Committee’s pre-legislative scrutiny report that they believe the wording cannot be “must”—I am probably predicting what the Minister will say—because agencies require flexibility. However, having spoken to various stakeholders, I have seen no example where such flexibility would be required or reason why we could not reflect it in the code, rather than by watering down victims’ rights in the Bill.
As the Government’s reasoning remains unclear, I hope the Minister might clear that up for us today. If the intention is to prevent civil litigation from victims, the Bill already achieves that. Victims deserve some form of accountability from criminal justice agencies, and weakening victims’ rights by using the word “should” will result only in a Bill that fails to make a difference on the ground.
The victims code has been in place since 2006. Compliance with the code has always been low; even though the Government have reformed it four or five times, that has not driven better compliance. The Bill is an opportunity to improve that, but by stating that agencies only “should” comply, it absolutely fails to do so. I will repeat what London Victims’ Commissioner Claire Waxman said during the evidence session. She said that
“delivering the code is a minimum level of service to victims. Even if agencies are complying and delivering it, it is still a minimum level.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 29, Q67.]
As shadow victims Minister, I speak to survivors every day. Their harrowing truths and inspiring bravery helps shape what we do in this place, and I thank every single one of them for sharing their truth with me. I want to pay tribute to one of them, Sophie, who spoke to me. She was raped when she was just 19 years old. After Sophie reported the rape to the police, she was brought in to be interviewed, after which months went by with little contact or communication about her case and what was going to happen. She was not told of her entitlement to an independent sexual violence adviser for eight months after speaking to the police and had to wait two years for her day in court after it was pushed back several times. Sophie was told by the detective on her case that it would help her to give evidence in person in court, which she did, even though she was absolutely petrified and the thought of it retraumatised her. She desperately did not want to.
Her Crown Prosecution Service barrister looked at Sophie’s case for only 30 minutes before the trial. He had no communication with her before that—not even a conversation before the trial began. Sophie told me that she felt like a tick-box exercise for the CPS to just get its stats up and get the case into court.
During the trial, Sophie was put behind a screen to protect her from seeing the perpetrator—a little screen that goes up, knowing that the perpetrator is there—but the defence barrister persisted and used a horrific scare tactic to throw Sophie off. He asked her to open a booklet that was in front of her. She opened it to page 1 and in front of her was the image of the man who was the perpetrator. Her own barrister did absolutely nothing to stop that. That not only had a very real mental health impact there and then—she suffered a panic attack and anxiety and had to leave the courtroom—but she could not gather herself afterwards because it had retraumatised her. She said to me that she thought she was going to vomit there and then in the court, and nobody did anything to stop her. The witness assistant, who was of course trying her best, said, “Pull yourself together, Sophie. You need to go back in there and do this.”
Sophie told me that because of the technique used she was unable to remember any of the important details of the incident, and we know what trauma does: people cannot recall really important incidents and detail. The intense stress and anxiety she was experiencing meant that she just could not remember. She believes that that led to the not guilty verdict.
After waiting a torturous two years for justice, Sophie was retraumatised and her attacker walked free. Although I agree with the four overarching principles, I do not agree that they are a step in the right direction for victims. We must make sure that the Bill is fit for purpose and that agencies have a duty on them. That is why the amendments and changing “should” to “must” are essential.
Edward Argar
I am grateful to the shadow Minister for the amendments and the opportunity to debate them, and for her articulating her rationale for them so clearly. I hope you will allow me to address all four together, Sir Edward, as they each seek to ensure that the victims code is required to make provision for services for victims that reflect the overarching code of principles in the Bill—as the hon. Lady has said, replacing “should” with “must”.
I want to explain the reasons behind the approach we have taken. The principles provide a legislative framework for the code, which ensures that the code captures the core issues that we know victims are most concerned about—the right information, the right support, the opportunity to have their views heard and the ability to challenge decisions that affect them.
I reassure the Committee that the detailed entitlements for victims are set out in the victims code. As it is a statutory code of practice, there is already a clear expectation that agencies will deliver the entitlements that it sets out, and agencies are required to justify any departure from it if challenged by victims or the courts. The hon. Lady gave the example of particular cases. There will be many others. Without straying into decisions made by judges in those cases, she illustrated through that example why the principles matter.
Jess Phillips
Does the Minister agree that if this was written into primary legislation and it did not happen, a victim who sought to challenge that would have a case in law to do so, and would not otherwise?
Edward Argar
I will turn to non-compliance and why we believe that the approach that we have set out in the clause is the right one. I suspect that Opposition Members may take a different view, but after making a little progress, I will hopefully address some of their points—whether or not to their satisfaction.
Maria Eagle
Will the Minister give way again, before he goes on? I am not seeking to try his patience.
Maria Eagle
Dame Vera Baird, the former Victims’ Commissioner, said in evidence:
“There is a statistic—from 2020, I think—that 70% of people who have been through the criminal justice system as victims have never heard of the victims code. We used Office for National Statistics data in 2021 and showed that 80% of victims who had gone through the entire criminal justice system had never heard of the victims code. The first code was in 2006, so it has been completely ignored for 18 years.”––[Official Report, Victims and Prisoners Public Bill Committee, 20 June 2023; c. 29, Q66.]
How will the Minister’s wording tackle that better than beefing up the language in the Bill would?
Edward Argar
I am grateful to the right hon. Lady, but there is a slight difference between her two points. That survey refers to the number of victims who were not aware of the code; that does not necessarily mean that their rights were not available to them, or even that they were not given to them. They may not have seen it through the prism of the victims code, but they may have been kept informed. She is right to highlight that under Governments of all political complexions there is more to do in driving this, but the key point that that evidence points to is the importance of raising awareness of the code, ensuring that people know it exists and understand what it can do for them. As we progress through the other clauses, I suspect that we will touch on how we can do more on that. Raising awareness of the code’s existence and what is in it is the crucial first step to empowering people to request, push for and demand their rights under it.
Rob Butler (Aylesbury) (Con)
In terms of raising awareness, does my right hon. Friend agree that the language used in any explanatory materials needs to be crystal clear, and tested for comprehension by people of all levels of ability and understanding? We know that many people in prison who come up against the criminal justice system from that side have very low reading ages. It is really important, because some offenders are also the victims of crime, that what we put into legislation with every good intention is clearly understood.
Edward Argar
My hon. Friend is absolutely right. That is one of the reasons, but not the only reason—I suspect we may touch on this when we come to amendment 49—why our approach is to place a greater reliance on the victims code, because the nature of legislation is that there is often a requirement for it to be phrased in a certain way with particular language for good legal and drafting reasons. With a statutory code such as the victims code, there is greater flexibility to ensure that it can do what it aims to do, which is to make it accessible. As I said, I suspect we may touch on this when we discuss amendment 49 from the hon. Member for Rotherham.
On addressing non-compliance, the Bill places a new duty on criminal justice bodies to collect and share code compliance information with police and crime commissioners, who in turn are under a new duty to share information with the Secretary of State. We also intend for information to be shared within national oversight structures, and there is a duty on the Secretary of State to publish information, which will allow the public to assess, through greater transparency, the compliance of public bodies with the code. Where issues are identified by police and crime commissioners or others, operational agencies can take action to address them and enforce standards. Should local solutions fail, senior figures in the criminal justice system will provide national oversight to drive improvements at a system level. Ministers already have powers to intervene where systemic failures occur, such as the ability to direct inspections or direct measures to remedy failures.
When things go wrong, victims can make a complaint. The Bill will simplify the process for victims of crime to escalate complaints. It does that by removing the need to raise a compliant through an MP before it can be made to the Parliamentary and Health Service Ombudsman. Instead, it allows victims to make a complaint directly or through a nominated representative. I know that Members of this House are always diligent in considering PHSO requests and forms from members of the public and their constituents—we look at them, we review them and we sign and submit them where appropriate—but we believe that this simplifies the process in these circumstances and provides for direct access. The PHSO will investigate complaints and can recommend that an organisation issues an apology, provides a financial remedy or takes action to resolve the complaint to prevent the same thing from happening again. Crucially, it can follow up on whether action has been taken and report to Parliament where an organisation has failed, not only providing a remedy for individuals but being a driving force for improvements for victims.
In summary, our view is that the Bill provides an appropriate legal framework for the victims code that sends a clear message on the principles that are important for victims, alongside new monitoring and oversight measures to drive up compliance with the code. I hope that the shadow Minister will not press her amendments to a Division, but I will wait and see.
Anna McMorrin
I thank the Minister for his response. As I predicted in my outline—I must admit, I am not psychic, but I do read the Minister’s responses to the Justice Committee and in pre-legislative scrutiny—I am disappointed that the view has not changed, because when speaking to agencies and victims, that is what they all tell me is needed to provide the support that victims so desperately need. I outlined that in the emotive response from Sophie, who spoke to me about her awful experience, but we know that that is just one experience. These experiences happen time and again across the country, and I am sure that because all of us here have an interest in victims and the justice system, we will all have heard similar cases.
I am disappointed that the Minister has not understood that and is not seeking to change “should” to “must”. As we heard clearly in the evidence sessions, and as my right hon. Friend the Member for Garston and Halewood mentioned in regard to the former Victims’ Commissioner, who talked about the need for this to be outlined, criminal justice agencies do not know that the code even exists. Changing “should” to “must” would be a vital way of ensuring that this is on the face of the Bill. Victims deserve some sort of accountability from these agencies, and the weakening of their rights through using only the word “should” will not make a difference on the ground. I hope that we are trying to work together today to make that difference for victims on the ground. The victims code has been in place since 2006, but as has been outlined today and in statements from our witnesses, it is not being used. It is therefore not making a tangible difference to victims’ experiences and the criminal justice agencies are not using it to its full potential.
I will not press the amendment to a vote now, but may bring it back at a later stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 49, in clause 2, page 2, line 19, at end insert
“in a language or format that they can understand;”.
As the Minister predicted, this amendment dovetails nicely into his remarks. The prominence of right to understand and be understood in the code is genuinely welcome and has the potential to significantly improve the experiences of victims who speak English as a second or additional language—EAL. However, for these basic rights to be upheld and to make meaningful change, they must be enforceable. It is therefore vital that they are enshrined in more detail in primary legislation. In particular, the entitlements underpinning the right to understand and be understood must be enshrined more directly in the Bill.
Failing to address and respond to communication barriers could risk the police having incomplete information and evidence from victims due to a lack of support to ensure that they are understood. SignHealth has highlighted a case where a deaf victim did not want their family to be involved and requested to make her disclosure outside of the home. Instead of having the conversation at the station, the officer took a statement from a British Sign Language user in their car, using a pen, paper and gestures. She was left vulnerable and unable to fluently express herself. When she attended a meeting with the police, no support or interpretation services were provided. She was handed a “no further action” letter that provided no rationale. She had no understanding of what the letter meant and had to struggle to use Google Translate to understand the decision. Such examples highlight how failing to respond to communication barriers can also result in cases not being adequately investigated, and subsequently closed.
It is deeply concerning that statutory bodies are enabling perpetrators to exploit these vulnerabilities and to keep controlling victims while remaining unpunished themselves. Amendment 49 is essential to ensure that all victims can access information in a language or format they can understand. It is crucial that this is explicitly on the face of the Bill, because if a victim cannot understand the information provided, their rights have not been met.
Currently, spoken language is not recorded systematically within the criminal justice system. There is no accurate data available on the number of victims who speak EAL. There is also evidence that criminal justice practitioners often make do with alternative forms of support, such as the use of Google Translate, which victims report to be much less helpful than professional language support. The absence of interpretation provision has been linked to a number of adverse outcomes, ranging from inaccurate statements being taken to a negative effect on victims’ wellbeing and trust in the police. This is not acting in the best interests of the victim and does not enable us to achieve justice, so I hope the Minister will focus on these issues.
Maria Eagle
I commend my hon. Friend the Member for Rotherham for tabling the amendment. It is very easy to forget about disabled people in our public services, and there is an obligation under the Equality Act 2010 to provide access to public services in a way that works for disabled people, which can often involve proper translations or formats. Given that disabled people are disproportionately victims of crime, it is particularly incumbent on us, when considering the victims code, to make sure that it is accessible to those who are likely to benefit from it or who could benefit from it. The more vulnerable a victim is, the more likely they are to benefit from proper access to the rights in the code and the support it provides. It would be an omission if we did not make it clear.
Sarah Champion
There is also a common misunderstanding that deaf people will be able to understand information in written form, but English is not their first language—British Sign Language is—and we have now rightly recognised it as a language in its own right. They are being asked to read something in a second language that they may or may not be competent in.
Maria Eagle
Absolutely: prelingually deaf people in particular do not have English as a first language. British Sign Language is their first language and we cannot just assume that they will be able to read written English in the same way in which they could understand proper sign language interpretation. That is a misunderstanding and a lack of awareness on the part of those who provide services. If we do not make it clear that access has to be provided, with reasonable adjustments to ensure that deaf people can understand what is being said and can exercise their rights, we will not be doing a proper job.
It is all too easy to think about this as an added extra—that it would be good if we had enough money in the budget to translate the victims code into different languages—but translating the code is an essential part of ensuring that it is implemented and usable by many victims. If we do not do this, we will not have the success that we all hope for from putting the principles underlying the code into legislation. We can have as much flexibility as we like by not putting the draft code into primary legislation, but we need to make sure it is accessible to those who need it. The amendment is important. It is not a nice added extra: it is an essential part of ensuring proper awareness and that the victims code is usable and benefits those who need it to access their rights and to be able to deal with the criminal justice system as victims.
Edward Argar
Amendment 49 would amend the first principle of the victims code, which says that victims should be provided with information to help them to understand the criminal justice process, to state that the code should be provided in a format or language required for a victim to understand.
The victims code includes an entitlement—indeed, it is the very first entitlement—for victims to be able to understand and to be understood. The right states:
“You have the Right to be given information in a way that is easy to understand and to be provided with help to be understood, including, where necessary, access to interpretation and translation services.”
Not only is it implicit in that that the issues raised by the right hon. Member for Garston and Halewood and the hon. Member for Rotherham are addressed, but in the revised draft of the victims code that we have published, footnote 28 on page 15, which sets out right 1 in more detail, explicitly says that the right
“includes both spoken and non-spoken interpreting, for example if a victim is deaf or hard of hearing.”
It is there in the code not only implicitly, but explicitly, particularly in respect of the circumstances alluded to by the right hon. Member for Garston and Halewood.
We appreciate that the criminal justice process is complex and on occasion can appear impenetrable. The code is absolutely clear in right 1, which is “To be able to understand and to be understood”—
Edward Argar
I will finish my sentence, then of course I will. The code is absolutely clear in right 1 that all providers are expected to consider any relevant personal characteristics that may affect a victim’s ability to understand and be understood, and to communicate with victims in simple and accessible language—a point made by my hon. Friend the Member for Aylesbury in his intervention —to help them to understand what is happening.
Sarah Champion
I began my speech on the amendment by welcoming the new changes, but the fact of having it enforceable is the nub of the amendment. Is the Minister able to speak about that? I have the right to be treated with respect in this place, but it does not always happen.
Edward Argar
I appreciate the hon. Lady’s point. I will just round off my point, then address her point specifically. Right 1 of the code is clear that victims who, for example, have difficulty understanding or speaking English—the right hon. Member for Garston and Halewood alluded to the fact that some people’s first language will be not English but British Sign Language, so they would be encompassed in the wording—are entitled to use an interpreter when being interviewed by the police or giving evidence as a witness, and so on. It also sets out the circumstances in which victims are able to receive translations of documents or information and makes it clear that all translation or interpretation services must be offered to the victim free of charge. The approach we have adopted throughout, and continue to support, is that we set out in the Bill the overarching principles that are important to victims and underpin the victims code, but the operational detail of how they are delivered sits in the code itself.
To address the hon. Member for Rotherham’s point, it is of course a statutory code, and we are strengthening that in the way we are approaching it in this legislation, but I appreciate her point. When she reviews the code, if she has suggestions about how right 1 on page 15 might be made more explicit—it is there, but she might argue that the footnote 28 at the bottom of page 15 could be made rather more prominent—I am happy to reflect on them and, equally and more broadly, any suggestions that she or other right hon. and hon. Members have on how the code might be made more accessible, including in its language, which goes to my hon. Friend the Member for Aylesbury’s point in the debate on a previous group of amendments.
We are clear that given that the focus in the code is on the need to provide information in a way that is understood by those who need it, the amendment is unnecessary. We believe that the code is the right place for the right to be articulated, and on that basis I hope that the hon. Member for Rotherham will consider not pressing the amendment to a Division.
Sarah Champion
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
I have agreed to a further request to vary my grouping for debate. We will now debate amendment 45 separately, and then amendments 48 and 50, along with new clause 7.
Sarah Champion
I beg to move amendment 45, in clause 2, page 2, line 23, at end insert
“and with all state agencies with responsibilities under the victims’ code, including HMCTS and the NHS when considering leave or discharge;”.
Amendment 45 follows on from my amendment 44, which was about access to information for victims of mentally disordered offenders. Amendment 45 focuses more on release decisions. Victims need information beyond the arrest, prosecution and conviction of the offender: they also have a right to receive information about the offender’s leave and discharge. In all other situations that right is a given, but we need to ensure that it also works in practice for victims of mentally disordered offenders.
Mentally disordered offenders who have committed serious crimes are typically granted leave or discharged by mental health tribunals, also known as first tier tribunals. Hundred Families, with which I worked on the amendment, says that there is no evidence of mental health tribunals taking victims’ rights seriously—a bold statement. Victims are not considered to be interested parties when the release of dangerous offenders is being considered. Mentally disordered offenders who have committed very serious crimes can apply for leave or discharge within six months of conviction and every year thereafter. Victims of such mentally ill offenders are granted only very limited rights to comment in the tribunal hearings, particularly in comparison with when parole boards consider the discharge of offenders who have committed serious violence.
At the parole board, victims can make a personal statement, attend the hearing, receive copies of any decisions and appeal the decision. At mental health tribunals, victims cannot make any personal statements. They are not allowed to attend the hearing, do not receive decisions and have no means of challenging any decision, because they are made in secret and not publicly disclosed. I draw the Minister’s attention to his remarks about my amendment 44: what I have said brings them into dispute. I am interested to hear his thoughts about that.
Other jurisdictions—notably Scotland, but also Queensland, Australia—allow victims’ participation at mental health tribunals without any known problems. Amendment 45 simply aims to bring these victims’ rights in line with those of any victims participating in the parole process.
Edward Argar
As ever, I am grateful to the hon. Lady for her speech setting out the rationale for amendment 45. She seeks to give victims the opportunity to make their voices heard during particular types of proceedings. The amendment seeks explicitly to include the NHS and HMCTS within the victims code principle that victims should have the opportunity to have their views heard in the criminal justice process. It seeks to cover cases in which the full or temporary release of offenders detained outside the prison system under the Mental Health Act 2007 is being considered.
Eligible victims are able to provide their views on release conditions for offenders, but they are not able to explain to the decision makers in the mental health tribunal the impact that the crime had on them. We agree with the hon. Lady: we do not think that is right. Victims are able to give such explanations in the courts and the parole systems through a victim personal statement, and we believe that that should be the case regardless of where the offender is detained. That is why the Government have committed to making provision in the new victims code for victim personal statements to be submitted to mental health tribunals considering the release of an offender.
That commitment is reflected in the draft code that we have published. Right 7, the right to make a victim personal statement, includes draft text to show how that would apply to victims eligible for the victim contact scheme. We are working through the details with our partners, including the judiciary, to consider how we can appropriately achieve our aim in a way that recognises the particular sensitivities relating to the offender’s health records and conditions in these settings.
We have committed to consult on an updated victims code after the passage of the Bill. As always, I am open to working with the hon. Lady on ensuring that the new provisions relating to mental health tribunals meet the needs of victims. We will keep her updated on the work we are doing. For reasons of flexibility, it is right to keep the detail of who will deliver the provision, and how, in the code itself rather than in the Bill, but I hope that I have reassured the hon. Lady that we share her view and that we are working to deliver on that, both through the code and with the judiciary.
Sarah Champion
Indeed, and I thank the Minister. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 48, in clause 2, page 2, line 23, at end insert “, including on parole decisions;”.
This amendment seeks to clarify that the principle that victims should have the opportunity to make their views heard in the criminal justice process includes parole decisions.
The Chair
With this it will be convenient to discuss the following:
Amendment 50, in clause 2, page 2, line 23, at end insert
“and should be provided with appropriate support to communicate these views;”.
New clause 7—Parole Board: victim engagement—
“(1) It is the duty of the Parole Board to monitor and report on how they support victims to make their views heard in the criminal justice process.
(2) In discharging the duty under subsection (1), the Parole Board must report to the Secretary of State on their effectiveness in—
(a) engaging victims at all stages of the criminal justice process, including informing them of outcomes, and
(b) informing victims of their right to make a Victim Personal Statement.
(3) The Secretary of State must lay a copy of any reports received under this section before Parliament within 15 days of receiving them.”
This new clause would require the Parole Board to monitor and report how they support victims to make their views heard in the criminal justice process.
Sarah Champion
I tabled the amendments and new clause because I have had to deal in a short period of time with two constituency cases of pretty horrendous child sexual exploitation in which victims of extremely serious crimes were not notified when an offender was considered for transfer to open conditions until after a decision had been made and, in one case, after the decision had been implemented, which goes completely against the existing practice that is detailed in the code and should be enforced across all our justice systems. That happened despite the statutory duty on His Majesty’s Prison and Probation Service to notify victims. Neither constituent had the opportunity to express a view on the transfer, to outline their concerns or to contribute in respect of the conditions of the release. Instead, in a bolt out of a blue, they were told, seemingly by accident, that their offender was out on the streets. It is hard to imagine the shock and terror that caused them.
When I raised the cases with the then Secretary of State for Justice, I was told that both incidents were the result of human error. The two incidents were markedly similar and affected people in a relatively small geographical area in an extremely short period of time, so I find it very hard to believe that they were isolated and not, instead, a system failure. It is difficult to understand how such errors can be made if well-understood processes are in place, as we are expected to believe, and those processes are underpinned by statute. The changes in the amendments and new clause would strengthen the statutory underpinning, hopefully to thereby avoid similar incidents happening in future and ensure that such devastating mistakes could not happen again.
Amendment 48 would add “including on parole decisions” to clause 2(3)(c), which says that victims
“should have the opportunity to make their views heard in the criminal justice process”.
That should already be happening but sadly is not, and victims are being left vulnerable, uninformed and without their rights being met.
New clause 7 would place a core responsibility on the Parole Board, as the statutory body, to ensure that the right of victims to make their views heard is fulfilled, by monitoring and reporting on how it supports victims to ensure that their views are heard.
Amendment 50 would, similarly to amendment 49, ensure that victims have the opportunity to make their views heard in the criminal justice process and that they should be provided with the appropriate support to communicate their views. The amendment is supported by, among others, the Bell Foundation, to which I am grateful for its support. The amendment is vital for the victims the foundation works with to ensure that they can be involved in parole decisions.
As I stated in my remarks about amendment 49, Google Translate is used too frequently and is not an effective tool for ensuring that victims can understand and be understood. An example from Rape Crisis refers to a victim of domestic abuse and sexual violence whose first language is not English. When she attended a meeting with the police, no support or interpreting service was provided. She was handed a “no further action” letter that provided no rationale and gave no understanding of what it was. She had to struggle to use Google Translate to understand the decisions that had been made. How is she supposed to communicate her views about a parole decision if she is unable even to understand the process?
All victims deserve the right to be involved in parole decisions, but we must first ensure that they can be understood when they give their views and that they also understand the process.
Edward Argar
Before I turn to amendment 48, let me address amendment 50, which would add to the victims code the principle that victims should be provided with appropriate support to make their views heard in the criminal justice process. It is right that victims are able to make their views heard, and I agree that they may need support to help to navigate the process effectively. That is why there is already support in place for them to do so, including support provided by organisations and services, such as independent sexual violence and independent domestic violence advisers, and other victim support services that can help explain and help victims navigate the justice system. A victim personal statement is key to the victim being heard in the criminal justice process. That allows victims to explain in their own words how a crime has affected them.
Under code right 7, “To make a Victim Personal Statement”, the police are expected to provide victims with information about the victim personal statement process, so they can decide whether to make one. The College of Policing provides guidance for the police on what victims need to know about the process of making a victim personal statement. To help victims, the Ministry of Justice has published guidance called, “Making a Victim Personal Statement”, which explains what it is, how it works and what the victim needs to do.
Support at court if the victim is due to read out their victim personal statement may include special measures, such as the use of a screen or live link, and support from the witness service can include accompanying the victim when they give evidence or read their victim personal statement. If giving a victim personal statement during the parole process, victims who are part of the victim contact scheme will have a victim liaison officer, who can help them write their statement and let them know how it will be used during a parole hearing. I hope that I have gone some way to satisfy the hon. Lady that support is already in place.
Sarah Champion
I will be quick because I know we have a vote coming. I agree that the instruments are in place, but the problem is that it relies on humans to actually let the victim know or the Parole Board to let the victim support know, and that is where it is breaking down.
Edward Argar
I hope I might address that to some extent as I turn now to amendment 48 and new clause 7, which relate to the role of victims in the parole system. Amendment 48 would add parole decisions to the principle in the victims’ code that victims’ views should be heard in the criminal justice process, and new clause 7 would place a duty on the Parole Board to monitor how it supports and enables victims to give their views to the Parole Board. It would be required to report that to the Secretary of State, who in turn would be required to publish it. It is vital that victims are informed of the parole process and are given every opportunity to engage with it so their voices are heard. The parole process can be distressing for victims, so it is crucial that they understand how the system works and receive support to effectively engage in the process.
We have made improvements to the way victims can receive information and participate in parole proceedings, including the introduction of decision summaries and public hearings. Parole hearings are part of the criminal justice process, which extends beyond the trial. That means the principle that victims should have the opportunity to make their views heard in the criminal justice process already includes relevant parole decisions, so the amendment is not necessary.
Right 11 in the victims code already sets out victims’ entitlements to submit a victim personal statement as part of the parole process. Where the victim chooses to make a victim personal statement, the Parole Board Rules 2019 require that it is included in the dossier of written evidence submitted to the Parole Board by the Secretary of State. Right 11 of the code then requires the Parole Board to read the victim personal statement, if one has been made. We have committed to developing a process to allow victims the opportunity to make written submissions to the Parole Board in addition to their victim personal statement. Information in the submissions could include their views on the offender’s potential release and questions to the Parole Board. Provision for victim submissions will be included in the new victims’ code.
It is vital that victims are supported during the process, that there is oversight to ensure they are being given the opportunity to have their voices heard and that they feel supported to do so. However, the proposed new clause seeks to put duties on the Parole Board in relation to support for victims. The reality is that the Parole Board does not liaise directly with victims. In practice, the responsibility for supporting victims through the parole process lies with probation service victim liaison officers, who sit within His Majesty’s Prison and Probation Service. They are specially trained to work with and support victims through the parole system, including ensuring that they can submit a victim personal statement and be informed of the outcome of the review.
Under the current code, victims are entitled to be given information about the offender following a conviction and to be told about how to make a victim personal statement. That is delivered through the referral of eligible victims to the victim contact service, and they are then assigned a victim liaison officer. That means that compliance with those entitlements can be monitored and reported on via clauses 6 and 7. The clauses place a duty on HMPPS to collect and share information on the delivery of victims code entitlements and to jointly review this with police and crime commissioners, and on police and crime commissioners to report to the Secretary of State, who will publish relevant information.
On the basis that we can monitor this important information by different means, and that an updated victims code will include the information regarding representations to the Parole Board, I encourage the hon. Lady not to press her amendment to a Division at this time.
Sarah Champion
I thank the Minister for what he says, but it does not given me the reassurances that I want, because things are not working in practice. I will not press my amendment to a vote now, but I am minded that the new clauses will come at the end of our consideration. I may well press the matter then if he is unable to give those reassurances. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Elliot Colburn (Carshalton and Wallington) (Con)
I beg to move amendment 26, in clause 2, page 2, line 25, at end insert—
“(e) should be able to access and, where appropriate, be referred to restorative justice services;
(f) should be able to access and, where appropriate, be referred to services and support that are tailored to their individual needs.”
I am grateful to have been called to speak, Sir Edward, but I appreciate that my speech may not last for long before we are called somewhere else. My amendment relates to the inclusion of restorative justice in the victims code set out in clause 2. That was a recommendation that the Justice Committee made in its pre-legislative scrutiny of the Bill, but I have tabled the amendment as a Back-Bench MP and as chair of the all-party group on restorative justice.
To give a little background and context, I was inspired to do so because of a heartbreaking and harrowing story. I know that the Minister has heard it before, but I will repeat it for the benefit of the Committee. A lovely couple living in the London Borough of Sutton, Ray and Vi Donovan, suffered the most unimaginable tragedy when their son Christopher was murdered. [Interruption.]
Elliot Colburn
I will resume by telling the story of Ray and Vi Donovan, a couple who live in the London Borough of Sutton. They went through the tragedy of losing their son, who was murdered several years ago.
A long time ago, Ray and Vi recited to me their experience of going through the criminal justice system. The police found the three boys who were responsible—they went to trial, were convicted and put behind bars. But Ray and Vi said that they never felt that they—as victims of the crime, and having lost their son in such tragic and gruesome circumstances—had had a voice at the trial. They did not have the opportunity to share their side of the story or explain how it had impacted them; it was all to do with the perpetrators.
Ray and Vi acknowledge that some time has passed since the trial; however, they have made it their life’s goal to set up a restorative justice charity in Christopher’s name and to work with wider restorative justice providers around the country to promote its use, where appropriate, and to improve access to it. That is the premise of the amendment. Studies show that only about 5% of victims are aware of restorative justice; it is often buried in a large pack or binder that victims of crime get handed.
I want to be clear about what I mean by restorative justice, because it often gets confused with the American version. The UK does it very differently. Restorative justice has no impact on sentencing, parole or anything like that; in the criminal justice space, restorative justice is the opportunity for a victim of crime, in appropriate circumstances, to meet the perpetrator. That allows them to ask questions. The most obvious question that victims of crime have is, “Why did this happen to me?” Restorative justice is designed to answer the important questions that victims often have, to which the court is often unable to provide answers.
Restorative justice is not meant to make a sentence more lenient, or to be something that a victim or perpetrator is forced to go through. Obviously, there will be circumstances where that would not be appropriate. Not every victim will feel like they want to take part, and it would not be appropriate for every victim. For example, in some cases a child would not be appropriate for restorative justice. Equally, there will be perpetrators who will not engage constructively—use the opportunity only to further traumatise their victim. The amendment is meant not to mandate the use or promotion of restorative justice, but simply to make it a right in the victims code that a victim of crime be made aware of the potential for restorative justice, and allowed to access it where necessary, after taking into consideration all the required safeguarding provisions.
I hope that the Minister will say a little more about the work that his Department wants to do in the restorative justice space. I appreciate that he may not want to accept the amendment today; however, I would be grateful for some reassurance that the Bill will enable and empower victims who want to go through the process. I stress that RJ must always be victim led. It always has to come from the victim. I would welcome some reassurances from him on how the Bill could achieve that.
Rob Butler
My hon. Friend makes some important points about restorative justice. I have seen it work very effectively both in the courts and in the prison and youth justice systems. Does he agree that there are already some very successful examples of restorative justice, particularly in our prison, probation and youth offending services, and that quite a lot of work is already being done—including for children, who he said he would probably rule out of scope? In fact, restorative justice can be very effective for under-18s.
Elliot Colburn
I am grateful to my hon. Friend. I would certainly not agree with a blanket ban for children, but I appreciate that additional safeguarding concerns would need to be considered for young victims. I agree with him; I have seen this myself. I have been invited to witness such sessions happening in prisons, and some amazing work is going on. The results cannot be understated. Something like 80% to 90% of offenders will not go on to reoffend if they go through restorative justice, according to studies. I cannot remember the name of the university that conducted them, but I am happy to clarify it to the Minister later.
Janet Daby
I thank the hon. Member for making such a great speech in favour of restorative justice; I am with him on that point. Restorative justice is effective in prisons, courts and education, but would he agree that if it is to have the necessary impact in prisons, it needs to be fully resourced?
Elliot Colburn
The APPG that I chair produced a report into the state of restorative justice in the UK, and looking at resourcing RJ was one of our nine recommendations. I ask the Minister to take a look at those recommendations again to see how we can better allow victims to access RJ when they feel that they want to and when it is appropriate.
I do not deny that excellent work is being done. I commend the practitioners and prisons engaging with the issue, but far too often I hear from victims who want to go through this process that they find it a struggle—or else victims have no idea that restorative justice exists. That is why enshrining it as a right in the victims code would help to raise awareness and ensure that victims can access it if they want to. I will bring my remarks to a close, but would be grateful to hear any reassuring remarks from the Minister.
Edward Argar
I pay tribute to my hon. Friend for the work that he and the all-party parliamentary group that he chairs do on this important issue. I am grateful to him for giving us an opportunity to debate restorative justice. He and I have spoken about it in the past; as I have highlighted, we are committed to the effective use of restorative justice in appropriate cases.
I am grateful to my hon. Friend for highlighting Ray and Vi Donovan’s case and situation as an example of how restorative justice can work well. I know that when it is delivered in the right circumstances it can result in improved victim satisfaction and reduced reoffending, bringing benefits to victims, offenders and their communities.
We support local agencies providing restorative justice in the devolved model that came in a few years ago. We looked to police and crime commissioners to fund services locally, as they are best placed to assess local need. We are encouraging greater co-commissioning between police and crime commissioners and regional probation directors.
The second code principle in the Bill is already clear that victims
“should be able to access services which support them (including, where appropriate, specialist services)”.
That covers all types of support services. We would consider it to include restorative justice services where appropriate.
The code also goes further. Right 4—to be provided with information when reporting a crime—is clear that victims are entitled to information from the police about restorative justice and how to access such services in their local area, and that all service providers will consider whether victims would benefit from this information at any stage of the criminal justice process. We are also using the Bill to create a duty for agencies to raise awareness of the code, including information about restorative justice, so that victims know what services they can, and should, receive.
I hope my hon. Friend will not press his amendment; he said that it is essentially a probing amendment. Specifying different types of support services in primary legislation might, we fear, inadvertently narrow the current broad coverage, but he raises some very important points.
First, we must be cautious of a general entitlement to access to restorative justice. That would not always be appropriate because offenders must voluntarily agree to participate, as my hon. Friend highlighted. To give him some hopefully positive news, I am open to considering alternative approaches that the Government can assist with to promote the effective use of restorative justice in appropriate cases. I read his report carefully and, as luck would have it, I have written to him—I think I signed it today—responding over four pages to his nine recommendations. In that letter to him, I offered to meet with him outwith this Committee to engage on these issues and see what more we can do to work together. Given that, I hope my hon. Friend will not press his amendment to a vote. I look forward to exploring the issue with him in more detail in that meeting, should he wish to take me up on it.
Elliot Colburn
I am grateful to the Minister. That is incredibly reassuring and I look forward to reading his response when it lands. On the basis of those reassurances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Sarah Champion
I beg to move amendment 38, in clause 2, page 2, line 25, at end insert—
‘(e) should be able to access appropriate compensation.’
The Chair
With this it will be convenient to discuss the following:
Amendment 39, in clause 2, page 2, line 25, at end insert—
‘(3A) In accordance with subsection (3)(e), the victims’ code must include provision requiring that—
(a) all victims of child sexual abuse, including online-based abuse, are entitled to compensation under the Criminal Injuries Compensation Scheme,
(b) victims with unspent convictions, whose offences are linked to the circumstances of their sexual abuse as a child, are entitled to compensation under the Criminal Injuries Compensation Scheme, and
(c) victims of child sexual abuse may apply for compensation under the Criminal Injuries Compensation Scheme within a 7 year period of whichever of these two dates is the later—
(i) the date the offence was reported to the police, or
(ii) if the offence was reported whilst the victim was a child, the date the victim turned 18.’
This amendment would provide that all victims of child sexual abuse (CSA), including online, are entitled to compensation under the CICS and that those with unspent convictions directly linked to the circumstances of their abuse can access compensation. It would also extend the period by which victims can apply.
Amendment 55, in clause 2, page 2, line 25, at end insert—
‘(3A) In accordance with section 1(2)(b), the victims’ code must include provision requiring that all children born of rape are entitled to compensation under the Criminal Injuries Compensation Scheme.’
Sarah Champion
I will speak to amendments 38 and 39, which are linked to the criminal injuries compensation scheme. Victims of violent crime in England and Wales may be awarded compensation under the publicly funded criminal injuries compensation scheme. I have campaigned extensively to reform that scheme and the Criminal Injuries Compensation Authority that administers it.
When I started supporting victims of child sexual exploitation in Rotherham, it soon became apparent that CICA was simply not fit for purpose. An agency that should have existed to support victims seemed instead to believe that its duty was to find any excuse possible not to make an award. Several constituents were affected by that. Indeed, many had claims rejected on one of the three grounds: first, that they were out of time; secondly, that they themselves had unspent criminal convictions; or, appallingly, thirdly, that they had somehow consented to their own abuse. That last reason was recognised to be deeply wrong and legally contradictory. I am pleased to say that it has now been removed, although not before it caused much harm.
The other two grounds remain in force and are particularly problematic for victims of child sexual exploitation, many of whom may take years to disclose their abuse. The trauma of doing so may further delay launching a claim. Furthermore, a well recognised and understood part of the grooming process is that abusers may involve victims in other criminal activities as a further form of coercive control, which is also seen as blackmail and, indeed, an insurance policy. It goes without saying that we should not be holding symptoms of abuse against victims when determining whether their suffering merits compensation.
Amendments 38 and 39 will ensure that all CSA victims, including online, are entitled to compensation under the CICS and that those with unspent convictions linked to the circumstances of their abuse can access support. The period by which victims can apply for compensation is also extended.
There is broader support for change in the scheme. The independent inquiry into child sexual abuse—IICSA —published its interim report in April 2018. That report, along with the “Accountability and Reparations Investigation Report” published in 2019, made several recommendations to improve access to the scheme for victims and survivors of child sexual abuse. Despite that, concerns about the scheme remain, in that its continued focus on crimes of violence fails to consider that child sexual abuse and particularly online sexual abuse may occur without physical contact.
Under the 2012 scheme, no award is made to applicants who have unspent convictions for offences that resulted in certain sentences or orders. That fails to recognise the impact of child sexual abuse and specifically that abuse may have directly contributed to instances of offending; there is often, for example, a close link between sexual exploitation, grooming and criminal behaviour. There is also a two-year time limit for making a claim. Even though that may be extended where there are exceptional circumstances, such a period is inadequate for victims and survivors of child sexual abuse, who often do not report their abuse until adulthood.
Victim Support strongly believes that the unspent conviction rule unfairly penalises some victims of violent crime, in particular the most vulnerable, such as the victims of child sexual abuse. It says that victims of child sexual abuse, sexual exploitation and grooming are often targeted by their abusers, in part because they are vulnerable, lack adequate support and supervision and may be perceived by offenders as easy to manipulate on those grounds. Such victims are often from challenging backgrounds and therefore, for various reasons, may be more likely to have criminal convictions prior to the abuse taking place. That should not be held against them.
Further, the fact of being abused in itself makes it more likely that a person will themselves go on to commit an offence, either as part of the abuse and under the coercion of the abuser, or in reaction to the abuse. It is now widely recognised that victims of crime have an increased likelihood of committing an offence. The relationship is particularly acute where the individual has suffered sexual abuse. Ministry of Justice data reveals that almost a third—30%—of prisoners experienced emotional, physical or sexual abuse as a child.
The 2008 criminal injuries compensation scheme, which the current scheme replaced in 2012, also set out that an award for compensation would be withheld or reduced to reflect unspent convictions, but it allowed for claims officers to use their discretion if they considered that there were exceptional reasons. That claims officers could use their discretion to decide on levels of reduction was also set out in the accompanying guidance for the scheme, which makes it clear that claims should not be rejected where the convictions are related to their child sexual abuse.
The Government should reinstate the ability of claims officers to use their discretion in this area and remove completely the blanket ban on making any payments to the victims, which is set out in paragraph 3 of annex D to the guidance on the criminal injuries compensation scheme. Victim Support would also support changes to the criminal injuries compensation scheme time limits rule. Currently, claims made outside of the two-year limit can be considered by CICA in exceptional circumstances, but that does not provide enough clarity or certainty for victims and is therefore not fit for purpose. The policy disproportionately affects victims of sexual abuse, who are concerned that their claim may affect their ability to receive justice and that the fact they have made a claim will be used against them in court.
It is welcome that, as part of the review into criminal injuries compensation, the Government undertook a review of the exceptional circumstances clause and found that 63% of cases submitted outside the time limit still received a reward. However, that still shows that over a third of claims submitted outside of the time limit were denied.
Additionally, the Government’s review does not consider the victims who did not submit a CICA claim because they believed they were too late to do so. The court backlogs also mean that victims concerned about applying to the CICS before the trial ends, who are already struggling to cope with the delays, will have the additional risk of being ineligible. I urge the Minister to listen to my constituents, victims, charities such as Victim Support, and the independent inquiry into child sexual abuse, and accept the changes.
Jess Phillips
I rise to speak to amendment 55, which I tabled to clarify that one of the groups that has now been included in the Bill—that is, children born of rape—will also be able to access the criminal injuries compensation scheme as victims of crime. Many brilliant people have been involved in the campaign to ensure that children born of rape are considered to be victims: Daisy, who has been involved with Daisy’s law; the Centre for Women’s Justice; and the very passionate campaigner and Rotherham sexual exploitation victim Sammy Woodhouse.
I want to read a letter that I received about this issue:
“Dear MP
I hope my email finds you well. I am the son of Sammy Woodhouse. I am aware you have publicly supported my mothers campaign, which I would like to thank you. I am writing you this letter with her help and support as I have never reached out to an MP before, I have done so as this is a campaign that is very close to me.
I wish to express how difficult it has been for me to learn that I was conceived by sexual violence and some of the challenges I have had to face. I want the government to take it seriously and to help others. Not only have I felt very alone but I have struggled with my Identity, my mother was raped by my ‘father’ and he is known as the UK’s most notorious rapist, this alone faced its challenges and left me confused. Emotionally I have closed off and shut down and at times I’ve wanted to scream from the rooftops.
Despite me never being identified publicly, we were known within our community so therefore I was subjected to death threats, followed and had my picture taken, called ‘rape baby’ and told I would also become a rapist. We had to move home and schools and even then people came to our home and posted our address online. I’ve been targeted and lied about on social media, and professionals encouraged me to have a relationship with my father rather than safeguard me. This was all done by the people in our local community even when my mother remained anonymous. I was 12 years old. There are many like me.”
Edward Argar
I turn first to amendment 38, which seeks to include victim compensation as an additional victims code principle, and I am grateful to the hon. Member for Rotherham for her explanation of it. I should put on the record at this point that I am aware of the hon. Lady’s tireless work to support victims of crime, particularly victims of child sexual exploitation. She and I have worked on this issue in my previous incarnation in this role and I know that during my interlude in the Department for Health and Social Care—and, very briefly, in the Cabinet Office and the Treasury—she has continued relentlessly to pursue this cause. Now that I am back in the Ministry of Justice, it is nice that we can pick up some of the issues that we were discussing back in 2018 and 2019.
I agree with the sentiment behind the amendment. It is quite right that, in appropriate circumstances, victims should receive compensation for the harm that they have suffered as a result of a criminal offence. She made one point that was particularly interesting. When I have previously talked to staff at the Criminal Injuries Compensation Authority, I have found that their preference is for less discretion and more prescription, from the perspective that it makes their job easier because that is black and white—that is the decision—rather than there being any potential grey area that causes uncertainty for claimants and applicants.
Responding to the hon. Lady’s key point, however, I will say that this issue is already reflected in the victims code. Right 5 for the victim is:
“ To be provided with information about compensation”.
That includes an entitlement for victims to be told about how to seek compensation, and is covered by the existing code principle in the Bill that victims should be provided with information to help them to understand the criminal justice process.
Compensation can come from several sources: court-ordered compensation; the taxpayer-funded criminal injuries compensation scheme; and civil compensation claims. The code provides for victims to be made aware of routes through which they might obtain compensation for the harm or loss that they have suffered, but the code is not in itself a mechanism for providing compensation and the eligibility of individuals for compensation is determined by the courts or other bodies, such as the Criminal Injuries Compensation Authority, that operate independently of Government. For that reason, it is our view that the existing entitlement to information about compensation is the right one for the code.
I turn to amendment 39, which seeks to provide that victims of child sexual abuse are entitled to and can access compensation under the statutory criminal injuries compensation scheme by including it as a requirement in the victims code and changing the scope, time limits and unspent convictions eligibility rules of the scheme.
As I have already alluded to, I am aware of the hon. Lady’s long-standing interest and work in ensuring support for victims of child sexual abuse and exploitation. I recall that she raised concerns about time limits and other aspects of the scheme in a debate, which I think I answered, on the Government’s victims strategy in 2018. I welcome her contributions to the review of the scheme that we announced in that strategy. However, our view is that the victims code is not a mechanism through which changes to the scheme can be made. Changes such as those that the amendment seeks to bring about need to be made in accordance with the primary legislation under which the scheme is made and to follow the appropriate procedures for any changes. The Criminal Injuries Compensation Act 1995 requires that before a new or amended scheme can be made, a draft must be laid in Parliament and approved by a resolution of each House.
We are actively considering the issues that the hon. Lady raises in relation to the scheme itself, which of course reflect recommendations made by the independent inquiry into child sexual abuse. We have committed to consult on whether to change the scope and time limits of the scheme, and we hope to do so in the coming months. I caveat that by saying that, of course, the scheme must be financially sustainable; that will be one of the elements that we will need to consider.
As the hon. Lady will know, this will be the third consultation of our review, as we have already consulted on reforms to the scheme as a whole in 2020, which was the process that she worked with me to kick off when I was last in the Ministry of Justice, and then again in 2022 on whether to amend the unspent convictions eligibility rule, following—I believe—a court judgment requiring that review.
My intention is to publish a single response to all three consultations as soon as they are all completed and as soon as is practically possible. I am seeking, as the hon. Lady will see, to get through some of the unfinished business that I had in the Department when I left it and went to the Department of Health and Social Care. We have brought this proposal forward. There are a number of other issues that still remain in my in-tray that I recall from when I worked with her pre-pandemic.
For those reasons, I encourage the hon. Member for Rotherham not to press this amendment to a vote, having put on the record her clear views.
I turn to amendment 55, which was tabled by the hon. Member for Birmingham, Yardley, and seeks to provide that children born of rape are entitled to and can access compensation under the statutory criminal injuries compensation scheme by including it as a requirement in the victims code. As the hon. Lady has already alluded to, the Bill explicitly recognises, for the first time in legislation, people born of rape as victims in their own right. This will help them to access vital support services. I pay tribute to the hon. Lady and to other campaigners who have relentlessly pursued this cause and successfully campaigned for this change.
In relation to criminal injuries compensation, as the hon. Member for Birmingham, Yardley may know, the statutory scheme has eligibility criteria that are approved by Parliament. The core purpose of the scheme is to provide compensation to victims who suffer a serious physical or mental injury attributable to their being a direct victim of a crime of violence. The scheme defines a crime of violence and specifies when a person will be eligible for a compensation payment for injury directly resulting from that crime. Under the current scheme, the birth mother of a child born of rape would be entitled to apply for compensation as the direct victim of a sexual assault and a crime of sexual violence. An additional payment can be made where a pregnancy directly results from the sexual assault.
The scheme also provides for compensation to be available to a person who sustains injury while taking an exceptional and justified risk in the course of limiting or preventing a crime, or if they have been present at or witnessed an incident or its immediate aftermath in which a loved one sustains a criminal injury. Provisions in the Bill do not affect eligibility for the scheme and, as I have already said, the victims code is not a mechanism through which changes can be made. A change such as that which the amendment proposes would need to be made in accordance with the primary legislation under which the scheme is made.
I hope that I can give the hon. Member for Birmingham, Yardley a little bit of reassurance, as I did for the hon. Member for Rotherham. We are in the process of finalising the third and final part of the consultation. When we have done that, we will come forward to Parliament with our response, and of course that will have to be laid before Parliament as a new scheme. I hope that might give both hon. Members the opportunity to raise these issues in the correct way, when the scheme is being considered by the House.
Sarah Champion
I welcome all that the Minister is doing. If I can help or support him in any way, obviously I will. The victims code is a fantastic tool, but it is only useful if victims know about it. Unfortunately, therein lies the nub of most of our arguments. However, I have heard what he said, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
I am afraid that I am now leaving you for the rest of the Bill, because my fellow Chairmen are taking over. May I thank you for a very interesting and moving day? Thank you so much.
Digital Markets, Competition and Consumers Bill (Tenth sitting)
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Public Bill CommitteesRead Full debate Digital Markets, Competition and Consumers Bill 2022-23 View all Digital Markets, Competition and Consumers Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 June 2023 - (27 Jun 2023)
The Chair
With this it will be convenient to discuss the following:
That schedule 8 be the Eighth schedule to the Bill.
That schedule 9 be the Ninth schedule to the Bill.
That schedule 10 be the Tenth schedule to the Bill.
Clause 137 stand part.
That schedule 11 be the Eleventh schedule to the Bill.
Clause 138 stand part.
Government amendments 40 to 44.
That schedule 12 be the Twelfth schedule to the Bill.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)
The final clauses in part 2 concern measures that cut across the Competition and Markets Authority’s competition tools. Clause 136 introduces schedules 8 to 10 to the Bill. The Competition Act 1998 and parts 3 and 4 of the Enterprise Act 2002 already allow the CMA to impose civil penalties for non-compliance with information requirements. The destruction of documents that have been required to be produced, and the provision of false or misleading information, are criminal offences, but schedule 8 introduces powers for that conduct to be subject to civil penalties. It also reforms existing civil penalties to ensure that the maximum penalties are set at an appropriate level.
Schedule 9 introduces powers enabling civil penalties to be imposed for breaches of competition remedies. Competition remedies are interim measures, commitments and directions under the Competition Act 1998 and interim measures, undertakings or orders under parts 3 and 4 of the Enterprise Act 2002. Schedules 8 and 9 also enable the Secretary of State and Ofcom to impose penalties if they are given false or misleading information in relation to their functions under the relevant regimes. They also give the Secretary of State the power to impose penalties to enforce compliance with remedies accepted or imposed in relation to mergers and markets with public interest considerations. Civil penalties will be applicable unless the party has a reasonable excuse, and that will be assessed case by case.
The maximum penalty for an undertaking or person who owns or controls an enterprise that is not complying with information requirements is 1% of the business’s worldwide turnover. Daily penalties of up to 5% of worldwide daily turnover will also be available in some cases while the non-compliance continues. For breach of remedies, the maximum penalty is set at 5% of worldwide turnover and daily penalties of up to 5% of worldwide daily turnover while the breach continues. The penalties imposed on other persons, who will generally be individuals, are capped at £30,000, or up to £15,000 daily while the breach continues. The CMA is required to produce statements of policy regarding the operation of its penalty powers. In doing so, it must consult the sector regulators and receive approval from the Secretary of State. Schedule 10 amends the legislation that gives the sector regulators their concurrent competition powers, so that they need not unnecessarily duplicate the work that they need to do to prepare statements of policy.
Clause 137 introduces schedule 11, which amends the Competition Act 1998 and parts 3 and 4 of the Enterprise Act 2002 to make express provision regarding the giving of information notices outside the United Kingdom. The schedule enables the CMA to give an information notice to a person who is the subject of a Competition Act 1998 investigation, or a person who is or has been a party to a merger review. The schedule also enables the CMA to give information notices to third parties with a defined UK connection. Compliance will be enforceable through the civil penalty regime. The schedule also amends provisions on methods of serving documents to reflect modern business practices; for example, it allows service of documents via email.
Government amendments 40 to 44 are technical drafting amendments to schedule 12. The schedule, which is introduced by clause 138, applies appropriate parliamentary procedures to new regulation-making powers created by the Bill, and makes other consequential and technical amendments. I commend the amendments to the Committee and hope that the clauses will stand part of the Bill.
Alex Davies-Jones (Pontypridd) (Lab)
Labour supports the intention behind the provisions in this grouping. Of course there should be provisions about the attendance of witnesses, as outlined in clause 135. The same can be said about ensuring that the Bill has sufficient legal powers on civil penalties, should the need for them arise in the regime. The provisions in clause 136 and schedules 8 to 10 are adequate, and we support them. The same can be said for clause 137 and schedule 11, which make provisions regarding the service of documents and the extraterrestrial—sorry, extraterritorial; I know we are talking about digital markets, but we have not reached that far yet—application of notices under part 1 of the Competition Act 1998 and parts 3 and 4 of the Enterprise Act 2002. Of course those laws must work in alignment with the intentions of the Bill. Clause 138, Government amendments 40 to 44 and schedule 12 are all sensible, and part of a rigorous procedure, so we do not oppose them.
Question put and agreed to.
Clause 136 accordingly ordered to stand part of the Bill.
Schedules 8 to 10 agreed to.
Clause 137 ordered to stand part of the Bill.
Schedule 11 agreed to.
Clause 138 ordered to stand part of the Bill.
Schedule 12
Orders and regulations under CA 1998 and EA 2002
Amendments made: 40, in schedule 12, page 284, line 5, at end insert—
“(1A) In subsection (4) omit ‘, 94A(6)’.”
This amendment removes a reference in section 124(4) of the Enterprise Act 2002 to section 94A(6) of that Act, which is being repealed by paragraph 11 of Schedule 9 to the Bill.
Amendment 41, in schedule 12, page 284, line 7, at end insert—
“(aa) omit ‘, 94A(3) or (6)’;”.
This amendment removes a reference in section 124(5) of the Enterprise Act 2002 to section 94A(3) and (6) of that Act, which are being repealed by paragraph 11 of Schedule 9 to the Bill.
Amendment 42, in schedule 12, page 284, line 12, after “section” insert “94AB(9) or”.
This amendment corrects a drafting omission by providing that regulations under section 94AB(9) of the Enterprise Act 2002 (inserted by paragraph 11 of Schedule 9 to the Bill) are subject to annulment in pursuance of a resolution of either House of Parliament.
Amendment 43, in schedule 12, page 285, line 10, after “section” insert “167B(9) or”.
This amendment corrects a drafting omission by providing that regulations under section 167B(9) of the Enterprise Act 2002 (inserted by paragraph 17 of Schedule 9 to the Bill) are subject to annulment in pursuance of a resolution of either House of Parliament.
Amendment 44, in schedule 12, page 285, line 23, at end insert—
“(8A) In subsection (10), for ‘174D’ substitute ‘174A(10)’.”—(Paul Scully.)
Paragraph 26 of Schedule 8 to the Bill inserts a new subsection (10) into section 174A of the Enterprise Act 2002 which replaces the existing provision made by section 174D(10) of that Act (which is being repealed by paragraph 28(12) of that Schedule). This amendment amends the Enterprise Act 2002 to replace a reference in section 181(10) of that Act to the latter provision with a reference to the former.
Schedule 12, as amended, agreed to.
Clause 139
Overview
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 59.
Clauses 140 to 142 stand part.
That schedule 13 be the Thirteenth schedule to the Bill.
That schedule 14 be the Fourteenth schedule to the Bill.
Clause 201 stand part.
Paul Scully
Part 3 of the Bill provides for two regimes for the civil enforcement of consumer protection law: a court-based regime and a direct enforcement regime for the CMA.
Clause 139 provides an overview of part 3. Clause 140 sets out the scope of the court-based and CMA direct enforcement regimes. First, the regimes are limited broadly to the trader’s acts or omissions that amount to commercial practices—that is, interactions between traders and consumers. Secondly, to be subject to enforcement action, a commercial practice must harm the collective interests of consumers. Thirdly, the scope of the laws that can be enforced remains broadly the same as that which can be enforced under current law. Government amendment 59 ensures that the Bill reflects existing law, namely the Consumer Protection from Unfair Trading Regulations 2008.
Clause 141 provides for an infringing practice to be in scope of enforcement if the trader committing it meets at least one of the following conditions: the trader has a place of business in the UK; the trader carries on business in the UK; or where the infringing commercial practice occurs as part of activities directed to consumers in the UK by any means. Those tests mean that the jurisdictional scope of the current court-based enforcement regime for consumer law is replicated.
Clause 142 limits the application of the enforcement regimes to a commercial practice that breaches an enactment, obligation or rule of law listed in schedules 13 or 14 to the Bill.
Clause 201 gives a delegated power to the Secretary of State to amend schedules 13 and 14—that is, to add, remove or vary the enactments and enforcer authorisations listed in those schedules. The continuing effectiveness of both regimes will depend on their ability to adapt to reflect the evolution of consumer protection law over time. As new consumer protection laws are made and old ones repealed, there must be a mechanism to ensure that they fall into or out of the scope of the enforcement regimes. If the enforcement landscape and the remits of individual enforcers change, there must be a facility to reflect those changes in the statutory framework. The power is subject to the affirmative procedure, so hon. Members will have due opportunity to scrutinise any provisions made under it.
Schedule 13 lists the enactments, obligations and rules of law that may be enforced through the court-based regime, which replaces part 8 of the Enterprise Act 2002 for conduct going forward. The schedule also makes clear which enforcers may enforce each enactment.
Schedule 14 sets out which enactments the CMA may enforce through its new direct enforcement powers. Its scope comprises core consumer protection legislation and a limited number of sector-specific regulations where CMA direct enforcement is desirable. That reflects the CMA’s specific remit and competence to tackle market-level issues that adversely affect consumers or affect their ability to make choices.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Ali. I thank the Minister for his opening remarks, and it is a pleasure to follow my hon. Friend the Member for Pontypridd in speaking on this important Bill.
Clause 139 provides an overview of the structure of part 3, which sets out the court-based regime for the civil enforcement of consumer protection law to protect the collective interests of consumers. As the Minister said, that allows for two regimes of civil enforcement—a simplified courts-based regime and the CMA’s direct enforcement regime.
The regime provides for consumer law enforcers to apply for, and the courts to make, enforcement orders, interim enforcement orders, online interface orders, to which only the CMA may apply, and interim online interface orders to which, again, only the CMA may apply. An enforcer or the court could decide to accept an undertaking from the enforcement subject instead of issuing an order, a mechanism that there should be the option for and is in line with the participative approach of working in the Bill.
Chapter 3 would also provide for certain enforcers—defined in clause 143, which we will go on to debate—and the court to attach remedies, known as “enhanced consumer measures”, to enforcement orders and undertakings. Importantly, chapter 3 would provide new powers for the courts to impose monetary penalties on enforcement subjects who have infringed the consumer protection laws within scope of part 3.
I wish to signal the Opposition’s broad support for part 3 and the measures it introduces to ensure swifter enforcement of consumer protection law and more effective redress for consumers. That is a sentiment shared by consumer groups. As one example, the written evidence submitted by Consumer Scotland expressed broad support for part 3, noting how it:
“simplifies and bolsters the enforcement of penalties for relevant infringements of consumer protection law under part 8 of the Enterprise Act 2002.”
I hope we will work constructively through the Committee to ensure that the consumer provisions in the Bill are as robust and fair as possible, and that we will not see the watering down of any measures currently drafted.
Clause 140 defines the scope of the enforcement regime set out by part 3. It sets out how a trader has committed an infringement of the part 3 enforcement regime if their act or omission harms the collective interests of consumers, as well as meeting the UK connection conditions set out in clauses 141, and the specified prohibition condition set out in clause 142.
The Opposition support clause 140 as a necessary element in introducing a robust enforcement regime. It is a stronger consumer protection, which acts where a continuation or repetition of an act, such as misleading information or an omission of information, could continue to harm future customers unless remedied. However, I ask the Minister for clarity on one aspect of the provision. As well as setting out the scope of enforcement, the clause in subsection (2) also defines relevant terms such as “trader” and “consumer”. The explanatory note states that in relation to the definition of “consumer”:
“A consumer must be an individual and so excludes body corporates. The individual must be acting wholly or mainly outside of their business.”
While it is welcome that individual consumers are being protected through the enforcement regime, could the Minister clarify where that leaves small businesses or the self-employed? The notes suggest that the individual is still a consumer when acting for dual purposes. It is clear to me, as a shadow Minister for business looking at the needs of small businesses in particular, that plenty of British businesses are negatively impacted by rogue traders supplying them, whether with office equipment or digital services. There is a segment of those businesses that could be caught inside or outside the definition depending on its interpretation.
It would be helpful if the Minister clarified whether the Government plan, for example, for microbusiness customers to be included in the consumer protection regime. Who would decide if it was 60% consumer or 60% business for the purposes of this legislation? It may be a product that is being delivered, and the business may be run from home. I would be grateful for the Minister’s comment and clarification on that point.
Amendment 59 replaces “trader” with “person”. It ensures that the definition of commercial practice for the purposes of part 3 of the Bill includes an act or omission by a trader relating to the promotion or supply of a consumer’s product to another consumer. I would welcome some clarification from the Minister. Will the amendment mean that where a consumer or private individual commits what would be an infringement by a trader when selling a product to another consumer—for instance through eBay or Facebook Marketplace—they are liable for enforcement action, as a business would be? This is an important area of protection for consumers, so I would be interested to hear more about how it would work in practice. If I understand the provision correctly, it could significantly expand the enforcement regime beyond just businesses.
Clause 141 sets out how traders meet the UK connection condition, which, as set out in clause 140, forms part of the scope of the enforcement regime. It sets out how a commercial practice meets the UK connection condition if at least one of three conditions are met. Those conditions are that the trader has a place of business in the UK, that the trader carries on business in the UK, meaning that their business operates in the UK, perhaps without an office, or that the trader carries on activities that are in any way directed to consumers in the UK. The conditions are necessarily broad but important for the protection of UK consumers. We support clause 141.
Clause 142 defines the specified prohibition condition, which is the final condition setting out the scope of the enforcement regime in part 3. In short, the clause sets out that a commercial practice meets this condition if it breaches provisions listed in schedule 13 and 14. Schedule 13 sets out the enactments, obligations and rules of law to which the court-based enforcement regime applies. The list is very comprehensive, and we support its contents. In particular, we note that chapters 1 to 4 of part 4 of the Bill are included in the schedule, which is welcome. I would welcome assurances from the Minister that the Government consulted widely among stakeholders regarding the compiling of the enactments of the schedule, so that we can be confident that there are no omissions. In addition, I invite the Minister to correct me if I am wrong in my understanding of how the schedule could be amended. There are other schedules with delegated powers, but I wanted to understand what the process would be here if there was a question of needing to amend the schedule if legislation were updated in the future. I would be grateful for clarification on that.
Similarly to schedule 13, schedule 14 lists the enactments to which the CMA’s direct enforcement regime applies. Like schedule 13, this schedule appears to be comprehensively drawn and is thus supported by the Opposition. I note that it also makes reference to other measures of the Bill that will be going through. On the theme of seeking clarity from the Minister, I would welcome assurances that a wide range of stakeholders and legislation has been consulted and reviewed to ensure that this is a comprehensive schedule. I would also ask what the process is for updating the schedule if required in the future.
Clause 143 lists public designated enforcers who would be able to use the court-based enforcement regime. We are pleased to see that this includes the CMA, trading standards, the Financial Conduct Authority, the Information Commissioner’s Office and Ofcom, among others. Certain private designated enforcers would also be able to use the court-based regime, such as the Consumers’ Association. We welcome the clause and the inclusion of a comprehensive list of public designated enforcers, but have the Government consulted with the groups they are planning to include in the clause? Were any groups or bodies that expressed an interest in being designated enforcers omitted from the clause?
Subsection (3) gives the Secretary of State a delegated power to add to or remove a body as a public or private designated enforcer, or to amend its entry. Regulations made under the clause would be subject to the affirmative procedure. However, the power could not be used to remove or vary the enforcement powers of the CMA, trading standards or the Department for the Economy in Northern Ireland. We welcome the protection of those bodies’ powers, but I would like clarification from the Minister on private designated enforcers.
The clause names the Consumers’ Association as a private designated enforcer, but no other group. While I note the criteria in clause 144 for designating a body as a private designated enforcer, it would nevertheless be helpful if the Minister spelled out how a body becomes a private designated enforcer. Would it have to apply? I would also be grateful for clarification of the basis on which the Secretary of State may remove, or seek to remove, a public or private designated enforcer—an issue that I will discuss further.
Clause 144 specifies the criteria that must be satisfied for the Secretary of State to designate a body as a private designated enforcer. This is an important clause. The criteria establish certain minimum standards of governance, transparency and competence that a person must meet to carry out enforcement action, and we welcome the clause. However, I refer the Minister to my question about how the Government expect people to become private enforcers. Would there be an application? Perhaps he would set out the process, and the basis on which he envisages withdrawing designation from an enforcer. Would that be because some conditions are no longer met? Would it be because some sort of complaint is received? It would be helpful to understand how those changes could be made.
Clause 145 identifies the categories of person an application for an enforcement order could be made against, and the types of infringements that they must have committed. An enforcer, as designated by clauses 143 or 144, would be able to apply to the court for an enforcement order or an interim enforcement order if the enforcer considers that they have engaged in, are engaging in or are likely to engage in a commercial practice that constitutes a relevant infringement, or if they are an accessory to such a practice.
We welcome the clause, but I would welcome further clarification on a few issues. First, the legislation states that
“an enforcer may make an application in respect of a relevant infringement”.
Did the Government consider changing “may” to “must”, or are they confident that enforcers will always apply for enforcement in cases where they have identified an infringement? I would welcome hearing the reasoning behind the choice made. Secondly, subsection (4) limits the power to apply for the imposition of a monetary penalty to public designated enforcers. Would the Minister clarify why that power has been withheld from private designated enforcers?
Paul Scully
Let me try to cover some of those questions. On microbusinesses and small business, this is effectively a standard definition that, yes, does exclude microbusinesses, because it replicates provisions in the Enterprise Act. The obvious question then is, “How do microbusinesses and small businesses get any redress in these examples?” but the business protection regulations would cover that, and they are not within the scope of this change. However, any of the changes that the hon. Lady requested would largely come under the affirmative procedure.
The hon. Lady also asked whether the Government had consulted widely on these enactments. Although we consulted widely on the Bill when I was a Minister in the Department for Business, Energy and Industrial Strategy, these provisions just restate existing law, so we just wrote that into the Bill, instead of spreading the provisions across statutory instruments. It would therefore not necessarily have been particularly informative to have consulted on them.
The hon. Lady asked about private designated enforcers and how an enforcer might be added to the list. The Secretary of State can by regulations add applicants as private designated enforcers that are able to use the court-based enforcement regime. Again, those regulations would be subject to the affirmative procedure, to ensure appropriate parliamentary scrutiny. Any organisation applying for that status would need to provide evidence to the Secretary of State that it meets the designation criteria in clause 144(1), which would likely include evidence as to its legal status and constitution, a list of directors, examples of where it has protected the collective interests of consumers, and so on.
The Secretary of State will in due course set out more detailed guidance on the evidence and information that applicant organisations should provide when seeking designation. The Government clearly want to guarantee that those designated are able to protect the collective interests of consumers but are prevented from using that privileged position to seek any commercial gain or competitive advantage. They therefore intend that any private designated enforcer that fails to meet the criteria would have its designation altered or withdrawn by the Secretary of State.
Question put and agreed to.
Clause 139 accordingly ordered to stand part of the Bill.
Clause 140
Relevant infringements
Amendment made: 59, in clause 140, page 88, line 18, leave out “trader” and insert “person”.—(Paul Scully.)
This amendment ensures that the definition of “commercial practice” for the purposes of Part 3 of the Bill includes an act or omission by a trader relating to the promotion or supply of a consumer’s product to another consumer.
Clause 140, as amended, ordered to stand part of the Bill.
Clauses 141 and 142 ordered to stand part of the Bill.
Schedules 13 and 14 agreed to.
Clause 143
Enforcers
Question proposed, That the clause stand part of the Bill.
Paul Scully
Clauses 143 and 144 set out the public and private bodies that have enforcement powers under the court-based enforcement regime, which we have touched on, and restate and update part 8 of the Enterprise Act 2002.
Clause 143 sets out two categories of enforcer: public designated enforcers and private designated enforcers. The clause also gives the Secretary of State powers to add or remove a public designated enforcer or to amend its entry, and to add, remove or vary the entry of a person as private designated enforcer. These powers are subject to criteria set out in clause 144.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Is there a reason why trading standards is not on this list? It would be the go-to for a consumer or business under existing law, so why is it absent from this list?
Paul Scully
As I say, we are essentially bringing across the existing law, but there is no reason why the Secretary of State cannot look at that in time. In clause 144, we are setting out the detail and criteria that must be met when a person who is not a public body is added by the Secretary of State as a private designated enforcer.
Neil Coyle
If a consumer believes that they have been sold something that is counterfeit or damaging, which might meet the “detrimental effects” test, where would they go to find out how to address that issue? If a British company has a licence and a trademark, and it sees someone selling fake goods online, thereby undermining the company’s work and trademark in the UK, how does it go about addressing that? In the evidence session, a question was asked about raising awareness of changes to legislation. Could the Minister take a brief moment to explain those two routes to getting change?
Paul Scully
If I have got this right, that goes back to the hon. Gentleman’s previous example. Let me correct my earlier comments. I talked about the fact that we are bringing existing legislation across into the Bill. The local trading standards enforcement regime comes under weights and measures, which is specified in the Bill. It is an old term for a modern-day service, and it is encapsulated in the regime. Clearly, businesses will go through the traditional routes to get consumer redress, which can include going through the trading standards regime.
Neil Coyle
When witnesses from trading standards sat here two weeks ago, John Herriman and David MacKenzie told us that there needed to be an awareness-raising campaign about the changes. Has the Minister done that, or is that intended to come after the enactment of the Bill? How will that come about?
Paul Scully
A lot of that will be done through our relationship with Citizens Advice and trading standards. When I covered this brief a year ago and held the position currently held by the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), we continually did work for consumers, whether that was on this kind of redress, work through the CMA or work through Citizens Advice and trading standards. Clearly, given that we are changing the regime to make things faster and more effective, we will want to shout about it, because people need to be aware of it, and that will be part of a wider awareness scheme. I cannot give the hon. Gentleman chapter and verse on the campaign, because I am not running it.
Neil Coyle
Perhaps rather than chapter and verse, just one sentence would be fine. Will the Government resource Citizens Advice to provide the new information on a whole new legislative change in consumer rights?
Paul Scully
As I say, the Government do a lot of work jointly with Citizens Advice to market, campaign on, and raise awareness of these regimes.
Neil Coyle
Apologies for coming back on this, but that is not an answer. Citizens Advice came to the Work and Pensions Committee just a few weeks ago to say that its advisers, many of whom are volunteers, face the most dire circumstances of their 80-year history; the circumstances are worse than they were during the second world war. That is its assessment of the financial situation that its bureaux face in trying to help people. Is the Minister saying that Citizens Advice will be resourced to provide the additional information?
Paul Scully
I will not conflate this issue with the matter of the resources for Citizens Advice’s broader work, but we already work with Citizens Advice to raise awareness of its work, and will continue to do that together. On any additional duties, clearly we want to make sure that Citizens Advice is as well resourced as it can be. A lot of its work is essentially similar to what is proposed, but we are trying to make it faster for it to offer remediation. That is the whole purpose of this work. We are simplifying and consolidating the criteria that apply under the current court-based regime. That guarantees that those designated as private enforcers will have the independence, competence and expertise required to protect consumers and their independence.
Question put and agreed to.
Clause 143 accordingly ordered to stand part of the Bill.
Clause 144 ordered to stand part of the Bill.
Clause 145
Applications
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 146 to 154 stand part.
Clause 169 stand part.
Paul Scully
Clauses 145 to 154 restate and update provisions in part 8 of the Enterprise Act 2002. They empower consumer enforcers to apply for, and the civil courts to make, court orders to prevent or stop infringing practices.
Clause 145 provides enforcers with the power to apply to court for an enforcement order or an interim enforcement order. An application may be made where a person has engaged in, is engaging in or is likely to engage in an infringing practice, or is an accessory to such a practice. The clause also gives public designated enforcers a new power to apply for the imposition of a monetary penalty for past or continuing infringing practices.
Clause 146 maintains the CMA’s leadership and co-ordination role by empowering it to give directions to other enforcers regarding who can make an application to court.
To ensure applications to court are made only when necessary, clause 147 requires enforcers to engage in appropriate consultation with the suspected infringing party or accessory before making an application for an enforcement order or interim enforcement order.
Clause 148 empowers the court, in response to an application under clause 145, to make an enforcement order against a person it finds has engaged, is engaging or is likely to engage in an infringing practice or is an accessory to such. As an alternative to making an order, the court may accept an undertaking from the infringer or accessory. Orders or undertakings must direct the subject to achieve compliance with the law.
Clause 149 gives the court a discretionary power to include enhanced consumer measures that it considers to be just, reasonable and proportionate in an enforcement order or an undertaking. Enhanced consumer measures, which are defined in clause 213, are steps an infringer or accessory may be required to take to provide redress to affected consumers, ensure compliance with the law, or offer consumers more effective choice. They are vital to ensuring that consumers are compensated and that infringements are remedied.
Clause 150 gives the court a new power to impose a monetary penalty of up to £300,000 or 10% of the recipient’s global turnover—whichever is higher—for past or continuing infringing practices. This provision is at the heart of the Bill’s reforms to consumer protection. It is imperative that there are consequences for breaking UK consumer law to signal that illegal practices will not be tolerated. Recognising that these penalties may be significant, the clause gives the recipient the right to appeal the decision to impose the penalty, its nature or the amount on the merits, in addition to their existing appeal rights.
Clause 151 empowers the court to make an interim enforcement order or accept an undertaking against a suspected infringer or accessory. To exercise the power, the court must consider it expedient that the infringing practice is prohibited or prevented immediately, and a final order must be likely to be granted.
Clause 152 gives the CMA the power to apply to court for an online interface order, or an interim online interface order. It can do that where it considers a person has engaged in, is engaging in, or is likely to engage in, an infringing practice. The reach of online traders and the complexity of the online marketplace has increased. That makes it more critical than ever that the CMA has the power to apply to the court to address infringing content online.
Clause 153 provides for courts to make online interface orders to require changes to online content and interfaces. This could include content removal, displaying warnings, restricting access or deleting a domain name. These powers are available only when the order is necessary to avoid the risk of serious harm to the collective interests of consumers and when there are no other available means within this chapter that would be wholly effective in stopping the infringement.
Clause 154 empowers the court to make interim online interface orders where it is expedient that the infringing practice is stopped or prohibited immediately and a final online interface order would be likely to be granted.
Clause 169 sets out two conditions that must be met before enhanced consumer measures can be included: in an undertaking given to a private designated enforcer, or in an undertaking given to the court or an order made by the court following an application by a private designated enforcer. The clause provides the framework to ensure that where enhanced consumer measures are used by private designated enforcers, it is done appropriately and with the end goal of solely benefiting consumers.
Seema Malhotra
I have already made some remarks on clause 145, but I will just echo my final question. I asked the Minister about the power for public designated enforcers to apply for the imposition of a monetary penalty and why that power has been withheld from private designated enforcers. Clause 146 refers to CMA directions to other enforcers. As the Minister has outlined, the clause introduces provisions such that if an enforcer other than the CMA seeks similar action on applying for an enforcement order for a particular infringement, it may direct which enforcer can make the application. That could lead to, for example, the CMA directing that an application for an order can be made only by itself.
We support the clause, but does the Minister’s Department expect the CMA to engage constructively with other enforcers to ensure that the most suitable enforcer is the one that is allowed to make the application? The underlying policy argument is important; we would not want to see multiple enforcers seeking to take action against the same business for the same infringement. I would like some clarity on how that is expected to work.
Clause 147 would provide that where an enforcer thinks a relevant infringement has occurred or is likely to occur, it must consult the enforcement subject before making an application for an enforcement. Subsection (2) introduces a requirement on the enforcer to alert the enforcement subject to the possibility of a monetary penalty being sought alongside an enforcement order. The explanatory notes state that the policy intent is that prior consultation may quickly lead to the relevant infringement ending and make court action unnecessary. We welcome the clause as a necessary part of the enforcement process, and in the spirit of opportunity for co-operation that underpins the new regime.
Under clause 148, the court would be able to make an enforcement order if, on an application from an enforcer under clause 145, it finds that the enforcement subject has engaged, is engaging or is likely to engage in a commercial practice that constitutes a relevant infringement or is an accessory to the infringing practice. As an alternative to an order, the court would be able to accept an undertaking. Under subsection (3), in determining whether to make an enforcement order the court would have to take into consideration whether the enforcement subject had given an undertaking under clause 155 to a public designated enforcer, or clause 177 in respect of the infringing practice. Where the court makes an enforcement order, it would be required under this clause to indicate the nature of the infringing practice and direct the enforcement subject to comply. We strongly welcome the clause. It is a necessary step in ensuring that the courts have adequate enforcement powers over companies that are causing detriment to consumers.
I have a question for the Minister regarding clause 148(8). It states that as part of an enforcement order, an undertaking may include a further undertaking by the respondent to publish “the order” and “a corrective statement”. As the explanatory notes state, the policy intent behind the subsection is to prevent the company
“further distorting consumers’ purchasing decisions”
by making them aware that a company has had to change its practices. I welcome the subsection as a common-sense step to ensure full clarity for consumers in instances in which enforcement action has been taken, but will the Minister clarify whether he expects the court always to require the publication of the order and a corrective statement? Surely, it would be simpler and better for the consumer for that undertaking to be included in every enforcement order, so that there was confidence that the consumer will be as informed as possible.
Clause 149 will enable the court to include, in an enforcement order or interim order, a requirement to take, as part of enforcement orders,
“such enhanced consumer measures as the court considers just and reasonable.”
The court would first have to consider whether the proposed measures were proportionate and in doing so consider
“the likely benefit of the measures to consumers…the costs likely to be incurred by”
the enforcement agent and
“the likely cost to consumers of obtaining the benefit of the measures.”
We welcome the clause as a further necessary element of the consumer protection and enforcement regime that we are seeking to deliver.
Clause 150 confers a new power on courts to impose a monetary penalty on a company for infringing consumer protection regulations. The Opposition welcome the clause, but why has it taken so long to get to this point? Turning to the details of the monetary penalties, subsection (5) sets out that, where the enforcement subject has a turnover that can be determined, a fixed amount penalty must not exceed £300,000 or, if higher, 10% of the total value of the enforcement subject’s turnover. We support those penalty thresholds, but could the Minister expand on why the legislation has landed on £300,000 as a maximum penalty if it is less than 10% of the company’s turnover? Is that an arbitrary figure or one that has been consulted on and calculated to ensure the maximum deterrent so that companies do not infringe the legislation? Will the Minister clarify the source of the figure?
Finally, I would welcome further clarification from the Minister on clause 150(8), which provides an enforcement subject who is required to pay a monetary penalty with a right to appeal the decision to impose a penalty, its nature or amount on the merits, in addition to their existing appeal rights. I would be grateful if the Minister could clarify the appeals threshold, which appears to be different from the judicial review threshold for companies with strategic market status, as set out earlier in the Bill. Was the threshold set for an informed reason? There seems to be a lower threshold for consumer protection infringements.
In addition, has the Minister considered whether the more merits-based approach could lead to companies, particularly larger ones with significant legal capacity, drawing out the process of monetary penalties being imposed on them by pursuing lengthy court appeals? I want to ensure that we have understood the matter correctly, so I would welcome the Minister’s clarifying the point and saying whether those are unfounded concerns. If they are well founded, we want to have a look at the issue more closely. In short, the Opposition welcome the clause, because we want to ensure that the measure is a robust as possible in deterring companies from engaging in practices that harm consumers.
Under clause 151, the court will be able to make an interim enforcement order on an enforcement subject. It will be able to make such an order if it considers that the subject
“has engaged…or is likely to engage in a commercial practice which constitutes a relevant infringement”.
In addition, interim orders can be made if
“it appears to the court that if the application had been an application for an enforcement order it would be likely to be granted, and…the court considers it is expedient that the infringing practice is prohibited or prevented immediately.”
That includes being able to make an interim enforcement order without notice.
We welcome the clause in principle, as a positive contribution to ensuring that swift action is taken where necessary to protect consumers. However, it would be helpful if the Minister could clarify the scope or give examples of how the power may be used. Examples specified in the Bill papers include preventing a misleading advert from being made public and enforcing the withdrawal of unsafe goods, but it would be helpful to understand the threshold for an order to be made without notice. Is it, for example, where there is current or imminent harm? It is important that that is clarified so that consumers and those who would be enforcement subjects can understand how the power could be used by the court, and so that there is no question about scope.
Clause 152 enables the CMA to apply to the court for an online interface order or interim online interface order in respect of a person that it considers has engaged, is engaging or is likely to engage in a practice that constitutes a relevant infringement. Subsection (3) sets out a jurisdictional test that limits the CMA’s power to apply for an order in respect of a third party overseas; it may do so only if the person is a UK national, the person is habitually resident in the UK, the firm is established in the UK, or the firm carries on business in the UK.
Is the Minister confident that those criteria cover all scenarios in which companies could be involved in misleading practices towards UK consumers, whether they are resident here or not? Why is it just the CMA that has the power to make such applications, and not other public or private enforcers, such as trading standards or local weights and measures authorities? We welcome clause 152, but it would be helpful to understand that further. There has been some discussion of the important role of local trading standards in our enforcement regimes.
Clause 153, which necessarily follows clause 152, gives the court a discretionary power to make an online interface order in response to an application from the CMA under clause 152. We welcome clause 153 and recognise the importance of including digital practices that harm consumers. However, as with clause 152, will the Minister expand on why local weights and measures authorities will not be given powers to apply for orders alongside the CMA?
The Bill represents an opportunity to update the powers of trading standards so that they can operate more effectively in the 21st century. The Chartered Trading Standards Institute notes that officers regularly have to exercise powers of physical entry in order to seize documents that they may wish to use in criminal proceedings, but it also raises the issues that officers have accessing filed documents that are not physical. My question is about how trading standards powers should be reviewed and updated in line with those of other enforcers, and the opportunity to do that in the context of the Bill.
Finally, under clause 154, following an application from the CMA, the court will be able to grant an interim online interface order, where it is considered that a final online interface order would likely be granted but that an interim order is needed to end an infringement immediately. Subsection (2) will permit the court to grant an interim order without giving notice to the enforcement target.
We welcome the provisions, but I have similar questions —they are relevant—to those I asked about the earlier clauses.
Paul Scully
Let me try to cover as many of those questions as I can. The hon. Lady asked about the possibility of multiple enforcers in process at the same time. In effect, we are restating the existing arrangements, which have been working. They work with the CMA as the gatekeeper, so the CMA would have to be notified when action has been taken—it can filter anything going on in that regard—and it would have to co-ordinate the approach.
On clause 148, and court powers to make orders and penalties, the hon. Lady talked about subsection (9) on whether an undertaking may include a trader publishing it in a corrective statement and whether I, as a Minister, would always expect that to happen. It is discretionary. The enforcer may require that as appropriate.
On the penalties, the £300,000 basically sits in the middle of the pack internationally. If we look at the regimes around the world, where penalties are imposed on individuals, New Zealand’s consumer protection system has £100,000 and Canada’s consumer regime has £450,000. We sit within that, looking at the international comparators.
Seema Malhotra
Is the Minister saying that the decision to go with the £300,000 was just because it was in the middle of the pack?
Paul Scully
It was a fair balance after looking at international regimes—a fair comparison with similar regimes around the world. Similarly, the 10% penalty is reflected in penalties across other regimes.
The hon. Lady also asked about the CMA being able to enforce and why private enforcers did not have the same powers. Only the CMA may impose penalties. Private enforcers may seek a penalty in court, but the CMA is the only body able to issue penalties directly.
Finally—I have probably missed a couple of questions, but I will review them later just in case—on the interim notes, the hon. Lady made a fair point about stopping the immediate harm. I talked about domain names, as well as removing adverts and such things. It is about being able to act quickly. The whole point about the changes to the regime is to ensure that we make it not only as effective as possible in the modern world, but as fast as possible.
Question put and agreed to.
Clause 145 accordingly ordered to stand part of the Bill.
Clauses 146 to 154 ordered to stand part of the Bill.
Clause 155
Acceptance of undertakings by enforcers
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to debate clauses 156 to 160 stand part of the Bill.
Paul Scully
Clauses 155 to 160 restate and enhance provisions in part 8 of the Enterprise Act 2002 that govern the acceptance and enforcement of undertakings by enforcers and the courts.
Clause 155 provides a power for enforcers to accept, vary and release an undertaking from an infringer or accessory. Undertakings may be accepted only where they include provisions that will stop or prevent the allegedly infringing practices. The clause will allow enforcers to continue using co-operative enforcement means, which can lead to faster resolution of consumer harms and reduce the volume of applications for court orders.
Clause 156 enables enforcers to include enhanced consumer measures in undertakings accepted under clause 155. Enforcers must consider those measures to be just, reasonable and proportionate. Clause 157 sets out requirements for enforcers when varying or releasing undertakings that ensure procedural fairness for enforcement subjects. Clause 158 allows for further court proceedings for breaches of undertakings and orders made by the court, giving the court a new power to impose a civil monetary penalty for the breach of an undertaking given to the court.
Clause 159 allows a public designated enforcer to make an application to the court for a consumer protection order if it considers that an undertaking given to it has been breached. If the court is satisfied that that is the case, it may make the requested order, impose a monetary penalty or both. A penalty may be imposed only in cases where the breach was without reasonable excuse.
Clause 160 sets out the types of penalties and the maximum penalty amounts that can be imposed by the court for failure to comply with undertakings given to it or to public designated enforcers. The court has the discretion to impose a fixed amount penalty of up to £150,000 or 5% of global turnover, or a daily rate penalty of up to £15,000 or 5% of global turnover accruing over the days when non-compliance continues, or a combination of both.
Seema Malhotra
Clause 155 provides that where an enforcer could make an application to the court for an enforcement order or an interim enforcement order, it may accept an undertaking from the enforcement subject. Subsection (2) sets out the scope of such an undertaking, which is the infringer or the accessory agreeing not to continue or repeat the infringing practice. The Opposition strongly support the clause as it provides necessary flexibility in the consumer protection regime.
We heard during evidence, particularly from the CMA, that the ability for companies to work co-operatively with enforcers to comply with the new regime is an important part of having the fairest and best possible enforcement regime. Where possible, we should ensure that enforcement is done through co-operation. In evidence to the Committee, the CMA said:
“This is not a regime where we want to operate behind closed doors. The whole design of the regime is a participative approach where we will engage with a broad range of stakeholders, businesses and consumers as we consult on designation, design the conduct requirements, and then enforce against them.”––[Official Report, Digital Markets, Competition and Consumers Public Bill Committee, 13 June 2023; c. 6, Q2.]
As a result, we welcome the clause.
Clause 156 enables an enforcer to include enhanced consumer measures as part of an undertaking from a company, if the enforcer considers them just and reasonable. The enforcer will be obliged to consider the likely benefits and costs of the measures as part of its assessment of their proportionality. In particular, it will consider the costs of the measures themselves to the enforcement subject, as well as the administrative costs. As with clause 149, we welcome clause 156 as a further necessary element of the new consumer protection regime.
Clause 157 sets out the process to be followed when an enforcer proposes to materially vary or release an undertaking that it has previously accepted. Specifically, the process requires the enforcer to give notice to the respondent of its intention to vary or release an undertaking, and to consider any representations made in accordance with the notice. The notice must include the time by which representations may be made to the enforcer. We welcome this clause, which provides clarity for the enforcement regime, the enforcement subject and the consumer in the event of a necessary change. What timescale does the Minister expect the process to work to in most cases, or will it be entirely up to the enforcer? It would help both Parliament and the enforcement bodies to understand the timings envisaged in this process, to be sure that they strike the right balance between being flexible and proportionate and are fair to both the enforcement subject and consumers.
Clause 158 would apply in circumstances where the court makes a consumer protection order against an enforcement subject or a member of its corporate group, or where it has accepted an undertaking. In the event of a failure to comply with the order or undertaking, the clause enables the enforcer that made the original application or any other enforcer to make a further application to the same court. In effect, the court will be able to act in respect of not only non-compliance with an undertaking, but the infringing practice and any related consent or connivance with it by an accessory. The court will be empowered to impose a monetary penalty, regardless of whether the enforcement subject has a reasonable excuse for non-compliance, reflecting the serious nature of breaching an undertaking given to the court. We welcome the clause as a way of providing robust enforcement and punishment mechanisms for failure to comply with the regime, but I would welcome clarification from the Minister on subsection (8). Like clause 150, that subsection provides an enforcement subject who is required to pay a monetary penalty the right to appeal the decision to impose a penalty, its nature or amount on the merits, in relation to their existing appeal rights. I am not sure I completely grasped his previous argument on whether there is a lower appeals standard for those elements of the Bill?
Clause 159, similar to clause 158, sets out the process for when a company fails to comply with an undertaking accepted by the enforcer or the courts. The powers granted to the courts and the process by which the enforcer must apply reflect the provisions in clause 158 and, in the same way, we welcome them. However, the same question is raised about what looks like a lower threshold for appeals than in other parts of the Bill.
Finally, clause 160 sets out further details around the monetary penalties the courts may impose for failures to comply under clauses 158 and 159. We welcome any steps to improve enforcement action through the imposition of monetary penalties and therefore support the clause in principle. Despite that welcome, I must ask the Minister why, when it comes to failure to comply with undertakings, the monetary penalty in the clause, which is £150,000, is less than that in clause 150, where the court can issue penalties of up to £300,000? Similarly, clause 160 refers to 5% of the company’s turnover versus 10% in clause 150. I may not understand some of the Government’s rationale behind those different amounts. What are the reasons for the differences in the thresholds and those lower amounts?
Paul Scully
I picked up three questions. The reason the hon. Lady could not follow my argument about appeals from the first bit was because that was the bit I forgot to answer. I will cover that because they relate to the same thing.
Timescales will be up to the enforcer. None is set, but there is a general duty of expedition on the CMA set by the Bill overall. On appeals as they relate to both sections—
Seema Malhotra
Is the timescale deliberate, or has the question simply not been fully addressed? It is important to ensure clear expectations of the timing of some of these processes.
Paul Scully
I think the reason is the wide range of remediation events that may come before the enforcer to tackle, so they are being given that flexibility, but with an understanding that there is a general rule of expedition on the CMA. That is why we have approached this as we have.
The appeals regime is very different from the bits of the digital markets regime that we talked about earlier. In that case we were talking about a small number of firms with strategic market status, whereas any trader can be subject to this regime. The new monetary penalties that we are introducing are significant. A merits-based appeal is therefore important, because of the range of different-sized companies involved, to ensure fairness and to make sure that the issues involved relate to settled law rather than novel regulations covering digital conduct. Appeals are less likely to be disproportionately lengthy, because the digital market involves a more novel approach, which is why we were worried about extended appeal processes.
As for why thresholds are lower in this part of the Bill than for infringements, infringements, at £300,000, are clearly more serious. What we are talking about here—a breach of undertaking to a court—is still serious, but if someone is stepping down, we believe it is more proportionate to set the threshold at the slightly lower amount of £150,000.
Question put and agreed to.
Clause 155 accordingly ordered to stand part of the Bill.
Clauses 156 to 160 ordered to stand part of the Bill.
Clause 161
Notification requirements: applications
Question proposed, That the clause stand part of the Bill.
Paul Scully
Clauses 161 to 164 restate and update provisions in part 8 of the Enterprise Act 2002 that enable the CMA to perform co-ordination functions across the consumer enforcement landscape. This will help to prevent duplication of enforcement, which imposes an unnecessary burden on traders and wastes public money.
Clause 161 requires enforcers to notify the CMA of their intention to apply for certain court orders. Clause 162 imposes a requirement on enforcers to inform the CMA of any undertakings given to them. Clause 163 imposes a requirement on trading standards departments in England and Wales to notify the CMA if they intend to start proceedings for an offence under an enactment listed in part 1 of schedule 13 to the Bill. Clause 164 empowers UK courts to notify the CMA of relevant convictions and judgments. Bringing convictions and judgments to the attention of the CMA that it might not otherwise be aware of will allow the CMA to consider exercising its enforcement power under this part of the Bill.
Seema Malhotra
It is a pleasure to speak to clause 161 and the other clauses in this group. Under clause 161, as the Minister outlined, enforcers would be able to notify the CMA before applying for an enforcement order, and could only apply for an order 14 days later, or seven days later when applying for an interim order. The powers also allow the CMA to agree to shorten these wait times. The Bill’s explanatory notes explain:
“The policy intent underlying the notification requirement in this clause is for the CMA to be able to perform a coordinating role in relation to enforcement under this Part. The notification requirement will enable the CMA to facilitate the sharing of information between enforcers”,
and that is outlined as mitigating
“the risk of traders facing multiple actions in relation to the same infringing practice”
—a point that we have raised before. We are supportive of the clause and the principle of enabling the enforcement regime and ensuring that it is joined up and efficient in practice. I seek the Minister’s clarification on whether the Government have had discussions with other public enforcers on the provisions in the clause. Is it the case, as he has said before, that the CMA broadly has a co-ordinating role and other powers, and is that carrying on an existing practice and pattern of engagement between those enforcing bodies?
Clause 162 requires enforcers to notify the CMA of the terms of any undertaking given to it under clause 155 and of the identity of the persons giving it. Again, that is important to enable the CMA to fulfil its co-ordination role. As with clause 161, we support the provisions in the clause. Clause 163 introduces provisions requiring local weights and measures authorities, such as local trading standards bodies, to give the CMA notice of its intention to start proceedings for an offence under schedule 13, which we have debated. The authority must also notify the CMA of the outcome of those proceedings.
The policy intent, as explained by the explanatory notes, is to enable the CMA to play its co-ordinated role granted to it in previous clauses. The notes provide a potential example whereby the CMA could inform one authority that another is prosecuting, or that an enforcement order has been granted in respect of the same infringing practice. That is an important part of the co-ordinating role because it demonstrates that it is not just about the CMA being informed, but the CMA ensuring that other relevant enforcers are informed of what other enforcers are doing. That is then a streamlined and efficient process that does not hit the enforcement subject more than once on the same matter.
Clause 164 confers a power on the courts to notify the CMA of convictions and judgments it makes that may not have been bought to its attention. That is a common-sense provision. However, I would welcome further clarification from the Minister specifically on subsection (2). It states that the court
“may make arrangements to bring the… judgment to the attention of the CMA”.
We know the strain and pressures that our court system is under. I ask the Minister why the provision introduces a power as opposed to a duty. If the CMA is to have, as is intended, a co-ordinating role where it is in the picture on all the relevant information related to those enforcement subjects, are there any circumstances in which the Government believe the courts may not need to inform the CMA? In that case, could the Government clarify what those circumstances might be, or where they might consider it not necessary for the CMA to have this information if it considers it to not be relevant to the function it carries out?
We need to remember that this is not just a function being carried out for today; this is where the CMA will be able to have a record of enforcement measures, any breaches and any other information that would be relevant to any considerations in the future. I would be grateful to understand from the Minister why that important and common-sense provision is a power as opposed to a duty.
Paul Scully
The CMA being able to issue permission to bring enforcement procedures is consistent with the position under part 8 of the Enterprise Act 2002. We respect and understand the expertise of all enforcers, including sector regulators, so the CMA is playing a co-ordination role to effectively share information between enforcers, and guarantee that enforcement actions are not duplicated. That will mitigate the risk of a trader facing multiple actions for the same infringement practices. The Government have discussed the provisions with other enforcers, and the CMA already has memorandums of understanding with other enforcers.
On the question of why there is a new reporting requirement in clause 164, actually it is not new. It was already established under part 8 of the Enterprise Act. Again, it ensures that the CMA can consider exercising its enforcement powers where appropriate. It only gives the court the power to notify judgments and convictions to the CMA. It is already there under the Enterprise Act, and that is why we have brought it in here.
Seema Malhotra
Perhaps I could put the point about power versus duty to the Minister again? I understand that many aspects of the Bill have been brought together from other areas of legislation. We have to ask the question within the context of the new regime, which is different to how the situation was prior to the legislation coming in, whether that is worth reviewing. We are talking about a regime in which the CMA is now a co-ordinating body, in which there may be different ways action can be taken and where information from the court could be material. There is not as much of a duty to pass that information on under clause 164, but that could be relevant information that is not there for a matter in the future.
I again draw the Minister’s attention to the massive backlog we have in the courts, and the administrative challenges with some of those procedures. The best intentions may not be a reality, and that may then have consequences for the regime we are trying to set up to be as robust, predictable and efficient as possible.
Paul Scully
I take the hon. Lady’s point, but I would say that it has been directly transposed. It is a power not a duty in the Enterprise Act, and that is where we have worked from.
Neil Coyle
There is an alternative. There was a suggestion from trading standards representatives of a take-down power, which would bypass the longer route that adds an administrative burden and places the onus on businesses and individuals. Can the Minister explain or furnish us in writing as to the rationale for not seeking the take-down power and a more immediate means of addressing a problem?
Paul Scully
I or the relevant Minister will certainly write to the hon. Gentleman on that basis.
Question put and agreed to.
Clause 161 accordingly ordered to stand part of the Bill.
Clauses 162 to 164 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
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Import and Sale of Fur
(10 months, 2 weeks ago)
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Giles Watling (Clacton) (Con)
I beg to move,
That this House has considered the import and sale of fur.
It is a pleasure to serve under your chairmanship, Dame Maria. As Members are aware, the welfare and protection of animals is an issue that our constituents care deeply about. In this country, we have a proud track record of leading the charge on the international stage in animal protection law. Only last year, we marked the bicentenary of the UK’s first animal protection law—indeed, the first national animal protection law in the world—the Cruel Treatment of Cattle Act 1822, known as Martin’s Act. We in the UK lead the way.
In our ever-more connected world, British people are both informed about and concerned by the plight of animals, not just in this country but overseas, and we are rightly and especially concerned when animals suffer overseas to be turned into products that eventually reach the UK as a consumer market or important trading hub. Today’s debate is about our current double standard. In the UK, fur farming is banned on the grounds of ethics and welfare, but we continue to allow the import of farmed fur from animals that have suffered overseas. The debate is about recognising that when it comes to protecting the welfare of sentient animals, it is not enough simply to prevent cruelties occurring in our own backyard. We must look beyond our shores and ensure that we do not perpetuate the infliction of cruelty overseas by trading in cruel products such as fur.
The Government’s 2021 action plan for animal welfare pledged to explore action on the UK fur trade. It noted that although it is illegal to import seal, cat and dog fur,
“it is still possible to import other fur from abroad”.
In June 2021, the Government conducted a call for evidence on the fur market that received almost 30,000 responses, although they have not yet released a summary of those responses or a policy position. I hope we might have some progress on that point, and to hear from my hon. Friend the Minister about it today.
Today’s debate on the UK fur trade might be seen as a debate about an animal welfare problem. Indeed, animal welfare will feature significantly in my remarks. However, it is also a debate about the trade in an unsustainable product that causes great environmental harm and the production of which carries significant and extremely concerning human health risks through a strong association with the spread of zoonotic diseases, including covid-19. But let us begin with the animals themselves and their experience in the global fur trade.
Fur farming has rightly been banned across all nations of the UK since 2003. We were the first country in the world to ban it and we blazed a trail that 18 countries have followed, with legislation for fur farming bans currently progressing through the Parliaments of Romania and Lithuania. The shrinking list of countries that continue to allow the farming of animals for their fur includes Finland, Poland and China. Across all countries where animals are farmed for their fur, the conditions are broadly similar.
Carol Monaghan (Glasgow North West) (SNP)
I thank the hon. Member for securing the debate on an important issue that our constituents care deeply about. He talks about other countries that have continued to farm fur, but of course here we have a ceremonial hat worn by the King’s Guard that is made from the pelt of Canadian brown bears. Is it time to look for alternatives, given that right in the centre of any big parade we have that symbol of cruelty to animals?
Giles Watling
I am glad the hon. Lady mentioned the fur cap. I think it takes one bear to produce one cap. A lot of the caps are ancient and historic, but we now have alternative products that are very effective and hard wearing. There is no reason why we cannot move to that. We will need to talk to the Ministry of Defence about that and take it further. It is something I would be glad to pick up, and I thank the hon. Lady for her intervention.
Let me return to the condition of animals on fur farms, including foxes, raccoon dogs, mink and chinchillas, which are kept in wire battery cages that typically are no larger than 1 square metre, according to the industry’s own literature. They spend their short lives—typically around eight to nine months—in such cages. They are never permitted to run, dig, swim or hunt, or to engage in any of the other behaviours known to be vital to their physical and mental welfare.
Nadia Whittome (Nottingham East) (Lab)
I thank the hon. Member for securing such an important debate. He is making extremely powerful comments, but what does he make of the comments of Mike Moser, the former chief executive officer of the British Fur Trade Association and former director of standards at the International Fur Federation? Mike Moser spent 10 years defending the fur trade, but he now dedicates his life to being an anti-fur campaigner, and he confessed that
“neither welfare regulations nor any industry certification scheme, would ever change the reality of these animals being stuck in tiny wire cages for their entire lives.”
Do not those comments add to the argument that there is no such thing as humane fur farming?
Giles Watling
I could not agree more. In fact, I shall use that very quote later in my speech. The hon. Member will find that we agree wholeheartedly on the issue.
Specifically in the case of mink, of which an estimated 20 million a year are farmed in tiny wire cages, veterinarians and welfare experts point out that as they are naturally solitary and wide-ranging animals in the wild, being kept row upon row, just centimetres from their equally unfortunate neighbours, is doubtless very stressful for them. Such an environment, and such cramped and barren conditions, comprehensively fail all scientific measures used to ensure that animals are kept in conditions that meet their welfare needs, such as the five freedoms of animal welfare and the five domains. Unsurprisingly, such conditions lead to physical and psychological suffering. The suffering in those cages is ubiquitous, and the fur industry builds into its so-called welfare assurance schemes an ambition to keep the percentage of animals suffering from diarrhoea, purulent discharge from the eyes, obvious skin lesions, and severe gum or tooth infections to less than 10%.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I echo the comments of colleagues in congratulating the hon. Gentleman on securing the debate. Does he share the concerns of some about the impact of fur farms, which become reservoirs of disease, on human health? We need only look to our experience of the recent pandemic in that regard. That experience is another good reason for the UK Government to take the steps the hon. Gentleman is advocating.
Giles Watling
I thank the hon. Member for his intervention, although we seem to be on a repeat cycle as I shall refer to those very issues later in my speech. I think he will be glad to hear my remarks.
Such health problems are widespread on fur farms and are the result of the grossly inadequate conditions in which the animals are forced to live. Investigations by organisations such as Humane Society International, to which I am incredibly grateful for its support during my preparation for the debate, repeatedly show the mental suffering of those wild animals, including a high frequency of stereotypical behaviours such as pacing and rocking as well as self-mutilation and cannibalism. Despite what the fur trade might like consumers to believe, there is no such thing as humane fur farming. Industry-led assurance schemes of high welfare fur farming permit a wide range of cruel practices, including the use of battery cages and cruel traps, such as leg-hold traps and even drowning traps for beavers.
At the end of their tragic lives, mink are typically gassed to death—veterinarians tell me that that is aversive to them, which of course it is, and that it causes suffering, which of course it does—while foxes and raccoon dogs are mostly anally electrocuted. Sickeningly, investigations, including one by Humane Society International in 2020 in China, show that animals are crudely beaten to death with metal poles and even skinned alive.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making a fine speech. What brought the issue home to me was something that happened at school when I was 14 or 15. Our physics teacher, Mr Thompson, took an amber rod and showed us that rubbing it would produce a positive charge, but what he rubbed it with shook me to the core. It was a pussycat skin. He had a box of skins. He said, “It is all right; they came from abroad.” The hon. Member mentioned wild animals; that was a domestic moggy, somebody’s cat. That is what put me right off. Like the hon. Member for Glasgow North West (Carol Monaghan), I have had numerous messages from constituents on the subject.
Giles Watling
I thank the hon. Member for his intervention. He is absolutely right: it does not matter where these skins come from, we should take it very seriously and consider legislating heavily against it.
Could fur production be made humane? The simple and truthful answer is “no”, because the fur trade’s economic model remains completely reliant on battery cages. There is no humane alternative to the fur trade’s model of intensive confinement. When the Governments of Germany and Sweden brought in laws requiring that foxes be given digging substrate and, in Germany, that minks be provided with swimming water, the respective segments of the industry in those countries closed down, as it was no longer economically viable to meet the requirements of those sensible laws.
It is not only animal protection organisations, such as the HSI and the Royal Society for the Prevention of Cruelty to Animals, that are calling time on the fur trade. The former CEO of the British Fur Trade Association, Mike Moser, who was mentioned earlier by the hon. Member for Nottingham East (Nadia Whittome), resigned after 10 years defending the fur trade. In September 2020, he publicly pledged his support for the Fur Free Britain campaign to ban fur sales in the UK. It is worth reading his statement again:
“Over time I realised that whatever soundbites we devised to reassure consumers, retailers and politicians, neither welfare regulations nor any industry certification scheme, would ever change the reality of these animals being stuck in tiny wire cages for their entire lives.”
That is a good point, well made. An estimated 95% of fur traded—the majority—is from animals kept on fur farms.
Let us move on to wild animals. Wild animals trapped for their fur suffer different but similarly awful plights. In countries including the USA and Canada, such animals are frequently caught cruel leg-hold traps that have been banned in the UK since the 1950s. Animals such as coyotes and racoons can suffer for days in those traps before they eventually succumb to the elements or dehydration or are killed. Horrifically, it is not uncommon for animals to rip or chew off limbs in a bid to escape. Such suffering is impossible to imagine, all for the purpose of a sentient creature ending up as the trim on a jacket hood or fur cap.
The case against the cruelty of the fur trade is straightforward. Less commonly understood, perhaps, is that fur farms can act as a reservoir for viruses and present a risk to public health, as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) mentioned earlier. More than 480 fur farms across Europe and north America have been affected by outbreaks of covid-19 over the past three years, with six countries confirming spillover events from fur farms back to humans. Some 20 million animals were culled to protect public health, but mink farming continues in several countries across Europe and beyond.
An outbreak of highly pathogenic avian influenza on a mink farm in Spain last autumn further raised pandemic fears, with virologists from Imperial College, London, writing that it is “incredibly concerning” and “a warning bell” for humanity. A recent statement by the World Organisation for Animal Health warns:
“Some animals, such as mink, may act as mixing vessels for different influenza viruses, leading to the emergence of new strains and subtypes that could be more harmful to animals and/or humans. Recently reported infections in farmed mink are a concern, because infections of large numbers of mammals kept in close proximity of each other exacerbate this risk.”
By importing animal fur, we are importing cruelty, and we are facilitating a trade that could very well be the source of the next pandemic.
Lastly, let me outline briefly a final, compelling reason for the Government to act to end the UK fur trade: its sizeable environmental footprint. A new report published by Humane Society International has found that among the eight materials considered, fur from minks, foxes and racoon dogs had the highest air emissions, greenhouse gas emissions, water consumption and water pollution per kilogram. The carbon footprint of 1 kg of mink fur was found to be 31 times higher than that of 1 kg of cotton, and the water consumption in fur production was found to be five times higher than that for cotton, with a kilogram of fur requiring a staggering 29,130 litres of water. The fur trade is bad news for animals, bad news for human health and bad news for the environment. An import ban, as they say in the vernacular, is a no-brainer.
Dame Maria Miller (in the Chair)
I remind Members that they should bob if they wish to take part in the debate.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
By means of an intervention, I have already said what I said about my teacher, Mr Thompson. The main point I will make is that that was then. I am quite old; that was an education in the late ’60s, in the hands of Scotland at Tain Royal Academy. Things change over time. That is precisely why the hon. Member for Clacton (Giles Watling) made the speech that he just did: things change and human opinions change. If someone talked to my three children, they would find the whole idea of the fur trade or breeding any animal to kill it by some ghastly means simply to have its skin, as has been outlined, abhorrent. There is a sense of decency out there, and I am proud that our country is saying what it is saying, and it has a lot more to say. We await the Minister’s response with great interest.
There is a sort of moral high ground. We are a nation of animal lovers, which is precisely why my constituents have been in touch with me in the way that they have. I take this opportunity to put on the record that I thank them for saying those things. I hope that we can spread the word to other nations that it is absolutely out of order to do what the hon. Member for Clacton told us about. We have only one planet together, and we are all—pretty much—sentient beings.
I have a much-loved pet cat at home called Hattie, which gives my wife and myself great pleasure; the same is true of everyone who has a pet, or, indeed, if I look out the window and see a blackbird hopping about or just a wild animal. In my constituency, we are blessed with an enormous amount of wildlife, from deer to badgers to otters, and even the occasional roving beaver, so I am led to understand. We all love that, and it makes our lives worth living.
This is a short contribution, but I sincerely thank the hon. Member for Clacton for raising the matter today. It is an honourable cause, and well done to him; I hope his constituents will see the good work he does.
Carol Monaghan (Glasgow North West) (SNP)
Like the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), I did not plan to make a speech this morning, but I take the opportunity to congratulate both the hon. Member for Clacton (Giles Watling) on introducing the debate and the other Members who took the time to participate.
We are a number of nations—four nations—of animal lovers. Since we are mentioning pets, I do not think my own pet has been on the record before, so I will ensure that I mention Wee Jean, who, in 2019, won Westminster Dog of the Year—so I will get Wee Jean on the record.
Jamie Stone
I will just point out that several years ago my cat Hattie was runner-up for the Cat of the Year award.
Carol Monaghan
I thank the hon. Member for that.
On a more serious point, we rarely have constituents getting in touch—in fact, I never have—to say “Can we keep fur imports? Can we continue doing this?” On almost everything, we usually get constituents getting in touch on both sides of the debate, so we can say that in this case the issue quite clearly has the support of the public. Many high-street brands have already banned fur, and I believe that Marks and Spencer, H&M and Adidas have all taken a stand against it. There is no reason why we need it, because there are perfectly acceptable alternatives.
I mentioned Canadian bears—I think I said the Canadian brown bear, but I meant to say the Canadian black bear, whose fur is used for hats. There are alternatives. Last year, a group brought an alternative into Parliament and said that it had been tested under lots of different conditions. The group felt that it was just stubbornness and refusal to give up tradition that meant we were continuing to use real Canadian black bear pelts for hats. We need to move on. There is no reason to be doing this.
One thing the hon. Member for Clacton did not mention was foie gras. It is a cruel method of production for a luxury food item that really is not required.
I will mention one other thing. Just a few months ago, the hon. Member for Crawley (Henry Smith) successfully introduced the Hunting Trophies (Import Prohibition) Bill and got the support of the House. That was a real show of cross-party strength on an issue, and I think we can do the same for fur. I thank the hon. Member for Clacton once again for bringing forward this issue, and I look forward to other Members’ contributions.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to see you in the Chair this morning, Dame Maria. I thank all Members for their contributions to the debate, and the hon. Member for Clacton (Giles Watling) for leading it. Many of my constituents across Coatbridge, Chryston and Bellshill have written to me on the issue and have signed e-petition 602285 on the import and sale of fur.
Banning imports of animal fur is a crucial step in upholding high standards of animal welfare. If we are to pride ourselves on our commitment to compassion and ethical practice, we must take action now to ensure that our actions are aligned with our words. The Animal Welfare (Sentience) Act 2022 was heralded by all at the time, and rightly so, but fur production has long been associated with acts of animal cruelty and unnecessary animal suffering.
The Government talk the talk, but they have dropped the ball completely on animal welfare with the shelving of the Animal Welfare (Kept Animals) Bill. Last year, rumours were swirling around the UK that the Government could back out of their promise to ban the importation of fur. At the time, the Department for Environment, Food and Rural Affairs corrected the reports, saying:
“Future legislation to ban the imports of fur and foie gras has not been ‘dropped’”.
It said that the legislation faced a lack of progress due to “limited Parliamentary time”. Considering how early the House’s business has collapsed in recent weeks, we know that not to be the case, don’t we, colleagues?
As the hon. Member for Clacton said, the UK has historically been a leader on animal rights, becoming the first European nation to ban fur farming on ethical grounds back in 2003. As consumers become more concerned about animal welfare, public health and the environment, the demand for fur products is thankfully decreasing, but the United Kingdom still imported around £55 million-worth of fur in 2019 alone, according to the UK charity coalition Wildlife and Countryside Link.
We know that there is strong public backing for a UK fur sales ban. Over 1.1 million signatures have now been collected to date, with a poll from April 2022 showing that 77% of UK voters think that the Government should ban the importation of animal products such as fur.
Jonathan Edwards
The hon. Member and I were no supporters of Brexit, but much of the talk following Brexit has been about how the UK Government are going to place animal welfare at the top of their international trade policy. Would banning the import of fur not be a huge statement that furthered that agenda considerably?
Steven Bonnar
The hon. Member makes an excellent point. The Department for International Trade has a big part to play: I would like to see a clause in our free trade deals that says that they will not be implemented if the country is involved in these practices. I will come on to a wee bit of that later on.
Early-day motion 929, in the name of my hon. Friend the Member for East Renfrewshire (Kirsten Oswald), calls for faux fur to be used so that bears are not slaughtered for fur to make ceremonial hats. The Ministry of Defence pays more than £1,700 per bearskin, and in response to a letter it said that 110 caps made from bearskin had been purchased in 2020 at a cost of £145,000 to the taxpayer, and that in 2021 a further 23 bearskin caps were purchased at a total cost of £40,000. The use of bear fur is not only wrong but a colossal waste of taxpayers’ money, particularly at a time when so many people out there are struggling to buy basic necessities. The SNP fully supports replacing those ceremonial hats with indistinguishable fake fur. As has been highlighted, there are alternatives that do not involve the suffering of wildlife to meet the fashion requirements of the MOD.
Giles Watling
I thank the hon. Gentleman for making that very good point about the fur caps that the military wear. I am sure he agrees that there are also more cost-effective ways of producing that fur.
Steven Bonnar
It is on the record that there are far more cost-effective ways of doing that, and faux fur caps last a lot longer too, so I am absolutely behind that. Nobody wants to take away the pomp and pageantry. Some people like it, and we respect the fact that it matters to people here, but there is no need for animal suffering.
The early-day motion states that the continued use of bearskin from wild bears impedes the UK Government’s efforts to strengthen animal welfare legislation and improve animal rights. That cruelty and maltreatment must not continue unabated, given that faux fur is a cruelty-free and more cost-effective alternative, as the hon. Gentleman has just outlined.
Despite all that, and despite calls from the length and breadth of the UK to protect animals and choose the humane option, the MOD has not moved. In June, the Government stated:
“The use of faux fur products for future requirements remains under review.”
That is not good enough. The Ministry of Defence uses not only bear for ceremonial caps, but black fox skin, and rabbit, beaver and hare fur, for various other items of uniform. We believe that the Ministry of Defence has serious questions to answer, and so does the Department for International Trade.
As the regulation of international trade remains a reserved matter, this is a decision that the UK Government must take on behalf of all nations of the UK. The SNP urges the Government to make the right decision, listen to the people and to morality, and prohibit the import of any new fur products. Furthermore, we call on the Department for International Trade to introduce a ban before it negotiates and signs any more free trade deals with fur-exporting nations. The challenges we face must not be used to oppose a ban, as is currently happening in some quarters. We also do not want to find ourselves bound by the terms of any trade agreement that makes a fur ban more difficult to introduce, so we must have guarantees that such terms will never be used as a bargaining chip in any negotiations.
I remind those who argue that this issue is insignificant compared with other pressing concerns that our treatment of animals speaks volumes about our society. The way we treat the most vulnerable among us, including animals, reflects our collective character. By banning fur imports, we would reaffirm our commitment to empathy and compassion, and foster a society that values the inherent worth of all sentient beings. The time has come for the United Kingdom to take that bold step and ban the import of animal fur.
Alex Sobel (Leeds North West) (Lab/Co-op)
I thank the hon. Member for Clacton (Giles Watling) for securing this important debate, and particularly for his point about the environmental footprint of fur, which, as he rightly points out, involves water and carbon usage far in excess of any other type of clothing.
I will start with a quotation:
“The UK has a world-leading record on animal welfare, and over the last decade the Government has introduced a range of measures to ensure we offer animals the care, respect and protection they deserve.”
Those were the words of the then Environment Secretary, the right hon. Member for Camborne and Redruth (George Eustice), as he launched his party’s action plan on animal welfare. I wonder how the Conservative party feels about those words now. The Government have dropped the kept animals Bill and abandoned the animals abroad Bill—two pieces of legislation that promised to cement the UK’s reputation as a global leader in animal welfare. It raises questions about whether the Government genuinely care about animal welfare.
As I am sure is the case for everyone here, my office has been inundated with correspondence from concerned constituents expressing their deep distress and disappointment with the Government’s decision to scrap their promises and renege on animal welfare measures. In particular, there is great concern about the importation of fur to our country, effectively outsourcing animal cruelty and suffering overseas—a measure that would have been included in the Bills that I mentioned. It is pertinent to remind the House that in February, DEFRA released a statement confirming:
“Future legislation to ban the imports of fur and foie gras has not been ‘dropped’”.
We now need the Minister to provide us with a straight answer on this and shed some light on why this legislation has not come forward. Has it been abandoned? I think we would all like to know.
We have had some excellent contributions. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made a moral case, reminding us that the UK is a nation of animal lovers. The hon. Member for Glasgow North West (Carol Monaghan) made the point that no constituent has ever asked us to keep the importation of fur and that alternatives are widely available. This is an “unethical”, “outdated”, “cruel” and “out-of-touch” practice—those were the words of 79% of people surveyed by YouGov in a 2020 poll about wearing real animal fur. The survey found that 93% of the British public are opposed to wearing real animal fur.
It is not just the general public. As my hon. Friend the Member for Nottingham East (Nadia Whittome) and the hon. Member for Clacton said, the former CEO of the British Fur Trade Association, Mike Moser, has pledged his support for a ban, stating:
“Over time I realised that whatever soundbites we devised to reassure consumers, retailers and politicians, neither welfare regulations nor any industry certification scheme, would ever change the reality of these animals being stuck in tiny wire cages for their entire lives”.
I have never seen such a flip from a leading exponent of a practice and industry as Mike Moser’s. That shows the need to reflect not just in the UK, but internationally, about the practice of fur farming.
Back in 2018, the Government claimed that advancing a ban on imported fur would be unlikely because of our membership of the EU. They touted Brexit as an opportunity to get the job done and promised us again that they would ban fur imports in their last manifesto in 2019. Regrettably, it seems that the opinions of the British public and experts in the field such as HSI, Four Paws, Dogs Trust, the RSPCA and Cats Protection, as well as leading international experts such as the World Organisation for Animal Health, hold little sway with the Government.
Just last week, we had Conservative MPs blocking Labour’s motion to revive the kept animals Bill, which would have outlawed fur imports. Instead, they chose to disregard animal welfare again, reneging on their own manifesto pledge and dismissing the will of the people who voted for them. Their party is out of touch and, I am afraid, out of time.
Two decades have now passed since fur farming was banned in the UK. I am proud to confirm once again that a Labour Government would take the necessary action on the importation of fur into Britain. We are committed to this. Unlike the current Government, we would base our actions on evidence, advice and morality. The Labour party has a clear plan for protecting animal welfare and looks forward to honouring the will of this nation of animal lovers. A Labour Britain will be a compassionate, fur-free Britain.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)
It is a pleasure to serve under your chairmanship, Dame Maria. It has been less of a pleasure, in many ways, to listen to colleagues’ accounts, but I thank all Members for raising awareness, which is absolutely necessary, about some of the ways animals have been kept and treated in the production of fur.
I would particularly like to thank my hon. Friend the Member for Clacton (Giles Watling) for his evidence-based, exceptionally well-written and powerful speech, and to ensure that the record remembers his work for decades on the subject of animal welfare, in this place and well before coming to this place. I thank all colleagues for bringing to our attention accounts that are deeply awful but necessary to face. I do feel that ignorance—simply not knowing about the conditions in which some fur-farmed animals are kept and the way they have been so cruelly treated and killed—would lead to the purchase of these products. Of course, this debate has expanded well beyond animal welfare to include biosecurity and environmental impacts.
As I think every speaker said, we are a nation of animal lovers. Animal welfare has been a really significant priority for the Government since 2010. Already, our standards of animal welfare are world-leading: according to the World Animal Protection International animal protection index, they are not just the best in the G7, but the best in the world. I was pleased to hear such a focus by colleagues across the House on this area today.
Since 2010, we have raised animal welfare standards for farm animals, companion animals and wild animals. The most notable legislative measures already taken include the banning of traditional battery cages for laying hens and the raising of standards for chickens to be consumed for meat. We have implemented and upgraded welfare standards at slaughterhouses and introduced CCTV. Further steps include the revamped local authority licensing regime for commercial pet services including selling, dog breeding, boarding and animal displays. We banned third party puppy and kitten sales through Lucy’s law. We introduced protections for service animals through Finn’s law. We introduced offences for horse fly-grazing and abandonment. We also banned wild animals in travelling circuses.
Our manifesto commitments demonstrate the ambition to go further on animal welfare. In 2018, we committed to bringing in new laws on animal sentience; introducing tougher sentences for animal cruelty; implementing the Ivory Act 2018 and extending it to other species; ensuring that animal welfare standards are not compromised in trade deals; cracking down on the illegal smuggling of dogs and puppies; bringing forward cat microchipping; banning the keeping of primates as pets; and banning imports of hunting trophies from endangered species.
The hon. Member for Glasgow North West (Carol Monaghan) referred to the private Member’s Bill introduced by my hon. Friend the Member for Crawley (Henry Smith). It is making sterling progress through the House, as are other private Members’ Bills—there is the work that the hon. Member for Neath (Christina Rees) is doing on the banning of shark fins, and the work that my hon. Friend the Member for Guildford (Angela Richardson) is doing through her Bill to improve animal welfare abroad in relation to advertisements.
Nadia Whittome
It is clear from the Minister’s words that she understands the importance of animal welfare and the impact that fur farming has, not just on animal welfare but on the environment and public health. Given that, can she tell us a date by which the Government will introduce an import ban on fur?
Trudy Harrison
I thank the hon. Member for her intervention. If she can be patient for just a couple more minutes, I will go into more detail about the response to the call for evidence—30,000 people responded—and the next steps in this process, but I would like to continue to explain the Government’s progress so far. We have also banned the cruel shipment of live animals, or rather there has been no shipment of live animals for fattening and slaughtering since 2020. We want this to continue, and that is absolutely why we will be bringing forward legislation in the very near future—certainly before the end of this Parliament—to ensure that it continues. We also want to ensure that, in return for funding, farmers safeguard high standards of animal welfare.
We have already delivered many of the manifesto commitments. The Government have increased penalties for those convicted of animal cruelty. We passed the Animal Welfare Sentience Act 2022 and launched a dedicated Animal Sentience Committee. We made microchipping compulsory for cats as well as dogs. We also announced an extension to the Ivory Act 2018, which came into force last year, covering five more endangered species: hippopotamus, narwhal, killer whale, sperm whale and walrus.
On top of our manifesto commitments, in 2021 we published our ambitious and comprehensive action plan for animal welfare. The plan includes about 40 different actions—steady progress is being made on the vast majority—and sets out the work we are focused on pursuing throughout this parliamentary term and beyond. Our action plan covers farmed animals, wild animals, pets and sporting animals, and it includes legislative and non-legislative reforms relating to activities in this country and abroad. Most recently, the Government supported a private Member’s Bill that paves the way for penalty notices to be applied to animal welfare offences, and we are consulting on how we should do that. We have also banned glue traps and given the police additional powers to tackle hare coursing.
As well as legislating, we have launched the pioneering animal health and welfare pathway, which sets out the way forward for improving farm animal welfare for years to come, building on the work that we have already done to improve conditions for sheep, cattle and chickens. With the pathway, we are working in partnership with industry to transform farm animal welfare, through annual health and welfare reviews with a vet of choice, supported by financial grants.
The hon. Member for Leeds North West (Alex Sobel) invited me to provide updates and reassurance on the Animal Welfare (Kept Animals) Bill. The reason that I went through our impressive track record on animal welfare was to convey confidence to Members across this House that what we set out in our 2019 manifesto will be delivered. It will not be delivered through a single Bill, because we have encountered numerous difficulties in trying to achieve that. As I said last week, the important thing is that we deliver our commitments successfully and swiftly, so we have announced that measures in the Animal Welfare (Kept Animals) Bill will be taken forward individually during the remainder of this term.
The hon. Gentleman will understand that the King’s Speech later this year will be followed by a ballot. Private Members’ Bills will then be supported by officials in DEFRA, along with other single-issue Bills, statutory instruments, legislative programmes, secondary legislation, regulation and reforms with industry.
Alex Sobel
What will the Minister do if, in the private Member’s ballot, no Member wishes to bring forward a Bill to ban the importation of fur?
Trudy Harrison
I regard that to be an incredibly low risk—nigh on impossible—given the interest that we have already had from Members looking to pursue such private Members’ Bills. I suggest that the hon. Gentleman encourages Opposition Members to apply to take a Bill forward. I can guarantee that officials in DEFRA will work incredibly diligently, as they always do, to support Members with their private Members’ Bills to ensure that they are robust, evidence-based and make the necessary progress across both Houses.
Giles Watling
I, like many others across both sides of this House, was disappointed when the Animal Welfare (Kept Animals) Bill was dropped. I listened very carefully to my right hon. Friend the Minister for Food, Farming and Fisheries when he made that announcement. My understanding is that parts of that Bill will be going through as legislation. I ask the Minister how many parts will become legislation and will the Bill eventually go through in its entirety?
Trudy Harrison
My hon. Friend allows me to say that there were six measures listed in the manifesto, and all six will be acted on through various legislative means, including primary and secondary legislation, regulation and reforms with the industry. I will be happy to meet with my hon. Friend to provide further detail, and to encourage him to submit an application in the ballot after the King’s Speech later this year. I reiterate that officials across DEFRA will provide support to ensure that Bills are delivered successfully, swiftly and in the best interests of animal welfare.
Carol Monaghan
The Minister is detailing a lot of the legislation that has passed, and we are all thankful for what has been done so far, but surely it should not be up to private Members’ Bills to make the required changes in matters such as importing fur.
Trudy Harrison
I undertook my own private Member’s Bill to ban wild animals in circuses, and I certainly found it was a rewarding way to spend my time in Parliament. The hon. Lady does not do justice to private Members’ Bills by speaking ill of them. The record is there: they are incredibly successful at gaining Royal Assent and transitioning into Acts of Parliament, and making a tremendous difference.
Trudy Harrison
I would like to make some progress on the subject of the debate brought forward by my hon. Friend the Member for Clacton, but I will give way.
Carol Monaghan
I thank the Minister. To clarify, I did not speak ill of any hon. Members bringing Bills forward; my point was that the Government should not be relying on Members to bring them forward. They should be part of the Government’s legislative programme.
Trudy Harrison
As I said, private Members’ Bills will be supported, enabled and progressed by the Government. Their success to date reinforces why I am looking forward to working with hon. Members as they bring their Bills forward. The most important thing is that measures are enacted successfully and swiftly.
As hon. Members know, fur farming has been banned domestically for over 20 years. Our legislation prohibits the keeping and breeding of animals solely or primarily for slaughter for the value of their fur. Consumer protection laws means that information given to consumers must be accurate and not misleading. As a consequence, real fur must not be sold as faux fur. We also have strict restrictions on some skin and fur products that may never be legally imported into the UK. Those include fur and fur products from cats and dogs, whose import, export and placing on the market is prohibited. Seal products, including fur and fur products, may be imported and placed on the UK market for sale only in very limited, strict conditions. They are otherwise prohibited.
We have well-established controls in place on fur from endangered species, which are protected by the convention on international trade in endangered species. We also do not allow imports of fur from wild animals caught using methods that are non-compliant with international humane trapping standards. We recognise that some countries and territories have chosen to impose restrictions on trade in fur. We will watch developments on the European citizens’ initiative “fur free Europe” petition with a keen eye.
Although fur cannot be farmed in this country—quite rightly—and the import and sale of fur from some species is prohibited, it is still possible, as hon. Members have discussed, to import and sell other types of fur from abroad, including products from caged production. It is also possible to re-export fur and fur products that have been imported. It is a complex picture, but we have begun a course of action. In our action plan for animal welfare, the Government committed to exploring potential action in the area. In line with our commitment to improving animal welfare standards, we have sought to build on our evidence. We have sought the perspective of the public, and reached out to both animal welfare organisations and organisations directly involved in the fur trade.
DEFRA published a formal call for evidence on the fur trade in Great Britain in 2021. Launched jointly with the Scottish and Welsh Governments, it asked for views on animal welfare and on the social and economic impacts associated with the trade, both on our shores and overseas. This is a key step in helping us to improve our understanding of the fur sector. In particular, we sought views on the scale and nature of domestic fur sector activity, including trading; the scale and nature of fur sector activities abroad, which are integral to our existing domestic fur sector; and individuals’ attitudes towards the domestic fur sector.
We received around 30,000 responses from businesses, representative bodies and individuals. Officials have been analysing the responses we received and have engaged directly with stakeholders to develop further our understanding of the sector; this includes meeting key representatives and animal welfare groups. We would like to use the evidence gathered to inform future action on the fur trade. A summary of responses to the call for evidence, setting out the results and the next steps in this policy space, will be published very soon.
Members rightly acknowledged the importance of biosecurity, so I will touch on some aspects of that. We note the reference to the report by Humane Society International and will consider it as part of the evidence-building process, along with other sources. As I think has been recognised today, covid-19 and its significant global impact reminds us of the importance of the interaction between humans, animals and the environment at all times and in all places. We all need to work together globally to understand better how our behaviour, our supply chains and our cultures change these interactions and create risks. We are aware of concerns around disease risks associated with the fur trade, and we will continue to gather evidence on that issue.
It is vital that any future policies are developed on the basis of robust evidence. We will continue to build the evidence base on fur, which will inform potential future action on the fur trade. Far from evidence-gathering being abandoned, I can confirm today that this process includes commissioning a report from our experts on the Animal Welfare Committee, who have done tremendous work for a number of years now. They will consider the issue of responsible sourcing in the fur industry, including the animal welfare standards and safeguards that apply to fur imported into this country. Given what we have heard today from Members, in particular the accounts by my hon. Friend the Member for Clacton of the ways in which animals are kept and treated, I pay tribute to members of the Animal Welfare Committee, because gathering such evidence will most surely be a harrowing ordeal, albeit an absolutely necessary one to provide us with the evidence we need to take action in the interests of animal welfare.
Animal welfare is an absolute priority for this Government. Our track record thus far speaks for itself. We recognise the valuable contribution that animals of all kinds can make to our lives and our planet, and it was lovely to hear the accounts of two Members about their pets. I think that all of us have had incredibly positive interactions with animals, including pets, and it is certainly part of my role to ensure that people are more connected to nature through the work of our environmental improvement plan and our commitment that everyone should live within 15 minutes of a blue or green space, all of which contribute to people’s enjoyment of nature and animals in their own environment.
That is the way that we should enjoy animals—not by having a piece of fur attached to a jacket, but by being in the great outdoors and experiencing animals in their own environment. So we will continue to prioritise caring for, respecting and protecting animals in the future.
I will leave a couple of minutes, Dame Maria, to hear a final few words from my hon. Friend the Member for Clacton, who has done a sterling job, not only in raising our awareness today but in working in this area over many decades, both in this House and before he came here.
Giles Watling
I thank my hon. Friend the Minister for her very positive words. At the end of her remarks, she mentioned the animals we all know and love, and share our lives with. I have been a lifelong animal owner of one sort or another. Humphrey and Herbie are my current companions, and I say that just so that I can get them into Hansard. They have wonderful fur that is much better on them than anywhere else. I have had many dogs.
I think it is worth touching on a couple of points before the debate ends. On a positive note, it is good to remember that the UK fur trade, once prolific, is now almost dead as far as the high street is concerned. We have come an awfully long way, but there is much further to go. I think all Members agree that banning the import and sale of fur is a low-hanging fruit for the Government, and I therefore implore the Government to move on it. A survey found that 70% of British people would like to see a fur ban, and 1.1 million people signed a petition. The Government should listen. This is an easy win that will be appreciated by all sides and all constituents across all our four nations.
Question put and agreed to.
Resolved,
That this House has considered the import and sale of fur.
Asylum Applicants: Mental Health and Wellbeing
(10 months, 2 weeks ago)
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Dame Maria Miller (in the Chair)
I will call Gareth Bacon to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for a 30-minute debate.
Gareth Bacon (Orpington) (Con)
I beg to move,
That this House has considered asylum applications and asylum seekers’ mental health and wellbeing.
It is a pleasure to serve under your chairmanship, Dame Maria. I did not want to bring forward this debate. Indeed, I did everything I could to avoid tabling it, and I would like to explain why. At the outset, I would like to talk about the challenging immigration situation faced by this country. Britain is one of the most tolerant and welcoming communities in the world. A recent King’s College study found, among other things, that only 5% of the population would not want immigrants as neighbours. Similarly, it was reported that, by last year, 75% of ethnic minority people living in Britain either felt very strongly or strongly British. Those are very positive statistics.
But we must also recognise the need to strike a balance between welcoming people and having reasonable immigration policies. Uncontrolled immigration and unchecked illegal immigration can have very serious consequences. That is why I believe the Home Secretary is right to be working to stop people putting their lives at risk by crossing the English channel in small boats to come to this country illegally. We must ensure that those coming to this country seeking asylum do so through legal routes.
It is right that we respond appropriately to the plight of asylum seekers escaping violent, authoritarian and dictatorial regimes that systematically persecute and even execute their own people. It is our duty to take in genuine asylum seekers, just as it is our duty to remove economic migrants who have entered our country illegally. It is our duty to process asylum claims quickly and efficiently for the good of all concerned.
It cannot be denied that pressures in our asylum system have dramatically increased in recent years, to unprecedented levels. Indeed, the number of people waiting for longer than six months for an initial decision went up from around 18,000 in 2019 to 60,000 in the space of two years leading up to 2021. That is a serious matter that requires our urgent attention. In saying that, I make no criticism of Ministers, who I sincerely believe are battling to fix the system. I am afraid that in some instances, the lack of application and apparent disinterest on the part of some officials, exacerbated by the high-handed arrogance and disdain of some individuals who work closely with Ministers, have had terrible consequences on the lives of real people, in particular their mental health and wellbeing.
That brings me to a case I want to draw attention to, which caused me to table this debate. The case relates to an asylum claimant who until recently resided in my constituency of Orpington. In recent weeks, he has been moved to the constituency of my hon. Friend the Member for Dartford (Gareth Johnson), who has given me full permission to continue processing this case. I will refer to this man as Mr A. He is a 31-year-old Syrian refugee who arrived in the UK on 3 November 2020. He initially claimed asylum on 7 April 2021, but by March 2022 had not received any updates at all on the progress of his application. At that point, charitable Orpington constituents started to contact me to raise Mr A’s case.
I will quote from a letter I received from a neighbour of Mr A, who has been attempting to assist him. I received this letter in January this year, after I met Mr A and my constituent at my advice surgery. I believe it summarises Mr A’s situation very clearly:
“Mr A is an asylum seeker from Syria. He arrived in the United Kingdom on 3rd November 2020 on a Chilean passport as his Grandmother was from Chile. He has never visited Chile and has no relatives living in that country. Chile has mutual diplomatic relations with Syria and if he were sent to Chile they would return him to Syria.
Mr A was detained in Syria for 5 years for protesting against the government. Whilst in detention he was beaten, tortured and shot with lead pellets, the photos of which I gave to you. He still has over 150 pellets in his body.
Mr A escaped from prison after his father borrowed money and bribed one of the guards and is therefore classed as an escaped prisoner in Syria and his life would be in danger if he were to return to that country. The debt still is outstanding and also added to Mr A’s worries as he is unable to work and doesn’t know when he is going to be able to start repaying this debt.
Mr A is married and has three stepchildren. His ultimate goal is to be granted asylum in this country and bring his family here for a safe and better life. He wants to be able to work and settle in this country which he has called home for over two years.
Mr A had his final interview with the Home Office on 26th October 2021 and should have been informed of the decision shortly thereafter. It is now January 2023 and he is still awaiting a decision. This has affected Mr A’s mental health and in August 2022 he climbed 50 feet up Tower Bridge and threatened to kill himself as he was so psychologically tired.
When I met Mr A about a year ago he had no support and was really lonely and struggling to get help from anyone. I took it upon myself to arrange deliveries from the food bank, contact the mosque for support and arrange English lessons for him, his spoken English now is much improved and he is able to communicate in a basic way.
Mr A’s life whilst in Great Britain has been one of loneliness, fear of deportation and worry for his family which I find heart-breaking. I feel that we as a country have really let Mr A down and it needs to be resolved with a final positive decision of asylum as soon as possible.”
Tim Farron (Westmorland and Lonsdale) (LD)
I congratulate the hon. Gentleman on securing this debate on a hugely important issue. Obviously, there are tens of thousands of Mr As in all sorts of temporary accommodation, and they are sometimes demonised for being in hotels. Does the hon. Gentleman agree that it is not their choice to be there, that we need to establish whether people are asylum seekers or not, that we can do that only if we process cases quickly, and that the best way to ensure that people do not get into this awful situation and that their mental health is protected is to process them swiftly and fairly?
Gareth Bacon
I do agree with the hon. Gentleman, and the point of my bringing this case to the House is to highlight the fact that Home Office officials simply are not approaching the issue with anything like sufficient urgency to sort it out. I reiterate the point I made earlier: I make no criticism of Ministers in this regard, because I do not doubt for one second that every Home Office Minister is straining every sinew to make this a reality. My criticism, such as it is, is aimed squarely at the officials, who do not seem to see these people as people; they see them as problems they will get to when they have time.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing forward an issue that is important to him, and congratulate him on being so assiduous. Does he not agree that our obligations—and, I believe, our moral duty—must mean that, as well as feeding and sheltering asylum seekers, we ensure they are supported to survive in this land, which is foreign to them, and are given help to assimilate, rather than being left voiceless and frightened in a hotel room with their children, wondering for weeks what is going to happen next?
Gareth Bacon
I have a lot of sympathy with that point. It is critical that we process asylum claims much more quickly because while those claims are in abeyance, the asylum seekers are living in stasis. It might be that people who come to claim asylum are not asylum seekers, but economic migrants. That does not make them bad people, but it does mean that they are illegal immigrants, and they should be returned. What should not happen, as in the case of my constituent, is that they live in a state of limbo for years. That should not be acceptable in any way, shape or form.
I became aware of Mr A’s case on 14 March 2022, when a constituent made contact to request that I engage with the Home Office. Back then, my constituent had already noted Mr A’s deteriorating mental health. However, despite my office’s regular efforts to obtain updates, it was not until August 2022—five months later—that the Home Office responded, and only to say that Mr A would have to wait a further six months for an update.
I am sure the House can imagine the effect that that message had on Mr A. Indeed, only a few days after receiving that news, he climbed up Tower Bridge with the intention of attempting to kill himself. Fortunately, he was talked down. He was taken to hospital and later returned to the accommodation with which he had been provided in Biggin Hill. Given the elevated risk of harm displayed by Mr A, my office contacted the Home Office to alert it, in the hope that a sense of urgency would be felt by those in charge of processing the case. However, several more months went by without a resolution of any kind.
In January, therefore, I met with Mr A and another of my constituents, who had been helping him. During our meeting, Mr A presented me with evidence for his asylum claim. That included X-ray images of his body. Disturbingly, the images showed a large amount of metal shrapnel lodged in his torso and limbs as a result of being shot at by the Syrian regime. The evidence also included photographs of him after he had been beaten with an iron bar. Faced with this disturbing evidence and having no success at all in persuading Home Office officials to progress Mr A’s case, my office informed officials that if no progress had been made in two weeks—that is, by 3 February—I would seek a meeting with the Home Secretary to personally brief her on the situation, place the entire file in her hands and ask her to intervene. I hoped that that might lift the all-pervading sense of disinterest and inertia.
No such luck: on 31 January, I received an email from Home Office officials that gave no additional information and no indication as to when a decision would be made, and that claimed to have sent a response to Mr A on 16 January. Neither Mr A nor my other constituent who attended the meeting with me on 20 January—four days after the Home Office letter was allegedly sent—had mentioned that letter. On 1 February, my office called the Home Office hotline to request a copy of it. The response we received was that the Home Office was unable to locate the letter, and the officials stated that it had not been uploaded to the system. When they asked my staff member if he would like to request that they find the letter and send it to him, and he said he would indeed like them to do that, he was told that that would be treated as a new query and it would be sent to my office within 20 working days. You could not make this stuff up.
Later that day, I informed my hon. Friend the Member for West Bromwich West (Shaun Bailey), who is a Parliamentary Private Secretary to the Home Office, of my intention to seek a meeting with the Home Secretary. He chased my request diligently, and three weeks later, on the morning of 22 February, he informed me that he had made progress on securing the meeting and asked me for Mr A’s date of birth and case reference number, which I passed to him a short while later. At 6 pm, he informed me that he had secured a meeting with the Home Secretary in her office in the House, scheduled for 6.45 pm that evening.
When I turned up for the meeting, I was brusquely turned away by a Home Office special adviser called Jake Ryan, who refused to allow me in. When my hon. Friend told him that that was unacceptable, the special adviser swore in his face. The high-handed arrogance of this unelected political appointee was staggering. I gather that my hon. Friend escalated the situation to higher authorities because at last there was movement on Mr A’s case. When I finally attended a meeting with the Home Secretary on 1 March, she informed me that officials had determined Mr A’s case. He would be granted 30 months to remain in the country and his application for asylum was refused on account of him being a Chilean national. The House will recall that I had been informed that, while Mr A had a Chilean grandmother, he is not a Chilean national, has no living Chilean relatives and, indeed, has never visited Chile.
Giving Mr A limited leave to remain means that he cannot regularise his life here or bring his family. Furthermore, giving him limited leave to remain, after which he will presumably be returned to Syria or sent to Chile, which apparently has a returns arrangement with Syria, is terrible news for Mr A because it significantly increases the likelihood of him being returned to a country where there is a direct threat to his life. The fact that the special adviser refused to allow me to see the Home Secretary on 1 March is extraordinarily frustrating, because had he not done so, I would have been able to alert her to those facts and it is possible that a different outcome to Mr A’s case would have been achieved.
In the meeting on 1 March, I asked the Home Secretary for the case to be looked at again by officials, and she assured me that it would be. Two weeks later, on 15 March, I received formal notification from the Home Office of the decision it had taken. The relevant sections of the letter read:
“On 3rd November 2020, Mr A submitted a claim for asylum; I apologise for the delay in progressing this case and any distress this may have caused.”
For the avoidance of doubt, that letter was written in March 2023. The delay referred to amounted to two years and four months. The letter continued:
“Mr A had a series of significant safeguarding issues (suicide attempts); We take the mental health and wellbeing of asylum seekers very seriously. We discussed Mr A’s case with officials and there were a number of delays due to the sensitivities and complexities of the case.”
The claim that Home Office officials take these issues seriously is one that I treat with a great deal of scepticism, certainly in the context of this particular case. Again, for the avoidance of doubt, it was the disinterest and protracted institutional inertia of Home Office officials that caused the safeguarding issues that they referred to.
The letter then stated:
“Mr A’s application was fully considered and the asylum and Humanitarian Protection aspect of the claim has been refused as Mr A does not have any individual protection needs in Chile.
However, we will be granting Mr A a period of leave of 30 months on the basis of his private life as, given his vulnerabilities, there would be insurmountable obstacles to him establishing himself in Chile.”
So on the one hand the Home Office accepts that Mr A would be unable to establish himself in Chile, but on the other it is refusing him asylum here, thereby condemning him to suffer another two and a half years of the purgatory.
Gareth Johnson (Dartford) (Con)
I pay tribute to my hon. Friend for the enormous amount of hard work and dedication that he has put in for what is now my constituent; it is absolutely right that he continues to deal with this case.
I am deeply concerned about the information that my hon. Friend has set out to the House. We have an excellent Minister here; I hope that she is listening carefully to what he is informing the House about, that she will go back to the Department later today, and that firm and immediate action will be taken on this matter for my constituent.
Gareth Bacon
I agree with my hon. Friend.
For Mr A, two and a half more years of loneliness, worry and fears for his family, as well as fear of deportation back to a country where his life is under threat, has inevitably had further detrimental impacts on his mental health. On 13 April this year, I received a further email from the constituent who attended the advice surgery with Mr A in January. She wrote:
“All of the above matters are causing Mr A great frustration and his mental health has seriously deteriorated. We have an appointment with the mental health team at the hospital in May but I personally am extremely concerned that he may harm himself if these matters are not resolved soon. Anything that you can do would be greatly appreciated. I personally cannot understand why our immigration system seems to be so complicated.”
Since I met the Home Secretary on 1 March, my office has been chasing Home Office officials, and my hon. Friend the Member for West Bromwich West has been asking for updates on my behalf, but absolutely nothing has been forthcoming. We seem to be back in the cycle of disinterest and total inertia. In the meantime, Mr A continues to spiral downwards.
Dame Maria, I realise that I have talked at length about a single case, but that is precisely to highlight the wider implications of the approach of officials to processing asylum applications—an approach that is simply not delivering acceptable outcomes. The consequence is deeply damaging to people such as Mr A. I realise that Ministers cannot fix the system overnight, and I have absolutely no doubt that they are straining every sinew to improve the situation. However, they can make a significant difference in cases such as this. Small steps can lead to long strides.
I know my hon. Friend the Minister to be a woman of high integrity and compassion, so I thank her for listening to me and call on her to do the right thing in cases such as this one. Please take them back to the Home Office and fix them.
The Parliamentary Under-Secretary of State for the Home Department (Miss Sarah Dines)
It is a pleasure to serve under your chairmanship, Dame Maria. I am grateful to my hon. Friend the Member for Orpington (Gareth Bacon) for raising this important case. I also thank my hon. Friend the Member for Dartford (Gareth Johnson), who is supporting him in this endeavour and is now also involved in the case.
As would be expected, the Home Office is aware of Mr A’s case, and I will ensure that my hon. Friend the Member for Orpington continues to receive regular updates. I am not able to comment on the details of this case, because of convention; I am sure that the House will understand that. However, I can of course ensure a suitable meeting with the Minister for Immigration, in whose place I stand today; I am pleased to respond in his absence.
We are committed to ensuring that asylum claims are considered without unnecessary delay, and that those who need protection are granted it as soon as possible, so that they can start to integrate and to rebuild their life. Of course, that includes those involved in cases that are granted on appeal. Asylum casework teams are dealing with high levels of new applications, including those from small boat arrivals, and we have been clear about the pressures that the situation in the channel has created. It is a significant and complex challenge, but we are doing everything in our power to balance the overall needs of the system and to ensure that cases are appropriately prioritised.
Colleagues will recall that in December, the Prime Minister pledged to clear the backlog of initial asylum legacy claims, which are claims made before 28 June 2022. We are taking immediate action to speed up asylum processing, while maintaining the integrity of the system. For example, we are simplifying the guidance, reducing interview length and streamlining processes. Streamlining the process will play an important role in our achieving our aims. The streamlined asylum policy guidance was published on 23 February; on the same day, questionnaires began to be sent to legacy claimants from Afghanistan, Eritrea, Libya, Syria and Yemen at their most recently recorded correspondence address. Those countries were included in the streamlined asylum process on the basis of their high grant rate, which is 95% or higher, and the fact that over 100 grants in the year ending September 2022 were grants of protection status—refugee status or humanitarian protection.
We are making good progress. According to provisional data, between the end of November 2022 and the end of May 2023, the legacy backlog was reduced by 17,000 cases. During April, streamlined asylum processing was further rolled out to legacy claims from nationals of Afghanistan, Eritrea, Sudan, Syria and Vietnam. That means that where a positive decision can be taken, the claimant will have not a substantive interview, but a preliminary interview meeting.
Tim Farron
The Minister mentioned people with legacy claims from Libya and Eritrea. Under the Government’s new proposals, there is no safe route for those people to get here at all, even though, as she said, over 90% of claimants turn out to have a claim. Would she think again about ensuring that we do not dismiss people as bogus asylum seekers before we have even considered their claims?
Miss Dines
I beg to disagree with the hon. Gentleman. Of course there are safe routes. By international agreement, we take people from Syria, and we do fulfil our international obligations. [Interruption.] May I continue? Streamlined asylum processing for accompanied and unaccompanied asylum-seeking children will enable cases to be progressed more quickly, and enable us to clear the backlog of outstanding initial asylum decisions.
We are also working hard to significantly increase the number of asylum decision makers above intake levels, so that we can reduce the time taken to reach decisions and the number of claimants awaiting decision. My hon. Friend the Member for Orpington who called for this debate, and I am grateful to him for doing so, was quite right to raise this issue: speed is of the essence, and we need to reduce the time taken to reach decision significantly. That is why finance and effort is being put into increasing the numbers of those who determine claims.
We have recruitment strategies in place that will help to increase staffing, and to maintain it at the level required for better management of the asylum intake. As was mentioned, the sheer weight of numbers is significant; we will need to improve management of the system if we are to make the changes that my hon. Friend is desperate to see, not only for his constituent but for others in similar positions. We have already doubled the number of decision makers over the last two years, and we are continuing to increase them further. A large recruitment campaign is under way; it will take the expected headcount of decision makers to 2,500 by September this year, which will make a significant difference.
Asylum Operations continues to mitigate the effects of the high attrition rates. That can hinder productivity, as experienced decision makers are used to upskill new colleagues. Although we are increasing the number of decision makers and expect the number of decisions to increase, it can take up to 12 months for a decision maker to become fully proficient in their work. We are putting a place a range of interventions—for example, we are looking at job design, reward and management capability—to reduce churn and increase the rate of productivity.
We take the welfare of those in our care extremely seriously. At every stage in the process, our approach is to ensure that the needs and vulnerabilities of asylum seekers are identified and shared with health partners. To facilitate that, the Home Office and its contractors work closely with the NHS, local authorities and non-governmental organisations to ensure that people can access the healthcare and support that they need. Asylum seekers have access to health and social services from the point of their arrival in the UK. All asylum seekers, regardless of the type of accommodation that they are in, have the same access to free NHS services as British citizens and other permanent residents. The Home Office operates a safeguarding hub to support vulnerable individuals in quickly accessing the healthcare services.
I am particularly interested in the points that my hon. Friend the Member for Orpington raised about the delays he has experienced, which are in no small part due to the dramatic rise in cases. We have the highest number of applications for two decades; that is why he is quite right to support the Government on reforming the system. I remind hon. Members that there were 75,492 asylum applications, relating in total to 91,047 people, in the UK in the year ending March 2023. That is a third more applications than in the year ending March 2022, and the highest number for 20 years or so. It is also higher than at the peak of the European migration crisis; the figure was 36,446 in the year ending June 2016.
Many of the top nationalities applying for asylum in the UK in the year ending March 2023 are also the most common nationalities of those arriving in small boats. Those nationalities include Albanians, Afghans, Iranians, Iraqis and Syrians. The significant increase in dangerous journeys across the channel is placing unprecedented strain on our asylum system. Those in need of protection should claim asylum in the first safe country they reach, rather than risking their life and paying people smugglers to take them on the dangerous journey across the channel.
As my hon. Friend mentioned, the UK has a proud history of supporting refugees. Since 2015, we have offered a place to just under half a million men, women and children seeking safety, including those from Hong Kong, Syria, Afghanistan and Ukraine, as well as family members of refugees. Our focus will remain on directly helping people who are from regions of conflict or instability. The best way to help the most vulnerable people, which of course includes Syrians, is to bring them into the country through safe and legal routes. That will bypass the evil criminal gangs and protect vulnerable people, including children.
The Government are committed to reform. The Illegal Migration Bill is essential to ensure that we can better marshal appropriate applications, and to ensure that people who should not be seeking asylum do not jump the queue by paying money to an illegal smuggler.
Let me turn to the issue of wellbeing. My hon. Friend mentioned that his constituent, who was based in Orpington and is now based in the Dartford area, is suffering from ill health and mental illness, in part as a result, it is said, of his treatment abroad, but also of his living and waiting here. The Government take the safety and wellbeing of asylum seekers extremely seriously. We are working closely with health partners, accommodation providers in the UK and the UK Health Security Agency to ensure their safety and wellbeing. Asylum seekers have access to health and social care services, and those who deal with asylum seekers at any point of the process, including first responders, are under a duty to assist in ensuring that safety and wellbeing.
Significant effort goes into ensuring that people have the appropriate health and wellbeing services. We provide funding, via a therapeutic support grant, to Barnardo’s, so that it can operate its Boloh helpline. That service provides mental health and wellbeing support to adult asylum seekers; it aims to prevent the escalation of any mental ill-health among those navigating the asylum system, and to facilitate joined-up working in the community, on mental health provision in general. My hon. Friend mentioned that he has concerns on this issue in relation to his case, and I am sure that he will continue to raise it. The service offers UK-wide virtual therapeutic support, practical support from helpline advisers and intensive one-to-one treatment where needed. There is extensive work with a team of psychotherapists who speak 15 languages, and extra help will be brought in where it is needed.
In closing, I again thank my hon. Friend the Member for Orpington for securing the debate. He works extremely hard on this issue and will continue to do so, and I am sure that he will hold the Home Office to account. I reassure him—as much as I can; I am standing in for the Immigration Minister—that I will seek to secure a meeting for him with that Minister, so that he can assist him in representing an important former constituent. This is an important topic that we take seriously, and the Government are committed to ensuring that all asylum claims are considered without unnecessary delay. Where there has been historical delay, we are doing our best to reduce it. We are mindful of our responsibilities to those in our care, and are ensuring that their needs are met. That will remain an integral part of our approach.
Question put and agreed to.
Energy Company Obligation Schemes
(10 months, 2 weeks ago)
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Ben Lake (Ceredigion) (PC)
I beg to move,
That this House has considered the implementation of ECO4 and ECO+.
It is a pleasure to serve under your chairmanship. Mr Paisley. I am grateful for the opportunity to discuss the importance of energy efficiency schemes for domestic properties in general, and more specifically the implementation of the energy company obligation 4 and energy company obligation plus schemes.
As everybody will be aware, households have had to endure wave after wave of challenges to budgets in recent months, with each adding to the financial burden on families and eroding living standards. Although we have recently received welcome news that falling wholesale energy prices will begin to feed through to households, it is unlikely that energy bills will return to pre-crisis levels any time soon.
A frequently cited statistic that bears repeating, lest we allow current prices to be normalised, is that in April 2022 the Welsh Government estimated that energy bills of £1,971 would push 45% of Welsh households into fuel poverty. Next month, when Ofgem’s price cap kicks back in, it will still be marginally higher, at £2,074. The New Economics Foundation suggests that that pressure will continue into next year, with energy bills in April 2024 estimated to be as high as 70% above pre-crisis of 2021 levels. To put it simply, for too many households energy prices will continue to be a significant pressure on their budgets for some time to come. Households will also be more vulnerable this coming winter, after being forced to use savings or take out debt to make it through last winter.
Citizen Advice Cymru has seen an increase in the number of people seeking debt advice, and reports that more people are falling into arrears on essential household bills. The number of people seeking advice on debt relating to energy bills, for example, has more than doubled between May 2021 and May of this year. Although that is not the purpose of today’s debate, it demonstrates why short-term relief with energy bills is still required, including another round of the alternative fuel payment for off-grid households next winter.
In the long term, the energy crisis has thrown into very sharp relief the urgent need to implement measures to bring down energy bills permanently for households and businesses. One solution is to transition to renewable energy sources, another—the focus of today’s debate—is to introduce comprehensive policies to enhance the energy efficiency of the UK’s housing stock.
That issue is particularly acute in Wales, given that we have some of the oldest and least efficient housing stock in western Europe. Data from the Department for Levelling Up, Housing and Communities shows the percentage of dwellings within each local authority with energy performance certificates rated level C or above. The data shows that five out of the 15 local authorities with the smallest percentage of dwellings with EPCs rated level C or above are in Wales, with Gwynedd third from bottom at 23% and my constituency of Ceredigion only slightly better at 25%.
It is perhaps not surprising that Ceredigion does so badly, when we consider that 35% of our homes were constructed in the 19th century. It is sobering to reflect on the fact that the vast majority of the county’s 2050 housing stock has already been built, more than a third of it in the Victorian age. The case for action is, therefore, quite clear and simple. We need to upgrade the energy efficiency of our housing to reduce people’s exposure to increased energy costs. Almost a quarter of tenants in the private rented sector live in fuel poverty, with those living in the least efficient homes spending as much as £950 more per year on their energy bills, compared with homes rated EPC level C.
The UK Government have made the case that it is unsustainable to maintain support indefinitely for households with energy bills. By retrofitting, we can mitigate the need for ongoing and future support packages. Indeed, the New Economics Foundation estimated that had all homes in England and Wales been upgraded to EPC level C by October last year, the energy price guarantee would have cost £3.5 billion less over its first six months and households would have saved an average of £530 over the year.
Of course, retrofitting would also have significant beneficial outcomes for health. We know that living in a cold home can worsen asthma and other respiratory illnesses, and increases the risk of heart disease and cardiac events. It can also worsen musculoskeletal conditions such as arthritis, as well as having a detrimental impact on mental health. Wales’s Future Generations Commissioner estimated that a comprehensive home retrofitting programme could save the Welsh NHS as much as £4.4 billion by 2040 by tackling some of those health issues.
Finally, reducing household energy demand is of course vital for us to improve energy security, reduce our reliance on fossil fuels and, of course, realise our climate targets. A coalition of charities, including Fuel Poverty Action and Green Alliance, have warned that without action on housing and buildings, there is no plausible path to achieving the fifth carbon budget or meeting the 2030 statutory fuel poverty target.
It is clear that home retrofitting is vital and that action taken now will place the UK in a good position in the future. The UK Government’s flagship fuel poverty reduction scheme, the energy company obligation or ECO, has a key role to play in upgrading our homes to permanently reduce the cost of heating for households and to address fuel poverty. ECO has operated since 2013 in several iterations and up to March of this year it had delivered a total of 3.6 million energy efficiency measures in Great Britain. The energy performance improvements that have been delivered have saved low-income customers as much as £17.5 billion in lifetime energy bills and saved the average home some £290.
ECO4 is, of course, the fourth iteration of the scheme. It began in April last year and is planned to run until March 2026. In the past year, however, installations have dropped quite significantly. All versions of ECO have experienced difficulties in some form or other, but ECO4 has undoubtedly been delivering at a slower rate than previous iterations. Energy suppliers and installers are now warning that structural issues are preventing the scheme from fulfilling its potential and I want to dwell on those issues today.
Between April last year, when ECO4 commenced, and March this year, approximately 45,000 households had received support under the scheme. Given that that is around 10% of the 450,000 households that the scheme is supposed to support over its four-year lifetime, there is concern about the pace of the roll-out so far. One reason might be that the number of measures installed per property during the roll-out of ECO4 to date has been much higher than expected, with an average of nearly 3.5 measures per property since April 2022 compared with the average of 1.8 measures expected in the scheme’s final impact assessment. In the first quarter of 2023, the figure increased to an average of 4.93 measures per household.
E.ON Energy estimates that, as result, industry could achieve its overall national bill saving target by delivering ECO4 to only 215,000 properties of the 450,000 targeted. Of course, it is not a bad thing that energy efficiency is being significantly improved for those households supported by ECO4, but it raises a question about the adequacy of the funding in place if ECO4 is to achieve its target of supporting 450,000 households, as I am sure that Members will agree.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I agree entirely with my hon. Friend, as I am sure that many would, that this is primarily a question of funding. We should take a step back and realise that Shell has directed £5 billion in windfall profits towards its shareholders in the first quarter of this year, so there is surely a good case to be made for an emergency windfall tax to enable additional work for the other households that would benefit so much from it.
Ben Lake
I am very grateful to my right hon. Friend for that important intervention and you will be unsurprised, Mr Paisley, to hear that I agree with her that there is an important opportunity to introduce emergency measures. At the end of the day, energy companies are making eye-watering amounts of profit at a time when households across the country are struggling. I think it is very appropriate for us to consider ways of recouping some of that potential income to put against this important measure.
Adjustments are required to get the scheme back on track so it can achieve its full potential. The first adjustment requires the UK Government to look again at ECO4’s cost assumptions. They were finalised in April 2022 and do not reflect current market conditions, including the escalation in costs caused by labour shortages and manufacturing prices. More recent cost assumptions, such as those included in the Great British insulation scheme’s impact assessment, reflect those price increases.
For example, the fixed assumed costs of installing external solid wall insulation, which comprises 12% of measures installed under ECO4 to date, increased from £4,200 in 2021 to about £5,000 in 2022—by almost 20%. Meanwhile, the UK Government estimate that the cost of installing cavity wall insulation for bungalows, as well as detached, semi-detached and end-of-terrace houses, has increased by 50% to 63%. That is all without factoring in the inflationary pressures we have seen in 2023 so far. At the start of 2023, insulation and associated material prices increased significantly, many by close to 10% and some by as much as 35%, compounding similar increases seen last year.
Another aspect of the scheme that requires attention is the minimum requirements threshold, which means that a household’s energy performance certificate must be improved to a particular level. For example, if band D and E homes are to be eligible for the scheme, they have to be upgraded to at least band C, and band F and G homes must be upgraded to at least band D. We should welcome the intent of that requirement. Providing support to the poorest households in the least efficient homes by bringing them up to a significantly higher energy performance rating is an important objective. Nevertheless, the requirement is proving to be a limiting factor on the scheme’s delivery. I have spoken to installers and energy suppliers who say that the minimum requirements are too inflexible compared with previous schemes.
It is suggested that the requirements are making it difficult to find eligible properties, and installers are reporting difficulties in proving how properties in higher EPC bands, such as those in band D, as well as on-gas properties, can meet the requirements. E.ON Energy estimates that around 90% of qualifying fuel-poor households cannot have works delivered to their properties, as either they fail to meet the minimum requirements threshold or it would be economically unviable to upgrade them to the levels required to meet it.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
The hon. Gentleman is giving one of the best speeches I have heard in Westminster Hall in a long time, and he has some good evidence to back up his comments. I congratulate him on securing the debate. My constituency, like his, has a high number of rural homes. Many are reliant on oil-fired central heating and also struggle to fit into the qualifying criteria for the type of scheme that he has outlined. What advice does he have for the Government on how we can improve the flexibility of the schemes to ensure that oil-fired homes can qualify?
Ben Lake
The reality is that a very high proportion, if not the majority, of homes in rural constituencies find it difficult to access the scheme because they are not on the mains gas network. In my constituency, some 72% of properties are not connected to mains gas and they are struggling uphill to get on to the scheme. The Government would do well to look again at whether we can change the ECO Flex pathways to allow local authorities greater flexibility to support off-grid properties in particular. That might be a way forward. We certainly need to address the issue. If we do not, I worry that rural areas, which often have an older, less efficient housing stock, will be left behind. I am grateful to the hon. Gentleman for making that important point.
As greater investment is required per property to meet the minimum improvement threshold requirements, the current iteration of the scheme appears to be more exposed, and therefore more vulnerable, to the inflationary pressures that I mentioned earlier, so we need to look again at how it is funded. I ask the UK Government to look at that very carefully.
Another aspect of ECO4 that is welcome in principle, but which is putting pressure on those delivering the scheme, is the Flex pathway. The pathway is important, because it enables local councils to identify low-income households that are in need of support, but that are unlikely to be eligible under the scheme’s standard approach. It also provides an opportunity for local councils to better tailor energy efficiency schemes to their respective areas, and I refer back to the remark from the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) about rural properties. The issue, however, is that local councils feel that the Flex pathway is too onerous and that the information required of them for each application takes up significant staff time and resources. Indeed, I am told that the level of detail required can make the Flex pathway inflexible when considering different local factors.
One of those factors is the nature of the housing stock in an area, and I have already mentioned that Wales has some of the oldest and least efficient housing stock in western Europe. I spoke to representatives of Gwynedd Council, who expressed concerns that the products available via ECO do not always work well with the design of older houses.
Liz Saville Roberts
On that point, I would like to mention Meilyr Tomos at Gwynedd Council, who supplied me and others with advice on this debate. In relation to the ECO Flex programme, another issue in Gwynedd is second homes. Younger people are now priced out of staying in their own homes, and more non-dependant children are remaining with their parents—between 2011 and the 2021 census, in Gwynedd the figure increased by 6.8%. Given that non-dependant children artificially inflate household incomes, that has a knock-on effect on ECO Flex. The Government would be wise to give due attention to such rural issues.
Ben Lake
I agree with my right hon. Friend. The Flex pathway offers a real opportunity to allow the policy to be tailored to the specific needs of local areas, so as to accelerate the delivery without impacting on the broader scheme that the Government have implemented.
The consequence of rising costs and a perceived inflexibility in the structure of the scheme has been that supply chains are starting to stutter, and I am told that many installers are leaving the market. The Installation Assurance Authority warns that there are now fewer than 10,000 people involved in the industry and public-funded schemes, whereas there were 54,000 in 2012. Those who have moved away from ECO4 are reluctant to return. If installers continue to leave the market at this rate, it will make it very difficult not just to deliver ECO4, but to achieve the level of home retrofitting required to meet our future climate and fuel poverty targets.
If those issues are not addressed, thousands of eligible households will miss out on crucial energy-saving measures, meaning that they will face higher energy bills this winter and beyond. I believe that the Department for Energy Security and Net Zero is consulting on the deliverability of elements of ECO4. If it intends to do so, I ask that they publish the consultation before the summer recess in order to allow sufficient time ahead of April 2024 for industry to adjust accordingly. A failure to do so may mean that even more installers drop out of delivering the scheme due to continued uncertainty.
It is not too late to get ECO4 back on track, and I would argue that a consultation could play a key part in doing so, but I would appreciate it if the Minister could explain what consideration has been or will be given in a consultation to the following points. Could ECO4’s cost assumptions be revised in line with current supply costs to reflect current market conditions? Could the eligibility of homes be widened to ensure that more people can benefit from the scheme? That could include increasing the number of fuel-poor households eligible in the private and social rental sector, or it could mean enabling the Flex channel to be more responsive to local needs in order to be able to capture more fuel-poor households, such as those in receipt of means-tested benefits or with health conditions.
Another suggestion is that we investigate the possibility of extending the buy-out mechanism, so that others besides energy suppliers can take on obligations, and enable local councils to deliver ECO. Other suggestions are: making long-term funding available for training, so that we can boost the supply chain, and considering measures to boost recruitment and careers in the retrofitting energy efficiency industry; ensuring continuous and open engagement with installers, energy suppliers and other industry and fuel poverty experts, to guarantee that the scheme remains on the right track and to ensure that the UK Government can respond effectively to any future issues that arise; and finally, exploring the possibility of expanding the range of technologies that will be considered in scope in future iterations of ECO4 to, for example, water control technologies, which can help bring down the cost of energy used to heat water.
I will briefly touch on ECO+ or, as it is now known, the Great British insulation scheme. I of course welcome the scheme, which is designed to support households in installing single energy efficiency measures in their homes, but again possible adjustments could vastly improve delivery. Can the Minister say what consideration has been given to refining the scheme’s targeting, so that it better helps fuel-poor households? For the majority of the scheme, households are expected to make a financial contribution to the cost of the measures. That will effectively make a large proportion of the scheme inaccessible to the lowest-income households, which cannot afford to make those contributions. In a cost of living crisis, when disposable income is diminishing across the UK, surely the requirement for contributions should be taken out of the scheme, or the percentage of participants who are expected to make contributions should to be lowered.
It would be remiss of me not to mention that I have heard from constituents who were unfortunately let down by contractors delivering measures under the ECO4 scheme. Of course, any measures installed are now covered by the UK Government-endorsed quality scheme, TrustMark. I appreciate that incidents of poor delivery may be isolated examples, but in those worst-case scenarios where delivery goes horribly wrong, the protection and security for households is still inadequate.
Liz Saville Roberts
I would be grateful if the Minister addressed the issue of providers who place solar panels on agricultural land, but do not guarantee against damage caused by animals. Obviously, placing panels on agricultural land is very convenient, and it makes access cheaper, although attention is not always paid to planning requirements. However, the convenience may be outweighed by the risk for the householder of damage caused by animals that is not covered by a guarantee. I very much wish the Government to address that rural issue.
Ben Lake
I thank my right hon. Friend for raising another important point. It perhaps illustrates the need to strengthen the accountability of the scheme. In Ceredigion, households have had measures installed that were of substandard quality, and they find it almost impossible to get information about redress and holding the installers to account for the sub-par work. Her concerns would be captured by a broader effort to improve the scrutiny and accountability of the scheme. Will the UK Government consider ways of improving oversight of installations? We need a stronger mechanism by which installers can be held to account.
Before closing, I will touch on the need to incentivise those who are ineligible for the ECO scheme to invest in retrofitting—those who might have the means to do so. A few measures come to mind. First, could we look again at removing VAT from insulation products, and not just from the installation of these products, as well as from storage batteries? I appreciate that that might be a Treasury matter. What work might the Government undertake on providing interest-free loans to those who wish to install energy efficiency and low-carbon heating measures? Providing access to such support will be even more important in the face of steep interest rate hikes.
Finally, I come to another area that deserves a brief mention in a discussion on how we can help households to bring down energy bills and expand our renewable capacity: incentivising households to invest in smaller-scale renewables. I have been contacted by several constituents who are concerned that the reduction in support from the feed-in tariffs—and now their replacement, the smart export guarantee—has vastly reduced the incentive to invest. I urge the Government to consider increasing the tariffs that the energy suppliers are required to offer to homeowners who generate renewable energy. I draw my remarks to a close, and very much look forward to the comments of my colleagues.
Several hon. Members rose—
Ian Paisley (in the Chair)
I thank hon. Members for bobbing. If anyone else wishes to bob, feel free. I intend to call the Front Benchers at approximately half-past the hour.
Wera Hobhouse (Bath) (LD)
It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on bringing this important debate to this place.
We are in the middle of a cost of living crisis. Bills are soaring, wages are not keeping pace with inflation, and people are struggling to make ends meet. We must not forget how harsh last winter was. The energy price cap rose by 54% and many people were trapped in cold, leaky homes. We cannot allow that to happen again.
Households in poorly insulated homes will pay an estimated £13 billion a year more in energy bills. That is because the Government have failed to bring those homes up to at least band C of the energy performance certificate rating. Some 43,000 homes in Bath have a poor efficiency rating, and the Government’s inaction has meant that some of my constituents are more than £1,300 poorer each year.
We are also in the middle of a climate emergency. The UK has some of the leakiest homes in Europe. Insulating our homes would push down energy demand and cut our country’s greenhouse gas emissions. For the past decade, the energy company obligation schemes have delivered warmer homes, cheaper bills and greener buildings for millions of vulnerable households. The ECO4 scheme is the latest iteration. It provides grants to fund energy-efficient upgrades to homes, and pays for loft or cavity wall insulation, new heating systems such as boilers, and other measures designed to increase energy efficiency, as we have already heard.
However, ECO4 installations are not keeping up with the target to improve 450,000 homes by March 2026. The Energy Efficiency Infrastructure Group has shown that, by March 2023, only 15,000 homes had been treated. That is just 3% of the overall delivery target. That is very poor, and an example of the Government’s inaction on delivering what has been promised.
The cost assumptions made in the ECO4 assessment are outdated and unrealistic. The modelling used to set ECO4 targets was based on estimated costs in 2021 prices, with an allowance for general inflation over time. Since that assessment was made, inflation has soared. December 2022 saw inflation having risen by 9.2% in the previous 12 months. That is more than three times what Ofgem projected it to be.
The costs of delivery far exceed what Ofgem has accounted for. Loft insulation is, on average, 430% more expensive, cavity wall insulation is 372% more expensive, and external wall insulation is 147% more expensive. The Government should ensure that those costs are taken into account and must match the cost of measures in ECO4 with inflation. That is the main point that I wanted to make; the 2021 estimates do not take into account the soaring inflation that we have seen over the past year.
The ECO4 criteria restrict the number of homes that can be improved. The eligibility requirements set out that the homes must be improved by at least two EPC bands, which makes it hard to find suitable homes. Energy Efficiency Infrastructure Group members estimate that 90% of qualifying homes miss out because they are unable to meet the minimum requirements of the scheme. To illustrate my point, E.ON attempted to deliver energy-efficiency measures to a three-bed mid-terrace property in Dagenham. The owners of the property qualified for ECO4 as their home was rated EPC band E and they were living in fuel poverty. The package of measures that E.ON proposed would have saved the family about £600 a year on their energy bill, but the installation was rejected because the measures would not improve the house enough to make it jump two EPC bands.
When it comes to tackling the climate and cost of living crises, every little helps, so why is the ECO4 scheme making perfection the enemy of the good? The Government should relax the minimum requirements when all reasonable measures have been installed in an eligible household. That would ensure that vulnerable households could still receive much-needed support. To tackle the cost of living and climate crises, we must improve the energy efficiency of our homes. We must do all that we can to ensure that the ECO scheme benefits as many people as possible, as soon as possible.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Lady is making some excellent points. I am sure that in her constituency, as in mine, there are many older properties that are very difficult to convert. Does she agree that more needs to be done to ensure that those households can access the scheme, because it is harder for them to convert their house?
Wera Hobhouse
Absolutely; I could not agree more. In Bath, we have a lot of old, leaky homes. They are very beautiful, but they are not particularly energy efficient. People really want to do something, but ECO4 does not work for a very large number of households. If we really want to help vulnerable people and tackle the climate emergency, we must look at how the scheme has been designed and make some improvements to it. The two-jump requirement is particularly difficult in old properties.
The Government must take urgent action and improve ECO4, in order to protect the most vulnerable from cold winters and tackle the climate emergency as soon and as effectively as possible.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate and serve under your chairmanship, Mr Paisley; I have done so in the past, and hopefully I will do so again in the future. I congratulate the hon. Member for Ceredigion (Ben Lake) on his passion for this issue. His dulcet Welsh tones seem to flow, unlike my Ulster Scots accent, which does not come anywhere near his. Like him, I have a number of park homes in my constituency that have lacked support during this great energy crisis. He has spoken about this issue in the Chamber, including in an Adjournment debate; he has been very much at the forefront of raising it, and I thank him for that.
I read with interest that Ofgem stated at the end of March that the Great British insulation scheme, which was previously referred to and consulted on by the Department for Energy Security and Net Zero under the name ECO+, will allow early delivery from 30 March 2023, and will run until 31 March 2026. On 5 April, Ofgem published a consultation, through which it sought stakeholder views on its proposed administration of the policies set out by the Department for Energy Security and Net Zero and included in the Electricity and Gas (Energy Company Obligation) Order 2023. The consultation covered areas where Ofgem exercised its discretion in administering the new legislative provisions for ECO4, and proposed further improvements to current policies.
That is where we are. That is why the hon. Gentleman raised this issue, and why it is important that we understand it better. We look to the Minister for a positive response, and I look forward to the contributions from the two shadow spokespeople. The hon. Member for Bristol East (Kerry McCarthy) has a deep understanding of these issues and brings her knowledge and interest to the debate.
We have seen the havoc wreaked by protesters, who have destroyed pieces of art, and caused disruption on motorways, to the extent that ambulances have been stuck, and people have missed operations and work. The discussion about insulation and necessary improvements has been lost in the wanton disruption caused by people who have a sound message—that is not in doubt—but whose methods do not encourage debate. Instead, they encourage righteous indignation and, in some cases, anger. That is why I am grateful to the hon. Member for Ceredigion for bringing the discussion back to where it needs to be—in this House, in Westminster Hall. Here, we can do our jobs and advocate for the change that the protesters want, but in the right way. I commend the hon. Member for that.
I read the hon. Member’s piece in Politico last year. His words are worth repeating, so I will quote them. I am not trying to embarrass him, but his words were very salient:
“We know that households in the least efficient properties have energy bills that are twice the cost of the most efficient homes. There is a statutory target to upgrade the energy efficiency of all fuel-poor households to EPC C by 2030 and all households to EPC C by 2035. Government needs to ensure that it follows through with its existing commitments. Ensuring the ECO 4 legislation is prioritised in Parliament to maintain installation rates, making swift decisions on minimum energy efficiency standards in the rented sectors and meeting its manifesto commitment to spend £2.5 billion on the Home Upgrade Grant this Parliament.”
Those words are even more relevant today, and I commend him for that. Each of us fully supports him. It also shows that we read the magazine—some people wonder whether we do. I look through it to see whether I know any of the authors, and I always catch up on it.
I support the hon. Member’s efforts to hold the Government to account on this issue, to the betterment of all. I always like to give an example from back home. My parliamentary aide bought a property that had been lying vacant for years. It had no heating and needed a total refurb, which was reflected in the price. When she looked into insulating that property, she could not afford to do it as well as all the other work—the new flooring, new kitchen, and new bathroom, and the work on the heating, the garden, and the front. There was lots of work to do. She is a clever girl—she writes all my speeches and interventions, so people must know that she is exceptionally clever and busy. She knows that in the long run the insulation will save money, but given the demands on the joint wages of her and her husband, and given that she is raising two children, with only child benefit to help, I understand why she made that choice. It would have been better to do the insulation, but people’s money does not stretch that far. That is why this debate is so important. The scheme gives a wee bit of a helping hand, and nudges and assists people.
We need to help more people like my parliamentary aide to do the right thing—people who get little or no help from the system as a rule, and who work extremely hard. We are talking about people who are environmentally conscious; she washes out her yoghurt pots at 11 pm at night after writing a speech for me. People want to do the right thing by the environment. I support them. We must do the same. I look to the Government and the Minister here; they can start by fulfilling their obligations, and can move on from there.
I know that the Minister is listening. I hope that we can have a positive answer, and that she will reinforce the fact that I do not need to throw orange powder around the streets, or over the Minister or my colleagues, to make my point. Orange is a good colour, Mr Paisley—you know that—but I still would not do that. My point is that insulation makes sense. We all agree that those who highlight the issues may use different methods—in this House, we use dialogue and communication—but they are trying to make change. Let us get buy-in from the average person, who his making sacrifices, and prove that we are in it with them. I am here on behalf of my constituents. The hon. Member for Ceredigion, and everyone who has spoken and will speak, is here to do the same thing. We can do it, but we need the Minister’s help to get over the line.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing the debate and making an excellent and detailed opening speech. I also pay tribute to the other contributors, who have spoken well on a really important subject. I am indebted to Cumbria Action for Sustainability for its work in helping to bring homes up to an adequate standard to ensure energy efficiency and lower heating prices, as well as to tackle the climate emergency.
It is estimated that our homes—the ones that we live in—contribute something like 19% of the greenhouse gases emitted by the United Kingdom. In the last two years especially, there have been crushing increases in fuel poverty. Families who may have considered themselves comfortable a couple of years ago now find themselves in dire straits. Mortgage payments and rents are rising, as is the cost of living in general, but the huge increase in fuel and energy costs in the last couple of years has rendered many in a situation where they cannot see where to turn.
The need for a scheme that delivers warmer, greener and cheaper-to-run homes has never been greater, yet the number of UK energy efficiency installations peaked at 2.3 million in 2012. In the decade that followed, we got down to a miserable 100,000 a year. The Government’s much-vaunted green homes grant, which was meant to deliver energy efficiency for 1 million homes, in the end did so for only 60,000. ECO4 can and must do much better.
In Cumbria, we face specific problems that make our challenge much greater. We have a much larger proportion of solid-wall properties, of off-grid homes and of homes that are listed or in conservation areas. There are lots of positive things to say about ECO4, including, fundamentally, about its ambition of raising energy performance certificate points and its fabric-first policy—the aim to ensure that insulation happens before the installation of new and hopefully better heat sources. Those things are positive in principle, but in practice they are not entirely being followed. Households in Cumbria—especially those that can least afford it—are suffering because the detail is not being got right.
The funds provided to those installing insulation do not meet the costs, especially for single-wall properties. As we have heard, on average there has been a 77% increase in the cost of materials. Insulation is not happening because companies simply cannot afford to do it, and it is much more expensive to do the work on single-wall properties, which need it most. Insulating a single-wall property entails the further risk that moisture will build up between the wall and the insulating layer. That can lead to the build-up of mould and have a huge impact on human health and building quality in the months and years that follow.
I am told by the people who advise me on such matters that there are answers to that. Cork board or timber fibreboard can be used, as can insulating lime render, which is especially suitable for Lakeland properties in terms of its aesthetics as well as its efficacy. Frustratingly, however, none of those materials are available through the ECO4 scheme, which goes to explain why a relatively small number of people will take advantage of it.
ECO4 is a more complex scheme, as the hon. Member for Ceredigion rightly pointed out. There are many good reasons why, but one of the consequences is that the energy companies and local authorities have been reluctant to engage as providers. That means that the only people providing work through ECO4 will be independent and private providers, some of whom will be very good but some of whom will not. Private householders, almost certainly including the likes of me, are not always the best judge of which is which. That will have an impact on the quality of the work, and on whether taxpayers’ money is spent wisely. For that reason, while Cumbrian contractors have been used to deliver some of the work, Cumbria Action for Sustainability tells us that there have been no Cumbria-based companies offering ECO4 measures.
I mentioned listed properties and those in conservation areas. Residents of Westmorland living in such properties tell us that, when they explain that their home is listed or in a conservation area, suppliers almost instantly—and very politely, I hope—tell them that they are not interested, because there is no way they can make it add up and make the scheme pay.
Fuel poverty among residents of private rented properties, as has already been mentioned, is the worst of all in a community like mine. The average income in my constituency is about one twelfth of the average house price. We have a council house waiting list of 5,000 or 6,000. We have an inadequate quantity of affordable housing. The only way there is any workforce of a working age available in my constituency is because of the private rented sector, and let us say that there is a mix in its quality. Cumbria Action for Sustainability is unaware of a single private landlord in Cumbria who has pursued ECO4, as things stand.
Insulation, and the warmth and energy efficiency of any property, stands and falls on the property’s windows. Of course, ECO4 allows for funds to replace single glazing, but it will not allow funds to replace double glazing, even if it is 50 years old, past its use-by date, cracked and faulty. That appears to be a blind spot, which I hope we will act on quickly.
We have heard that ECO4 does not cover the real costs of insulation, especially in single-wall properties. That is especially so for floor insulation above garages, where there are rightly fire safety requirements, making the work more expensive. Where the scheme does not cover costs, measures are not taken, and the people who suffer are those who are left with a home that is too expensive to heat.
Cumbria Action for Sustainability and providers point out that a major reason that the green homes grant failed was the lack of skilled workers to carry out, in particular, the work needed for solid-wall housing. The situation is no better now. Retrofitting, for example, still does not feature in most relevant training schemes.
ECO4 is, in principle, better than its predecessors but, if it does not work in practice, people in Cumbria and elsewhere in our country will suffer. I will argue that ours is the most beautiful bit of the country, though it is often the coldest and the wettest, too. There are extremes of wealth and poverty, and it is hard for many of my constituents to cope with the financial costs and deprivations that go with that. More than a third of our housing stock is single-wall properties. Cumbria needs the Government to get ECO4 right. I hope they will hear the practical and constructive suggestions made by colleagues on all sides in this debate, and act accordingly.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
It is nice to see you in the Chair, Mr Paisley. I commend the hon. Member for Ceredigion (Ben Lake) for securing and leading the debate.
There are two issues that require immediate attention and decisive action: the soaring cost of living crisis and the importance of energy efficiency support. In the light of that, it is deeply concerning that, while we face those crises, the Government choose to cut taxes on bankers. Such a decision is abhorrent, especially when it is ordinary citizens who bear the brunt of an escalating cost of living crisis, much of that due to rising energy costs.
Inflation continues to hit those on the lowest incomes most severely, exacerbating their ongoing struggle to make ends meet. The Prime Minister pledged to cut inflation by half. However, it is evident that the Government are struggling to meet that pledge, and now aim to reduce public sector pay to compensate. We learned today that the leader of the Labour party, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), also refused to back public sector pay rises. That is a misguided approach, in our opinion, that will only further burden those who are already struggling.
Research by the Joseph Rowntree Foundation paints a distressing picture, revealing that 7 million households have gone without essentials, such as food, heating or basic toiletries, due to the cost of living crisis. It is our responsibility to provide support and relief to those individuals and families who are enduring such hardships. Considering all those other parts that play into the crisis, it is vital that we do not withdraw or cancel energy efficiency support for those in need.
Energy efficiency measures such as ECO4 and ECO+ play a crucial role in achieving our net zero targets and combating climate change. In 2019, a report from the Business, Energy and Industrial Strategy Committee praised the Scottish Government for being leagues ahead of the UK Government on energy efficiency, and we continue to deliver on that front. Our planet is facing unprecedented challenges, with soaring sea temperatures, and action is urgent. It was disheartening that a previous BEIS Secretary and disgraced former Prime Minister Boris Johnson blocked plans for a public information campaign on energy efficiency. How much could consumers have saved if they had received the necessary information and support? Many of our constituents do not know that help and support is out there in the form of these schemes.
The Scottish Government have taken proactive steps towards energy efficiency and are committed to investing at least £1.8 billion in heat and energy efficiency over the course of this Scottish Parliament. Through existing programmes, we have already supported over 150,000 households in or at risk of fuel poverty, including those in rural and island communities. Our Home Energy Scotland grant and loan scheme offers grant funding of up to £7,500 for heat pumps, with an additional £7,500 made available as an optional interest-free loan. Moreover, we have provided an uplift of £1,500 to both the heat pump and energy efficiency grants for rural and island homes, recognising the specific challenges faced by those communities.
Beyond immediate measures, we must recognise the urgent need to change the way we use our energy. As oil and gas production naturally declines, there is a tremendous opportunity for growth in low-carbon energy production. It is projected that low-carbon energy jobs could increase to 77,000 by 2050, delivering an increase of 7,000 jobs across the energy production sector. The Scottish Government’s draft energy strategy and just transition plan outlines the actions necessary for the UK Government to collaborate with us to achieve Scotland’s full energy potential. To facilitate that transition, the Scottish Government, led by the SNP, are already investing in the sector’s net zero transformation.
Our expanded £75 million energy transition fund and £100 million green jobs fund, alongside the £500 million just transition fund, will support regions such as the north-east and Moray in becoming centres of excellence for a just transition to a net zero economy. That stands in stark contrast to other parties, which have historically bled the north-east of Scotland dry and left the region on the proverbial scrap heap.
Renewable energy presents a significant economic opportunity for Scotland. The just energy transition will deliver a net gain in jobs across the energy production sector. The Scottish Government have taken decisive action, but we are constrained by the limitations imposed by Westminster’s grip on the purse strings. It is time for the UK Government to recognise that and the importance of energy efficiency, collaborate with us and our colleagues in the Scottish Government, and provide the necessary support to achieve our shared goals.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure, as always, to see you in the Chair, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing the debate.
We have heard from all Members who have spoken how important it is for the Government to look at the complexities of this issue. I represent a predominately urban constituency and, by and large, the other Members we have heard from represent rural constituencies. Each area will have different problems depending on its housing stock, the availability of skills and so on, but it is the Government’s job to try to iron those problems out. That is why it is important that we are having this debate so that people can put on the record some of the issues they have found.
Let me start with the broadbrush issues with retrofitting. Members have set out well that the crisis of rising energy bills has brought home to people how much energy they lose through having poorly insulated homes—energy is literally going through the roof—and how we could reduce not only bills, but our emissions if we had homes that met the EPC C standard.
I would say that this is about retrofitting existing homes, but the Government had a pledge to introduce zero-carbon new homes and then dropped it. Estimates suggest that well over a million homes have been built since then that do not meet the EPC C standard. Given that we face such a massive task in retrofitting existing housing stock, it seems ludicrous that we do not insist that new builds meet a certain standard, because we will need to retrofit them not too far down the line.
I have just come from the Energy Bill Committee, where we were talking about how we ensure that we have the skills for a just transition. This work tends to be carried out by small and medium-sized enterprises and sole traders—it is not as though there is one big company that will deliver it—and they need certainty that this is a line of work in which there will be jobs for the foreseeable future. With schemes stopping and starting as they have in the past—there was lack of consumer confidence because of the way some earlier schemes floundered—people will not move into those jobs, particularly given the shortages of construction workers, plumbers and electricians. It can be difficult to get people to do even the traditional jobs, let alone move into this area. We must address that to create stability.
The need for consumer advice was mentioned, and I just mentioned consumer confidence. Previous experience shows us that that is really important. This is about going into people’s homes, uprooting their domestic lives and putting them at risk of having to pay a lot of money. Under earlier schemes, cowboy operators did not do work to the expected standard and people were suddenly told that they needed extra—
Liz Saville Roberts
It seems evident to me that, since many of the people who will qualify for support through these schemes will be vulnerable, unless protections are built in for them, they may not be able to deal with it when work is not done to the expected standard, which is what we will hear about as MPs. I would have expected the Government to build that into the schemes in the first instance because of the nature of the people they are trying to support.
Kerry McCarthy
That is very much the case. I have been in this place for 18 years. Earlier in my career, I saw in my casework people who had been ripped off really struggling to deal with the bureaucracy of whether they would be able to get public funding and whether they had to pay the people who were literally on their doorstep asking for money.
Turning to where we are now, the ECO scheme was well intentioned and welcome, but it is not working. At the moment, the UK has the least energy-efficient housing in Europe and home insulation rates have plummeted. Many statistics have been bandied around. My numbers are slightly different and relate to a different time period. In 2013, the coalition cut energy efficiency programmes; in the same year, insulation rates fell by 92%. That is what I go back to—the period when the market crashed, setting us back about a decade to where we are now. Last year, only 159,699 ECO measures were installed in low-income and fuel-poor homes, a reduction of 59% from the 393,706 in 2021.
There is a substantial gap between Government insulation targets and delivery where ECO4 is concerned. Analysis from E.ON Energy suggests that, as of December 2022, the industry had completed around 11% of the obligation, compared with an expected 19%. We estimate that at the same point during the ECO3 scheme, the industry had completed 29%. That delay will have consequences. A report from the World Wide Fund for Nature and ScottishPower warns that the Government are on track to insulate just one sixth of the homes needed to meet their target of reducing energy consumption by 15% by 2030.
I have spoken to people from various businesses in the retrofit industry, and they fear that the same mistakes are being made. Nigel Donohue, chief executive of the Installation Assurance Authority, said the transition to ECO4 was
“really poorly managed…despite conversations with the Government about not allowing this to happen to the industry again”.
There is no getting away from the fact that the scheme is really struggling.
There are two major issues delaying delivery. The first is limitations on scoring. Aeon estimates that up to 90% of the properties eligible for ECO4 will not receive the support they desperately need because those homes do not meet the minimum improvement requirements. The goalposts that must be cleared for properties to meet the SAP score are being moved, so vulnerable, fuel-poor households have been ruled ineligible and are missing out.
The second issue is costs. Funding assumptions under ECO4 are significantly lower than actual installation costs, and rising inflation has led to costs in the supply chain escalating even further. With current inflation rates and the skill shortages, those costs are likely to be increasing incrementally, almost by the week. I am not convinced that the Government have taken that into account. Delivering loft insulation, for example, is currently 430% more expensive than the Government estimate, while cavity wall insulation is 372% more expensive. These are clearly not small discrepancies, and they have to be recognised in the ECO4 scheme.
The Department for Energy Security and Net Zero acknowledged the increased costs when consulting on the ECO+ scheme back in December, but ECO4 has not been aligned. There is also the problem I mentioned of the gaps between schemes causing confusion and a drop in uptake. There was a four-month gap before ECO4, and I think at one point prior to that there was an 18-month gap between schemes, which I am told had a major impact on the skills front. We cannot allow the same to happen with ECO+. Continuity is needed.
I have also spoken to a housing association boss who says that he thinks the schemes are working okay generally, but that timescales and bureaucracy are a big problem. Low levels of contribution to band D homes means that installers and energy companies are less likely to take them on. He would like a focus on ensuring that installers are compliant with publicly available specifications, PAS, in the long term, so that people trust retrofitting more, but at the moment the process is very bureaucratic. He cites a case where a 115-page form was needed to fit loft insulation that took only an hour to install. I do not know how long it takes to fill out a 115-page form, but I would imagine that it was considerably longer than one hour. He also said that with schemes such as the home upgrade grant, the focus on specific measures, rather than letting retrofitting co-ordinators decide what is best, sometimes means that they cannot offer support for some houses.
It would be remiss of me not to mention how well Bristol is doing at retrofitting homes through its City Leap programme. The 3Ci website has a really good account of what we are doing. One of our ambitions, for example, is to get all social housing up to EPC C by 2030, which involves an innovative arrangement with private sector finance. Under our green prosperity plan, Labour is committed to spending £6 billion a year to retrofit 19 million homes to EPC C within a decade, saving families an average of £1,000 a year on their energy bills, creating over 206,000 new full-time equivalent jobs, and cutting national gas imports by up to 15%. I hope that we will be ready to start work on that in just over a year’s time, or whenever the election is called, but it would be good if the current Government addressed some of the underlying issues, particularly the skills gap, ensured continuity of supply, and listened to what Members have said today, so that we are ready to hit the ground running. Even if we do not win the next election, I am sure the Minister would hope to get things in a better place so that we can steam ahead with this programme.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
It is a great pleasure to be serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing this incredibly important debate and thank all those who have contributed. As you may know, Mr Paisley, this issue is not in my portfolio; however, I am here to represent the Government and to take away any questions that I am unable to answer today.
I welcome all Members’ contributions; they really have been incredibly helpful. I thank everyone, particularly the hon. Member for Ceredigion, for the suggestions they made throughout the debate. One of the things that we really need to apply within all of this activity is common sense, and a lot of the suggestions that I have heard today have been based on common sense.
Although they are not relevant to this debate, I will also talk about the energy costs that really play on my mind as the Minister with responsibility for consumers and affordability. Clearly, there are many schemes that I could go into, although, as I say, they are not relevant. I will just say what many hon. Members have already said, which is that we must encourage all consumers to make sure that they get all of their benefits. I thank the hon. Gentleman for raising that issue; as Members of Parliament, we should always encourage people to do that.
The energy company obligation is the Government’s most successful domestic energy efficiency scheme in Great Britain. It obliges larger energy suppliers to deliver bill savings for households by installing energy efficiency measures. Since it began in 2013, it has delivered 3.6 million measures in more than 2.4 million properties, which means that over 9% of British households have had an ECO measure installed. Low-income and vulnerable households will save over £19 billion on their bills over the lifetime of the measures that have been installed. As the hon. Gentleman may know, over 17% of households in his constituency have received ECO measures over the last decade.
ECO4 was introduced last year and runs until March 2026. It has continued to support low-income and vulnerable households while also increasing the focus on the least energy-efficient properties and on fuel poverty. To be eligible for it, households either have to be in receipt of means-tested benefits, live in social housing or be referred by their local authority or energy supplier. For the first time, part of the overall target has been met by upgrading the equivalent of 150,000 of the worst-performing homes, with those living in homes with energy performance certificate ratings of E, F or G the most likely to be in the deepest fuel poverty. Also for the first time, we set a minimum requirement for energy efficiency improvements, depending on a home’s energy efficiency rating. This means that more of the households receiving help will be brought out of fuel poverty permanently. We estimate that at current energy prices, households benefiting from ECO4 will reduce their annual energy bills by over £600 on average.
Delivery under ECO4 commenced last April, with around 130,000 measures delivered to over 43,000 low-income households. The scheme data shows a gradual increase in delivery, and recent reporting from the supply chain indicates that delivery has continued to increase through May and June.
I am sure that the hon. Member for Ceredigion will be delighted to hear that Ceredigion continues to benefit disproportionately from ECO4; over 1% of all measures installed under ECO4 have been in his constituency. This success is partly due to the explicit incentive within the scheme to treat off-grid rural homes in Wales and Scotland, and it is also thanks to the ECO Flex provision, which allows up to 50% of the overall obligation to be met by treating homes that have been referred by a local authority or a devolved Administration. Ceredigion is one of the leaders in that part of the scheme.
Nevertheless, I assure the House that we are not complacent. We continue to monitor delivery closely, working with local authorities, energy suppliers and devolved Administrations to share best practice about ECO Flex and to remove administrative barriers where possible. Ofgem has recently republished guidance that should make the ECO Flex process easier, and, as has been mentioned, we are considering how the whole scheme can be amended. We recognise that costs have increased since we developed ECO4 and that, as the hon. Gentleman explained, meeting the minimum improvement requirement in certain homes is challenging. We are considering whether changes to the policy are desirable and analysing the potential impact of such changes. For example, we will need to examine the consequences of relaxing the minimum requirement for our fuel poverty targets, given the imperative of proofing homes to band C. Making changes to ECO4 will require a public consultation and amendments to affirmative regulations, so any changes we decide to make will be well informed by external stakeholders.
On the hon. Gentleman’s point about expanding the list of technologies, the primary legislation that enables ECO4 and GBIS limits technologies to those that reduce space heating costs. While we are open to expanding the eligible technologies in the future, that would require a change in primary powers. Beyond ECO4, and in response to persistently high energy prices, we have extended the help available through a new eco energy efficiency scheme: the Great British insulation scheme, which many Members mentioned. Previously consulted on as ECO+, it will boost support for those on the lowest incomes and the most vulnerable, and extend help to a wider pool of households who are also challenged by high energy bills.
ECO4 and the Great British insulation scheme are a major expansion of the Government’s action on energy efficiency. The predecessor ECO3 scheme was worth £640 million annually, and total ECO funding has now reached £1.3 billion per year to March 2026. We estimate that by April 2026, the GB insulation scheme will have delivered about 376,000 measures to about 300,000 households, helping households to cut heating bills by an average of £300 to £400 per year.
These schemes also create continuity for the supply chain. To further facilitate supply chain growth, the Government have increased funding for training schemes, as many Members mentioned. The Department’s £9.2 million home decarbonisation skills training competition, launched in September 2022, has awarded grant funding to 19 training providers in England to deliver subsidised training in the energy efficiency, building retrofit and low-carbon heating sectors. That training will deliver an estimated 9,000 training opportunities to the building retrofit, energy efficiency and heat pump sectors through to summer 2023. That includes accredited training to qualify standard installers and retrofit co-ordinators.
Alongside the energy efficiency upgrades we are making through the Great British insulation scheme and ECO4, the Government are investing £6.6 billion over this Parliament in clean heat and energy efficiency, reducing our reliance on fossil fuel heating. In addition, £6 billion of new Government funding will be made available from 2025 to 2028. We have heard it said that consumers are at the heart of everything we do, and I give my assurance that one of the things we are doing is reaching out to stakeholders. Hon. Members have also mentioned places such as citizens advice bureaux. Clearly it is important that we talk to people about the cost of living but also what we are doing in our ongoing support.
The Government investment I have listed, as well as specific investment in building a market for green finance, means that a range of green financing options are already available from high street lenders to owner-occupiers and private landlords. They include things such as green mortgages and additional borrowing facilities, or cashback offers to homeowners undertaking energy retrofit. Some energy suppliers also offer 0% finance for certain energy efficiency products. Improving the energy efficiency of our homes is the best long-term solution to reducing energy bills and tackling fuel poverty. ECO4 and the GB insulation scheme will support that, while also helping to protect our nation’s energy and support our net zero target.
A comparative assessment of cost assumptions for the ECO4 scheme and those set out in the Great British insulation scheme consultation has also been talked about. We are monitoring ECO4 delivery against the current cost assumptions, and we will consider changes if necessary. Changing the cost assumptions may require a change to the overall energy bill reduction target, to the estimated funding, to policy details of the scheme, or a combination of all three. Such changes will require public consultation and regulatory change.
There are many more areas that I could discuss, but I will end by thanking the hon. Member for Ceredigion again for securing this important debate. I look forward to continuing to engage with him and all ECO stakeholders to ensure that the schemes continue to help fuel-poor households, support jobs and deliver value for consumers.
Ben Lake
I thank all those who have contributed to the debate; it has been very detailed and useful. As well as some of the practical concerns and challenges, we have discussed some of the broader and deeper tensions within various aspects of the policy, and how changes to one aspect might have a detrimental or unintended impact on another.
I am grateful to all colleagues. I thank the hon. Members for Bath (Wera Hobhouse), for Strangford (Jim Shannon) and for Westmorland and Lonsdale (Tim Farron), who made speeches. I also thank the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), the hon. Member for Bristol East (Kerry McCarthy) and the Minister, as well as those who made interventions. It has been a good debate with a consensus that this objective is very important, and the policy will deliver a great deal of good for households as they face ever-increasing pressures on their finances.
I have the last word, as it were. I will use it to say that I am pleased that the Government are monitoring the situation, particularly the cost assumptions. That will be broadly welcomed by those who are responsible for installing some of these measures.
Question put and agreed to.
Resolved,
That this House has considered the implementation of ECO4 and ECO+.
Protection of Seals
(10 months, 2 weeks ago)
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Sarah Olney (Richmond Park) (LD)
I beg to move,
That this House has considered the protection of seals.
It is a pleasure to serve under your chairmanship, Mr Paisley. I am delighted to have secured this debate. I particularly thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for all her hard work on the subject of seal welfare. I was proud to sponsor her Seals (Protection) Bill last year. I hope this debate might offer a chance to discuss this vital topic.
Ensuring the protection and welfare of seals is a dual process of education and legislation. Seals are rare enough that their presence is a novelty to many communities, making information and guidance essential. However, there will always be individuals who, for whatever reason, do not mind disturbing wildlife and do not care about the impact of their actions on the ecosystem. In the light of that, I urge the Government to amend the Wildlife and Countryside Act 1981 to make the intentional or reckless disturbance of seals an offence. This would give seals the same protections as whales and dolphins, and would bring England and Wales in line with existing seal protection legislation in Northern Ireland and Scotland, creating a consistent framework across the UK.
The issue of seal welfare first came to my attention two years ago, when the riverside near Hammersmith bridge in the north of my constituency became home to a curious and excitable seal pup. Nicknamed Freddie Mercury for his love of the spotlight, he quickly became a treasured feature of the local community. The return of seals to the River Thames was a joy, not just to local people, who loved to watch Freddie sunbathe and play, but to campaign groups, who saw their presence as a sign that the Thames was finally recovering from decades of pollution. While seals are rare in my constituency of Richmond Park, whenever they are sighted they always capture the public’s attention.
Sadly, just a few weeks after arriving on our shores on 21 March 2021, Freddie was attacked by a passing dog. Although onlookers intervened to try to save him, he had already had his flipper broken and suffered horrific wounds. Two days later, Freddie died. The owner of the dog that killed Freddie was not a callous person. Had she been aware of Freddie’s presence and the need to keep her dog on a lead, she would have done so. Unfortunately, Freddie’s story is not uncommon. Almost every day seals are injured or killed by our negligence. In many cases, these incidents are entirely preventable. I have been encouraged to see that, since Freddie’s death, the Department for Environment, Food and Rural Affairs has provided support and funding for a number of initiatives to educate the public about seal welfare. I also welcome the introduction of the marine and coastal wildlife code last month and hope that the Department will continue its work to spread best practice and behaviour to communities.
Tracey Crouch (Chatham and Aylesford) (Con)
I congratulate the hon. Lady on securing this debate. As he is here, I also thank my right hon. Friend the Member for Camborne and Redruth (George Eustice), who was incredibly supportive of the Seals (Protection) Bill, which I introduced in February 2022. Although the code she has referenced is welcome, it is still only advisory, so does she agree that we need legislation such as the Seals (Protection) Bill, which would amend the existing legislation, to protect seals from intentional or reckless disturbance?
Sarah Olney
I thank the hon. Member for her intervention; that was the point I was about to make. As well as the education initiatives, which have been so welcome, we need more progress on the legislative side of this issue.
Just a few weeks after Freddie’s death, a BASE jumper performed a jump directly above a group of seals in north Wales. Despite being warned of the threat he posed to local wildlife, he went ahead with the jump, causing a mass stampede of seals into the sea. That kind of disturbance may seem relatively harmless, but it can be catastrophic for the animals involved. It disrupts the pups’ feeding, reduces their chances of surviving the cold winter months and leaves adults stressed and tired. Extreme cases can result in injury or death. When startled, some seals will do anything to hide from suspected predators, throwing themselves off rocky ledges towards the oceans, breaking jaws and flippers. Unable to swim or eat, seals injured in this way will die soon after.
Freddie’s death and the stampede in north Wales reinforce the need for a dual approach whereby education and legislation are implemented hand in hand to ensure the safety of seals in Britain’s waterways.
Robin Millar (Aberconwy) (Con)
I thank the hon. Lady for securing this debate and for the way she is setting it out. Angel Bay, in my north Wales constituency, is well known for its seal population. In fact, this debate is extraordinarily timely, as today I have been contacted by constituents who are concerned because a film crew are out there. I happen to know that they are supported by the North Wales Wildlife Trust. Will she join me in thanking groups such as the North Wales Wildlife Trust and the many volunteers who look after these colonies and help to balance the important demand for education of the public with the protection of these remarkable creatures?
Sarah Olney
The hon. Member is absolutely right. We have a fantastic group of voluntary organisations in this country that are really dedicated to protecting the interests of seals and ensuring their welfare. It is great news to hear that the film crew in his constituency are working closely with the North Wales Wildlife Trust, but we also have organisations such as the Seal Research Trust, Seal Watch and the Seal Alliance. There is a whole group of organisations doing really valuable work in this area.
We have a special responsibility on behalf of the rest of the world to ensure that we protect these rare creatures. The United Kingdom is home to more than a third of the global grey seal population. We are a sanctuary for seals in Europe, and we should have legal protections in place to ensure that they are not harmed by our actions. Beyond our global responsibility, introducing a ban on seal disturbance would safeguard the current economic benefits brought by these creatures and encourage further responsible, sustainable seal-based tourism.
Duncan Baker (North Norfolk) (Con)
I support what the hon. Lady is trying to do. On the point about numbers, I represent North Norfolk, which has some of the largest seal colonies in the whole of Europe. Off Blakeney Point, we have 3,000 pups born every single year. In the east of my constituency, the Friends of Horsey Seals does an incredible job at looking after seals all year round. The hon. Lady is absolutely right that we need to bring in more protections. The Marine Management Organisation can quite often create byelaws. If the Minister is unable to create legislation to deal with this issue, I wonder whether the MMO could introduce byelaws in certain locations to help to stop seal disturbances.
Sarah Olney
The hon. Member is absolutely right. I am quite certain that more can be done at every level of government, but he is absolutely right to make the point about certain sensitive locations in his constituency. If we are not able to progress with legislation on a national level, local opportunities should be pursued. Perhaps that is something the Minister might like to address in his remarks.
Coastal tourism in Great Britain is estimated to generate £17.1 billion in spending and support 285,000 jobs in seaside towns. Those jobs are a vital source of employment in many coastal towns, which often suffer from high levels of deprivation and unemployment. Seal watching has already become a mainstay of the tourist industry in Scotland and, with the right protections in place, could bring huge value to struggling coastal communities across England and Wales. In 2015, the National Trust found that 39% of visitors to the UK coastline came with the intention of getting close to nature and wildlife. In Norfolk, nearly 80,000 people a year are estimated to visit the seal colony at Horsey, while certain seals in Devon have developed a cult following among tourists, with their own social media pages and supporter groups.
Seals are uniquely well suited as tourist attractions. Unlike other marine megafauna, they are found in predictable locations, reside in an open habitat and can be seen in all seasons. If managed correctly, seal watching could boost tourism across the UK coastline and increasingly become a valuable source of revenue for British tourism.
George Eustice (Camborne and Redruth) (Con)
I congratulate the hon. Lady on securing this important debate. I want to highlight the work of the Seal Research Trust in Cornwall. At Mutton Cove, we have a fantastic number of seals and some great work is done. Further to the point made earlier, does she think that, as well as the MMO potentially having powers to introduce byelaws, the inshore fisheries and conservation agencies could also do so; and that, rather than having an offence for disturbance, it might be better to create an obligation on certain marine agencies to give consideration to seals when designating byelaws?
Sarah Olney
I thank the right hon. Gentleman for his intervention, which demonstrates that there are many routes to achieving the goal that we all want. Perhaps the Minister will address that point in his closing remarks.
Unfortunately, badly managed tourism and inappropriate individual behaviour can threaten this industry. According to data gathered by the Seal Research Trust, 68% of the time that humans are present near seals, the animals have been disturbed. Continued disturbances and a persistent human presence in close proximity to seal habitats can mean the permanent abandonment of formerly well-used habitats, behaviour alterations and reduced survivorship for the whole local population. For that reason, it is crucial that public and private businesses are issued with more than simple voluntary guidance. They must be bound by law to uphold certain standards; otherwise, we may see fewer seals in our seas in years to come.
The damage caused by human disturbance may not be immediate or obvious, but it is very real. Without protection, some seal colonies will be abandoned, costing communities money and throwing the local ecosystem into chaos. Like most British marine life, seal populations are under intense pressure. Although their numbers have boomed in recent years, they must increasingly contend with litter in the ocean, changing prey patterns and extreme weather. However, unlike addressing most environmental issues, improving conditions for seals would be extremely simple for the Government. Reduced rates of disturbance would allow more seal pups to survive until maturity, and would leave adults to properly rest and recuperate between trips to the ocean.
In 2021, the Government committed to becoming a global leader in animal welfare, and to setting high standards for others across the world to follow. Although those are commendable aims, many of my constituents were heartbroken when the Animal Welfare (Kept Animals) Bill and the Animals Abroad Bill were set aside. They were hoping to see a genuine commitment to the protection of animals, but so far they have unfortunately been let down. Given that two of the Government’s three flagship animal welfare Bills have now been scrapped, I hope that the Department has time to revise its current guidance and create some small pieces of legislation that will show that the Government have not entirely abandoned their commitment to animal rights.
Charities such as the Seal Research Trust, Seal Watch and the Seal Alliance are already doing fantastic work to educate the public. A huge amount of effort goes into their work of spreading good practice. I want to recognise the dedication of my constituent Mary Tester, who is in the Public Gallery, and Sue Sayer from the Seal Research Trust. Their commitment to seal welfare is commendable, and they have done so much to inform and educate people visiting or living near seal habitats. Unfortunately, despite their tireless work, it takes only one bad tour operator or persistently uncaring person in each area frequented by seals to cause serious damage to the local population.
In the coming decades, marine life will be stressed by warming seas, plastics in our oceans and the effects of decades of over-fishing. By creating stronger protections for seals now, we can give them the best chance of surviving the difficult years ahead and ensure that future generations have the opportunity to see these wonderful creatures in the wild for years to come.
The Minister for Food, Farming and Fisheries (Mark Spencer)
It is a pleasure to serve under your chairmanship, Mr Paisley. I thank the hon. Member for Richmond Park (Sarah Olney) for securing the debate. We have a rich wealth of marine life in the UK, and it is important that we continue to raise such issues and champion the protection of those species.
The UK Government have a strong track record in ensuring that protection and management measures are in place for marine species. As the Minister with responsibility for fisheries, I fully acknowledge the fishing industry’s expertise and stewardship of the marine environment. I recognise its concerns about the potential impact of environmental protections on livelihoods.
The British coastline is home to two globally important populations of seals: a significant 38% of the world’s population of grey seals, and 30% of European harbour seals. Seals play an important role in the marine ecosystem, but they face a list of threats, including pollution, entanglement, marine plastic and debris, climate change and, as the hon. Lady said, disturbance from human interaction.
None the less, we have a comprehensive suite of protections in place for seals, including the Conservation of Habitats and Species Regulations 2017 and the Conservation of Offshore Marine Habitats and Species Regulations 2017, which make it an offence to capture or kill a seal. Seal shooting licences and the shooting of seals, which were previously allowed under the “netsman’s defence” provision in the Conservation of Seals Act 1970, have been banned since 2021. The Act is equally applicable in inland waters, rivers, coastal areas and territorial waters.
It is also an offence to take, injure or kill a seal under the Wildlife and Countryside Act 1981. The Act makes it an offence for anyone to disturb any animal that is recognised as a designated feature in a site of special scientific interest. For example, as my hon. Friend the Member for North Norfolk (Duncan Baker) said, in Norfolk there are two SSSIs designated for harbour seals: the Wash and the north Norfolk coast. Seals uniquely occupy both marine and terrestrial spaces. Seal spotting at beaches and estuaries is a popular pastime for coastal visitors.
Together with the Seal Alliance, the Department for Environment, Food and Rural Affairs launched the “Give Seals Space” campaign in 2021, to help to raise awareness of the impact of disturbance on seals, and the importance of keeping dogs under close control. Earlier this year, we also published England’s first national marine and coastal wildlife code. The code provides further targeted guidance for coastal visitors on marine species and activities.
The Government recognise that seals interacting with fishing gear and eating fish can be a problem for some sections of the fishing industry. I have also heard concerns directly from the industry that seals can stress aquaculture species in pens, such as salmon. That is why we work closely with the seafood industry, as we develop non-lethal deterrents and implement protections.
In 2022, the UK Government and the devolved Administrations published the marine wildlife bycatch mitigation initiative, setting out how we will work collaboratively with the fishing industry and stakeholders to minimise and, where possible, eliminate the bycatch of sensitive marine species. DEFRA also worked alongside the Marine Management Organisation to fund the development of non-lethal methods to help prevent negative seal-fishery interactions and costly damage to fishing gear. The MMO has been working with the fishing industry to test the use of targeted acoustic startle technology as a seal deterrent. I am pleased to say that it is yielding promising results for limiting seal interactions for specific fisheries. A full report on that is due to be published shortly, and we are considering the next steps that we can take to address the issue under the Clean Catch UK programme.
The UK marine strategy provides a framework for assessing and taking measures to achieve and maintain good environmental status in our seas. It covers a range of biodiversity and marine environment indicators, which include a seal abundance and distribution indicator. Overall, GES for seals has been partially achieved. We will also continue to be at the forefront of marine protection. We are developing a well-managed network of marine protected areas. We have recently designated the first three highly protected marine areas in English waters. Sites protecting seals include Berwickshire and north Northumberland, which have MPAs protecting grey seals, and the Wash and north Norfolk coast, where the MPA also protects harbour seals, as I mentioned earlier.
As a final point, we can only protect and manage the marine environment effectively when we do so in collaboration with the countries with which we share the ocean. I am proud that the UK is a leading voice for the protection of marine mammals internationally.
Tracey Crouch
I am listening to the Minister with great interest. It is undeniable that the Minister and the Department are doing what they can to enhance the protection of seals, particularly through measures in the fishing industry, as he has spoken about at length. However, my Bill—the foundation of today’s debate—is about humans and their interaction with seals, and the disturbance and harassment they cause. There are still many campaigners, including those in the Public Gallery and those who have made representations in the past, who feel that not enough is being done to stop the intentional harassment of seals. Although the things the Minister is outlining in his speech are wonderful, he has not addressed the point that a great number of people are still disturbing seals, causing them great harm.
Mark Spencer
That is something that the Government recognise. We clearly do not want to see that disturbance by members of the public. That is why, as I said earlier, together with the Seal Alliance, in spring 2021 we launched the new Government-backed “Give Seals Space” campaign to help to raise awareness of the impact that human disturbance can have on seals, and to try to reduce it. To help to address rising numbers of summer visitors to coastlines and minimise the disturbance, in May 2023, DEFRA published England’s first national marine and coastal wildlife code. It is about educating members of the public to ensure that they are aware that their interactions with seals can disturb and have a negative impact.
George Eustice
I am conscious that we are potentially close to a Division, so the Minister will want to wind up soon. He is right that there is a comprehensive set of legislation dealing with the injuring, killing or taking of a seal. On the issue of disturbance, however, there is potentially a gap. We can do awareness raising campaigns —I was responsible for introducing those at the time—but sometimes there may be recreational tourist boats, for instance, that cause a disturbance. Allowing inshore fisheries and conservation authorities the power to introduce certain byelaws to manage that activity could make a big difference.
Mark Spencer
I pay tribute to all the work my right hon. Friend did as Secretary of State to move us forward in this area. Our ears are always open to new ideas, and this debate has played a significant part in ensuring that the Government are tuned into some of the thoughts of colleagues across the House.
We are seeing increasing public awareness, and we are carrying out industry engagement. Innovation is also going to help, and we have a range of legislative, licensing and spatial conservation measures in place. I am sure there is still more to do, but I am proud of what the UK has done to deliver in this space. I thank Members from across the House for engaging in the debate.
Question put and agreed to.
Population Growth: Impact of Immigration
(10 months, 2 weeks ago)
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Sir John Hayes (South Holland and The Deepings) (Con)
I beg to move,
That this House has considered the impact of immigration on population growth.
It is a delight to speak in this Chamber on a subject which is not a delight; it everything but a delight, as I shall articulate briefly in this important debate. It is a pleasure to serve under your chairmanship, Mr Paisley.
The greatest Prime Minister, Benjamin Disraeli—of course, a Conservative, but I suppose that is implicit—said that
“change is inevitable…change…is constant.”
I want to speak about the course, character and consequences of change.
Each of us encounters change in our lives. The ultimate change is death, the first change we enjoy is birth, and those between can be either joys or sorrows, but our capacity to adapt to change is not limitless. The enduring touchstones of familiarity help to give our lives certainty and assurance, and it is vital that we understand that that applies communally and collectively as well as personally. Yet the changes that this country has seen in population growth have been dramatic.
So much of the political debate that we cherish and thrive upon in this place is about change, and yet the Government have made no real measure of the effect of a rapidly growing population and have no mechanism across Government to deal with its consequences. When I first ran for Parliament in 1987—I know there are people in this Chamber thinking, “How can that be possible?” and it is true that I was all but a boy in those days—net migration was just 2,000. Up until the mid-1990s, migration was essentially balanced. We had people leaving the country and people coming, and that is what all advanced countries enjoy, for it is the inevitable consequence of being an advanced economy.
When I was first elected to this House in 1997, 10 years later, net migration was 47,000. Ten years later—10 difficult, and some would say tragic, years under the stewardship of Mr Blair—net migration was 233,000. Under the previous Labour Government, total migration was 3.6 million, and nearly 1 million British citizens emigrated, so net migration topped 2.7 million. The rate of inflow between 1997 and 2010 equated to one migrant arriving every minute. Every year since 1997 bar one—when the world was locked down—net migration was in excess of 100,000, and often by a much bigger margin than that. Indeed, net migration has averaged about 250,000 a year over the past two decades.
The most recent figures published by the Office for National Statistics last month are truly shocking: they heralded record net migration of 606,000.
James Daly (Bury North) (Con)
Does my right hon. Friend find it even more, frankly, antidemocratic that at no point in that whole process since the 1980s have the electorate been asked whether that outcome is what they want?
Sir John Hayes
That is entirely true. Indeed, there is a huge gulf between the expectations and the sentiments of the vast bulk of the British population on this subject and those of that awful marriage of greedy plutocrats and doubt-fuelled liberals, who seem to think that endless migration is acceptable. My hon. Friend is right: this has been done without consent—indeed, without as much as consultation, let alone consent.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman on bringing this forward. I understand the direction he is going in, but my understanding is that 1.2 million people migrated to the UK and 557,000 left to go elsewhere. That leaves a balance, as the right hon. Gentleman said, of 606,000 at the end of June ’22. Does the right hon. Member accept that many of the people who are coming here have a contribution to make to society and can build society alongside us? I understand that economic migrants are outside of this system, but there are many who want to make a contribution. Does he accept that fact, and does he think that the contributions they make to the NHS and to families are important?
Sir John Hayes
Yes, of course I accept that and I will say a bit more on that later on. Of course it is true that people come here and make remarkable contributions to our communities and to our society. This is not about a failure to acknowledge that contribution; it is about dealing with the unprecedented scale and pace of it. It is impossible to sustain this level of migration for reasons I will set out.
To be clear about the relationship to population, migration alone accounts for 57.5% of population growth in England and Wales. Since 2001, the UK population has increased by 8 million, of which nearly 7 million was due to immigration. Just imagine that figure for a moment. To put it in context, that equates to the combined populations of Birmingham, Manchester, Belfast, Cardiff, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, Newcastle, Peterborough, Ipswich, Norwich, Luton and Bradford. A much higher population increase can be expected in future years unless we do something radical to address this problem.
Paul Girvan (South Antrim) (DUP)
My point relates to the ratio of numbers of individuals who have come to certain regions of the United Kingdom. In Northern Ireland, we have a fairly small population—maybe even in comparison with some of the cities that have just been mentioned—and yet we have received a large percentage of the people coming in. I am talking about illegal immigrants, of which we took 3,356 in Northern Ireland. We were told that we would take 1,000. Those people are in 21 hotels, which are part of one of our growth industries in Northern Ireland, and are taking up more than 1,100 rooms. That is a big problem. Unfortunately, Scotland has taken a lot fewer. People will ask what is going on there. It is not fair.
Sir John Hayes
Of course, when people arrive in the country, there is no accounting for where they choose to go. They will typically go to places where there is work, understandably; we would, too, after all. When I speak of these general numbers, the impact in certain parts of the country, as the hon. Gentleman suggests, has been much more profound than in others.
To go back to my point about change. The ability to cope with that level of change economically, socially and culturally has placed immense burdens on those communities that have enjoyed the greatest levels of migration. The population of this country grew by 606,000 last year. The fact that that is unprecedented is a matter of fact. The fact that it is unacceptable is obvious. The scale of growth will put unbearable pressure on already stretched—
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
Will my right hon. Friend give way?
Sir John Hayes
I will be happy to do so in a second, but I just want to illustrate my point.
My hon. Friend may have been about to intervene to tell us this, but last year, we built around 180,000 houses. Bear in mind that the population increased by 600,000. We did not, and could not, build enough surgeries, clinics and hospitals to cope with more than 600,000 additional people. We cannot build enough new railways and roads to deal with the extra demand. We are simply adding 600,000 people to an infrastructure already in desperate need of being upgraded. The pressure on the NHS, which my hon. Friend will know a great deal about, is immense. There were 700,000 new GP registrations last year by people entering the country.
Dr Poulter
I thank my right hon. Friend for giving way. I wonder whether he might reflect that last year was slightly unusual in that this country rightly took in approximately 130,000 Ukrainian refugees. There was also a net inflow of about 90,000 British citizens returning. There were other refugees from Afghanistan and Hong Kong to whom we rightly held out our hand as a country to give refuge.
On a wider point, my right hon. Friend is at slight risk of suggesting that immigration per se is bad, when we recognise that people who come here and work hard for the NHS can make a great contribution to our country. Frankly, a number of our public services could not operate without them.
Sir John Hayes
People come with an economic need as well as providing an economic benefit. There are costs and benefits to every individual in this room and every person who arrives in the country. The degree of cost they bring will depend on their circumstances. If someone comes who is sick, elderly or infirm, their demand on the NHS will be much greater. If someone comes who is young and fit, economically active and skilled, their contribution to the economy will be much greater.
My hon. Friend is right that last year was exceptional, for the reasons he gave. When I spoke of a typical figure over the period of 250,000, he will understand that that is the size of several substantial cities. Just housing those people alone is proving impossible. The biggest single driver of housing demand is migration, and has been for a very long time indeed.
My hon. Friend is also right that our health service benefits immensely from people born overseas. Both of my sons were delivered by people born overseas. I have been treated by all kinds of specialist doctors, nurses and others born overseas, as have members of my family. I thank them for that service, and fully recognise and appreciate the contribution they have made.
James Daly
It is important to say, in respect of that, that the reason why that contribution is required is that we have palpably failed to train home-grown people, who could take the same jobs. Does my right hon. Friend agree that we fall into a lazy argument if we simply talk in platitudes, rather than look at the lives and opportunities of our citizens?
Sir John Hayes
My hon. Friend encourages me to digress, though within the scope of the matter before us. There is a macroeconomic lesson that needs to be taught to the Treasury and the Office for Budget Responsibility. There is a lazy assumption that increasing population is an automatic good for the economy. It is certainly true that an economy can be grown by those means, but that does not mean per capita growth. It means growth of an altogether cruder kind.
Moreover, the macroeconomic fact is that doing so displaces investment in recruitment, skills and modernising the economy. The economy is stultified in a high-labour mode. Britain’s chance to succeed and prosper in future is as a high-tech, high-skilled economy. Rather than displacing our attention, and subsequently policy and investment, in those skills, by recruiting labour from abroad, we should indeed look closely at the kind of economic future we want to build, and drive policy forward towards that future. My hon. Friend is right to draw attention to the myth that pervades the economic debate about migration.
I want to make two more points. One is on the likely future population. Experts estimate that the UK population could grow from 67 million to between 83 million and 87 million by 2046 if current immigration trends continue. Growth to 80 million-plus will result in the need to build between 6 million and 8 million more homes. That is equal to between 15 and 18 more cities the size of Birmingham by 2046. I do not say it lightly or blithely, but this is by far the greatest challenge facing the Government.
Mrs Natalie Elphicke (Dover) (Con)
I would like to expand on that very point and return to the issue of housing. My right hon. Friend might be interested to know of a visit I made to a housing development site in the midlands, where the vast majority of sales were to British national overseas people from Hong Kong, who were buying homes en masse on a development. When the development had been planned, it was not known that this migration route would be open, so the planners did not have that population level in mind. Does that not illustrate the challenges of long-term planning—how long it takes to build the homes we need—and show that the very quick changes in migration patterns have the impact he has described?
Sir John Hayes
I agree with my hon. Friend and pay tribute to her work in her constituency and more widely to highlight these issues.
To put this in perspective, if the UK continues to welcome the number of people we are admitting now, we would need to build 6.5 million more homes solely to cope with population growth over that period. Current immigration numbers require a home to be built in England every five minutes to meet skyrocketing demand. By contrast, even modest changes such as cutting net migration levels back to about 100,000 would help young people to get on the property ladder and prevent more of our countryside from being lost forever to house building.
Given the dramatically increased numbers of people coming here, driving immigration to levels never seen before in British history, urgent action must be taken. I look forward to hearing what action my right hon. Friend the Minister has in mind, but let me make some suggestions. Some work has been done already, due to the exceptional Home Secretary and Minister for Immigration that we are proud to have as members of the Government. The measures to limit master’s degree students bringing their dependants is welcome but insufficient. As I said at the time, it is odd—I will put it no more strongly—that those who are studying a taught master’s can no longer bring their dependants, but those who are studying a research master’s can.
Frankly, we need to be more bold altogether. We should raise the wage threshold for those entering the country on employment visas. We must look closely at the health service and the charges for accessing it—after all, it is a national, not international, health service. We need to focus on building domestic skills, as mentioned by my hon. Friend the Member for Bury North (James Daly), which would reduce the need to bring in people with skills that should be home-grown. We certainly need to look at the number of spouse visas issued and the criteria for issuing visas of that kind.
More than all of that, we need to recognise that people coming here can do an important job for us and welcome them accordingly, but they must know that they too will be disadvantaged if the infrastructure creaks to the point of breaking due to this unprecedented level of population growth.
The best way forward would be for the Government to take a holistic look at this challenge. My good friend Lord Hodgson of Astley Abbotts, in excellent paper he published through the think-tank Civitas, wrote of the need for an office for demographic change along the lines of the Office for Budget Responsibility. It would be missioned to establish proper evidence, provide expert advice and recommend actions for the Government and other agencies to deal with population change. It would set out long-term strategies to meet the needs that are inevitably the product of population growth. I would be interested to hear the Minister’s views on that very sensible idea.
We need to reduce the period that graduates can stay after completing their degrees from two years to about six months, and we must look again at the shortage occupations and skilled workers routes to ensure we are bringing people into the country only when strictly necessary and not allowing businesses to simply hire cheap labour. There is real evidence of declining working conditions. That point has been made very well by the shadow Minister, the hon. Member for Aberavon (Stephen Kinnock): working conditions, salaries and so on have been detrimentally affected because some of the people I described as greedy plutocrats—that was an understatement, by the way—would rather employ people on the cheap than do the right thing by their workers. I thought he made a strong case about that when he spoke about it recently in the House.
Disraeli also said:
“Man is not the creature of circumstances. Circumstances are the creatures of men.”
The prevailing circumstances this country faces in respect of population growth cannot be ignored any longer. We need leadership—I know my right hon. Friend the Minister is well placed to offer it—across the whole of Government because this affects every aspect of government. I have spoken about health, housing and infrastructure; I could have spoken about transport. Every time someone complains about roads and potholes —as they often do—they should know that every extra 10,000 or 100,000 people using the roads puts extra pressure on the infrastructure. I could pick almost every aspect of government—every Department. We need urgent action; otherwise, we will fragment our society, undermine our sense of shared belonging and alter our communities forever. More than that: we will not be able to sustain the good quality of life that British people rightly expect and want the Government to help them enjoy.
Several hon. Members rose—
Ian Paisley (in the Chair)
Order. This debate has a hard stop at 5.55 pm. I intend to call Alison Thewliss at 5.32 pm or thereabouts, so Members, monitor yourselves.
Scott Benton (Blackpool South) (Ind)
It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) on securing this debate. It is good to see him leading the debate on this issue, as he does on so many others.
In any advanced, modern economy and free society, people come and leave. That has always been the case in this country, and for the vast majority of our history the numbers of those coming and going have more or less been broadly in balance, as my right hon. Friend said. Sadly, for much of the past 25 years, that has not been the case. The Blair Government famously admitted to sending out search parties in an effort to bring immigrants here, and they deliberately engineered mass immigration to change the fabric of our society. Sadly, for all the promises over the past 13 years, that trend has broadly continued.
Last year, a staggering 1.2 million people came to the UK—equivalent to the population of Birmingham, or 10 times the population of Blackpool. Net migration totalled 606,000—a colossal number, simply unprecedented in modern times. Although last year’s figure was something of an anomaly, the general trend over much of the past two decades has been net migration in excess of 250,000 annually. That is simply not sustainable in any way, shape or form, and it is the British people—those who placed their trust in us to control immigration—who are suffering the consequences of this failure.
There is much talk at present of the housing crisis. Supply side issues, such as lack of planning reform, comparatively low numbers of new builds and the Government’s ill-advised interventions in the private rented sector, have all contributed to that crisis, but it is clear that immigration is the elephant in the room. We cannot allow the population to grow by the equivalent the population of Glasgow, as we did last year, and then wonder why on earth there is a housing shortage that is causing misery for so many people.
It is not just housing that is at breaking point. Our public services are also creaking under the strain of mass immigration. Take the NHS, for example: waiting lists are at a record high—yes, partly as a consequence of the pandemic, but the trend was long in evidence long before then—and I know as a former primary school teacher that in some of our schools much of the additional investment and funding put in over the last decade has been directed at specialist tuition and support for children who arrived here without having mastered the basics of the English language.
There have also been profound impacts on our labour market, with reduced investment in technological innovation due to over-reliance on cheap foreign labour. This has hurt productivity and suppressed wages for working people in all sorts of sectors, as I see in my local economy in Blackpool. We have to wean ourselves off this dependency on low-skilled foreign labour and an economic model that is, sadly, broken.
The immense demands that such high levels of immigration place on housing and our public services are recognised by the British people, who, frankly, are fed up with the situation. Time after time, they have stated that they want less immigration, and time after time they have been left disappointed. The Brexit referendum in 2016 was perhaps the clearest illustration of that, with many people, myself included, voting to leave the EU precisely on the basis of a promise to control immigration. Although we have ended free movement of people, which is to our credit, it is no good swapping high levels of EU immigration for high levels of immigration from the rest of the world.
Many of those who voted to leave the EU, and indeed many of those who supported our party in 2019, many of them for the first time, did so partly on the basis of our manifesto pledge to control immigration. Understandably, they now feel bitterly disappointed by our inability to control net migration, and who can blame them? Sustained high levels of immigration have changed the nature of some of our communities forever, and when new arrivals have not integrated into those communities, it has on occasion created significant problems.
The frustration that so many ordinary people feel is exacerbated by the fact that too few people in the liberal, metropolitan political establishment, across all political parties, are prepared to face up to the consequences of high immigration. People have been far too squeamish to confront its realities out of a misguided sense of political correctness. Sadly, some of those who have recognised the impact that it has had have further eroded public trust with their failed promises to tackle the issue.
Our failure to stop the small boats is the most obvious focus of people’s anger and frustration. We have rightly made stopping the small boats a key priority, and I commend the Minister for leading the way on that. However, we will be judged not only on that aim but on our promises to reduce net migration. Time, and the patience of the British people, is, sadly, running out.
James Daly (Bury North) (Con)
Thank you very much indeed for calling me to speak, Mr Paisley.
I did not come here to Westminster Hall to talk about figures. I came here to talk about what I believe is the important factor that has dominated the debate on immigration in Parliament for the last 20 to 30 years: the complete ignoring of vast sections of the population by the people who sit in this House.
The people who sit in this House have often refined their attitude to immigration. Mr Paisley, please forgive me for reading this, but in 1774 Edmund Burke, with whom I normally agree, said:
“Your representative owes you not his industry only but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion.”
In that speech, Burke also used a phrase that I think should be a flashing red light for all politicians: “his enlightened conscience”. What we have seen in Parliament for the last 20 to 30 years is people who believe they have enlightened consciences and who have made decisions on the basis of their own ideological views, at the expense of their constituents. I have repeated that point continually, and I cannot be the only MP who feels that way.
When I first became involved in politics in Bury in 2010, as all people do who get involved with political parties I travelled around the north of England. Without a shadow of a doubt, at nearly every single door that I knocked on, immigration was the issue raised. It was not a nuanced debate; it was not, “Let’s talk about how many people use the NHS.” It was essentially, “There are too many people coming into this country and we are extremely concerned about it.” That is going back over a decade.
When I was growing up, immigration was something that could not be discussed. “You can’t mention things to do with immigration or race, because you’re almost certainly racist.” There was a chorus of people only too willing to challenge you on that basis.
This Government face a real decision on where they want to go in terms of representing the opinion of the British people and representing constituents such as mine in Bury, as well as those of my hon. Friend the Member for Blackpool South (Scott Benton) and others. We could decide to take the perfectly intellectually coherent view, which I am sure will be articulated by the Scottish National party and the Labour party, that immigration is a matter of conscience and morality. When morality comes into any debate in this place, I shrink away from it; my morality may well be very different from yours, Mr Paisley, or anybody else’s. Anyone who decides policy on the basis of their own prejudices is to be questioned and thought of as a politician who is not serving their people.
A politician who looks at immigration in the correct way is a politician who takes account not only of the views of their constituents and people in the country but of the practical consequences. My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) has set out the practical consequences. In today’s debate in this Chamber, however, especially by Members of other parties, those two things have been ignored.
I often wonder what the Labour party thinks when it looks at why Brexit happened and why the Conservatives had such a majority in 2019. I can tell the Opposition that it is because, especially in the north of England, Labour politicians for 40 years ignored their own constituents’ views—not only ignored them but considered them to be racist. That is the basis of the Labour party’s downfall and it is what made Brexit happen. It would be a great tragedy if the Government, under the excellent Minister—I genuinely mean that; he is a great man and a great Minister—do not respond to the issue that people trusted us on.
Going back briefly to the issue of Brexit, I often hear in this House from colleagues who fought titanic battles, and talk about regaining our sovereignty. Brexit was about immigration. We can kid ourselves it was about anything else, but in Blackpool and Bury it was about immigration. That is what shifted the votes in their millions. We never hear about it in this place. We talk in nuanced terms that completely exclude voters from the debate, and then we wonder why the voters look at this place like they do.
The people in this place do not represent the views of the people on the issue of immigration. As Burke said back in 1774, they are people who consider themselves to have an enlightened conscience; they ignore the views of their constituents and would prefer to judge policy by their own perceived morality and judgment—and to hell with the consequences for housing, opportunity and skills. Who are the people who are sacrificed because of the ideology that has gone on in this country for 40 to 50 years? It is the poorest. That is the true shame of the policy, and it must change.
Sir Christopher Chope (Christchurch) (Con)
It is a pleasure to serve under your chairmanship, Mr Paisley. It is great to be able to participate in this debate, and I congratulate my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) on introducing it.
I will concentrate on the issue of the population, because that is the core issue we have got to address. In 1990, which is the base date for all our policies relating to net zero and so-called climate change, the population then was about 20% less than it is now. There has been a 20% increase in population since then, yet all our net zero targets are related to absolute figures, rather than to carbon dioxide emissions per head of population. That is a dimension to the debate that I do not think we have sufficiently addressed.
When the Environmental Audit Committee, on which I have the privilege of serving, was asking an environment Minister the other day what is being taken into account in determining the impact of rising population on the ability of the Government to deliver on their net zero targets, there was a big gasp—“Oh, well, there is no briefing on that.” He did not have a clue. All that happened was that the Minister resorted to talking about heat pumps. He seemed to think that that was the answer to the question, which I raised. Yet we know that heat pumps are a subsidiary issue.
The Government keep setting targets for almost everything under the sun. Yesterday, I visited a garden centre and found that the Government are prescribing the amount of peat that we can have in a grow bag. They are prescribing that, but they have no policy whatever on the number of people we think it is right to have in our country.
I visited Hungary with some colleagues a few weeks back. Hungary does have a strong population policy. The Prime Minister there, who recently got re-elected with a two-thirds majority in Parliament, has the support of his people in recognising that one can limit immigration and at the same time grow one’s population and grow one’s economy.
On the point that my right hon. Friend the Member for South Holland and The Deepings made about growth in the economy, I think that is one of the most destructive policies that this Government are adopting. They are talking about GDP growth as being a good thing, but what should really count is GDP growth per person—per capita—and if you look at the figures, Mr Paisley, you will see that, in effect, over the last 10 years GDP per head of population has been static. We have not had that growth, so when people feel that they have not shared in the growth, the answer is no, they have not, because to a large extent the growth is actually being generated just by having more people in the country. The Government can brag about the fact that we have higher growth than Germany, but actually that growth is a mirage in terms of the economy, because it is not growth per head of population; it is the overall growth created by just bringing more people into the country, so this is an overdue but very timely debate.
The contribution that net migration makes to population growth is important, but let us first of all get a policy on our population. We have not had a population policy in this country. Why do not Ministers go off and see what is being done in Hungary, which is addressing this problem in a really constructive way? It is incentivising the home-grown population to grow their families, while at the same time having tight control over migration from outside, and encouraging people to develop their skills instead of allowing employers to take the easy shortcut of bringing in people who are already trained from overseas, thereby denuding those economies of their skillsets. There is a lot to be done, and I do not know whether my right hon. Friend the Minister, in responding to this debate, will be able to promise that we will introduce a population policy. I hope he will.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Mr Paisley. Oh my goodness, where to start with this debate? Well, I will start with my own constituency of Glasgow Central, in which 24.7% of the population were born outside the UK. In the constituency of the right hon. Member for South Holland and The Deepings (Sir John Hayes), who brought forward this debate, 8.9% of the population were born outside the UK; in the constituency of the hon. Member for Blackpool South (Scott Benton), 5.7%; in Bury North, 8.4%; in Christchurch, 5.5%; and in the Minister’s constituency, 5.7% of the population were born outside the UK. Before we get started on any of this, Mr Paisley, let me say that I will not take any criticism from anybody about immigration or attitudes towards it in Scotland, because I am in a far stronger position to talk about these issues than any of them are, given the demographics of my own constituency.
The right hon. Member for South Holland and The Deepings approached the debate by talking about the lack of housing, healthcare capacity and schools. Those infrastructure problems were caused, in huge part, by a lack of investment from the party that has been in government in the UK for the past 13 years. Investment has not kept pace with population growth in this country. The right hon. Gentleman should be addressing those concerns to this Government, because that infrastructure investment has not taken place. That is why there is not enough housing: he and his colleagues stand up and go, “Oh, we don’t want any housing in our constituencies; we don’t want housing in this place, that place or other places,” then they wonder why there are not enough houses. An absolute mystery, I must say, Mr Paisley.
Alison Thewliss
No, I will not. I listened with patience to the right hon. Gentleman’s comments, and he can listen with patience to mine.
The right hon. Gentleman talked about issues with skills and labour. I agree that there needs to be more investment in skills in the population. Again, the Government have cut back on education infrastructure over all these years at the cost of education, so people have not been able to go into it. For example, the UK Government removed nursing bursaries. We kept them in Scotland, and people are going through that system and becoming the nurses who we so need.
The right hon. Gentleman talked about the fact that people here are perhaps not having children. Gosh, is that because there are no nursery places for them because this Government have failed to invest in those places? The lack of childcare is preventing women from having children, and that is a significant problem that this Government have caused—[Interruption.] He did talk about the issue of families here not having children and those demographic challenges. Other Members talked about it too.
Sir John Hayes
On a point of order, Mr Paisley. Hyperbole is one thing; calumnies are another. I did not mention people in this country not having children. I did not mention families. I do not know whether that was an invention or a misunderstanding, but it was one or the other.
Ian Paisley (in the Chair)
Order. That is not a point of order, as you know. Throughout this debate, people have been listened to quietly and all their points have been made. Allow the SNP representative to make her points quietly and with dignity.
Alison Thewliss
Thank you kindly, Mr Paisley. I will accept that the right hon. Gentleman did not make that point about demographics, but one of his colleagues did. Perhaps that is happening because in this country, people have been demonised for having children by the two-child limit, which has reduced family size. It has had an impact on the number of people in poorer demographics having children, because there is no support through the social security system. There is a cost of living crisis—perhaps Government Members have not quite noticed that—which means that families are holding off from having children because they do not feel that they can afford them.
We have talked about housing policy in the UK, and issues with measures chopping and changing, as well as with targets moving and shifting and disappearing. In Scotland, we have built lots of social housing. We have invested in that sector and we have stopped things such as the right to buy, which removed affordable housing from many communities in England.
In Scotland, our issues are about emigration, not immigration. The depopulation of areas such as our islands has been a problem for generations. For that reason, I am sure the hon. Member for Christchurch (Sir Christopher Chope) will be pleased to hear that Scotland has a national action plan and population strategy. We started that because we are losing people, not because we want to close the door and prevent them from coming in. We want devolution of immigration law to allow us to tackle issues such as the depopulation of our island communities and to put further investment into them.
Brexit is the elephant in the room in many ways, but not in the way Government Members seem to think. Brexit has meant a loss of skills. It has meant people feeling unwelcome. It has meant that qualified staff in universities have gone elsewhere because they cannot further their research in the UK. Government Members mentioned graduates. They seem to want to take international students for their fees and then kick them out. That is no way to welcome people or to thank them for choosing to be in this country.
On the issue of students and dependants, in a written parliamentary question I asked the Minister how the Government calculates the amount brought into this country through immigration health surcharges and dependant visas. They could not draw out that number from their immigration figures. There is no evidence to suggest that dependants of students are any kind of burden, because the Government cannot produce that information when asked.
It is a fact that we are more likely to be treated by an immigrant in hospital than find one in the bed next to us. They come here and help out our health service to a ridiculous degree, if indeed they are allowed to work. I have constituents who are waiting for Home Office permission to be allowed to work in the NHS. They would dearly love to be able to be using their skills to help people in Scotland, but are not permitted to do so at a time when health and social work has its highest number of vacancies. In September to November 2022, there were 3.9 vacancies for every 100 employee jobs.
The skills gaps go right across the other sectors in our society. We have huge shortages. We need people to come in and work because there are vacancies, and the vacancy rates significantly impact both the UK’s productivity and its GDP growth, as other Members have mentioned. We are refusing to take those skills—refusing to let people come in, and closing the door on them—and that makes me incredibly sad because that is not what Scotland chooses.
People talked about hearing about immigration on the doorsteps. I go around the doorsteps in my constituency just the same, listening to people’s concerns, and they accept that immigration is important—that people come to Scotland to contribute skills and jobs. People in Pollokshields love the joy of being able to go and buy fresh mangoes and pakora on their doorstep. They welcome all of those things that immigrants bring to enrich our culture, and it makes me incredibly sad that the Conservative Members do not think that immigrants have anything to bring.
I will close with some words from The Proclaimers:
“All through the story the immigrants came
The Gael and the Pict, the Angle and Dane
From Pakistan, England and from the Ukraine
We’re all Scotland’s story and we’re all worth the same
Your Scotland’s story is worth just the same”.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your Chairship, Mr Paisley. I congratulate the right hon. Member for South Holland and The Deepings (Sir John Hayes) on securing this vital debate, and thank all hon. Members for their contributions.
That net migration is currently at its highest level on record is beyond question. Historically, the number averaged around 200,000 per year—of course I am not going back as far as the right hon. Member for South Holland and The Deepings did, but instead looking across recent years—while, of course, the figures this year came out at 606,000. It is therefore entirely fair to ask questions about why the number has grown by so much and whether continued growth at such numbers would be sustainable over time.
Debates on this issue can always be contentious, as I think we have just seen, but I hope that we can all agree on the need to have a well-informed discussion based on facts and evidence and driven by an honest assessment of the trade-offs that lie at the heart of this issue. Unfortunately, though, our national conversation on immigration is too often characterised by oversimplification and false binaries. For example, it is clear that a substantial proportion of the public are concerned about the current level of migration overall, and their worries are entirely legitimate given the amount of pressure on our social infrastructure following 13 years of successive Conservative Governments hollowing out our public services and utterly failing to build enough affordable housing. However, it is equally true that we are confronted by a demographic challenge when we consider that the replacement rate—the ratio of births to deaths—has been below 1:1 for the past 50 years. Meanwhile, the dependency ratio—or the number of working people per retiree—has fallen from roughly 15:1 at the time that Lloyd George introduced the first state pension, over 100 years ago, to around 4:1 by the time that this Government came into office in 2010.
Rather than taking a narrow, blinkered, partisan position that dismisses one of those factors in favour of the other, we should see the immigration question through the prism of competing priorities that must be well managed so that we get the balance right and deliver the best possible outcomes for our country. It is also vital that we avoid the temptation to see immigration policy as something that operates in isolation from other policy challenges. Rebuilding our public services and housing infrastructure after 13 years of Tory neglect will be a top priority for the next Labour Government, and we are clear that doing so will also help to build more cohesive community relations.
The competing priorities that underpin immigration policy are perfectly illustrated by the points-based system for skilled workers. Labour supports the points-based system—indeed, we created it in 2008 for non-EU citizens—but it is clear to us that the way in which this Government are managing the system is simply not working, because Ministers have failed to engage with employers and trade unions such that our economy gets the overseas labour it needs while ensuring that those key stakeholders bring forward workforce plans and skills and training strategies that maximise opportunities for our home-grown talent. As a result, for too long employers have seen immigrant labour as a substitute for investing in local workers.
It is also clear that with 7 million people on the NHS waiting list and more than 2 million people on long-term sick leave, we urgently need a Labour Government so that we can implement our new deal for working people, as set out by the Leader of the Opposition along with the shadow Secretary of State for Health, my hon. Friend the Member for Ilford North (Wes Streeting), and the shadow Secretary of State for Work and Pensions, my right hon. Friend the Member for Leicester South (Jonathan Ashworth).
I turn now to our broken asylum system. It was this Government who gave us new legislation—the Nationality and Borders Act 2022—that we were told would increase the fairness and efficacy of the asylum system, break the business model of the people-smuggling gangs and remove more easily from the UK those with no right to be here. Well, it is almost one year to the day since that legislation came into force, yet here we are again with new legislation and the same old promises from Ministers, as if none of it had ever happened.
Whereas those on the Conservative Benches offer nothing but platitudes and more broken promises, a Labour Government will act decisively to deliver an immigration system that is fair, affordable, sustainable and, above all, fit for purpose. We will reform the points-based system by ending the disparity between wage rates paid to migrant and non-migrant workers in order to prevent undercutting and abuse, and we will engage with employers and trade unions to deliver workforce plans that strike the right balance between inflows and homegrown talent. Equally, if not more importantly, we will deliver a comprehensive workforce plan to upskill our homegrown workforce and equip the next generation with the skills and knowledge to meet the long-term demands of an ever more interconnected global economy, in which specialist knowledge and skills are at a premium.
As I said earlier, public concern about immigration is focused on a range of issues, including both economy-driven immigration and asylum. However, far from stopping the boats, as is so often promised, the Conservatives “bigger backlog” Bill will deliver nothing more than chaos, inefficiency, unfairness and further costs to taxpayers. We need Labour’s five-point plan to stop the dangerous channel crossings by delivering on tasks based on common sense and quiet diplomacy, rather than chasing headlines and the government-by-gimmick that the Immigration Minister is so fond of.
Stephen Kinnock
Under the five-point plan, we will scrap the unworkable, unethical and unaffordable Rwanda plan, and channel the funding into the National Crime Agency. We will triage the backlog so that there is much faster processing of high grant-rate and low grant-rate countries, and reverse the catastrophic decision made in 2013 to downgrade caseworkers and decision makers’ seniority, which led to a collapse in productivity and to poorer decisions being made. We will make the resettlement schemes work—the Afghanistan scheme has completely collapsed, which is frankly shameful, given that we owe a debt of gratitude to people in Afghanistan. We will get a returns deal with the European Union, which we know has to be based on having safe and controlled legal pathways, and we will get our aid programme working so that we are focused particularly on countries that are generating a large number of refugees rather than plundering the aid budget, which is being used to fund hotels in this country.
Ian Paisley (in the Chair)
Order. I thank the hon. Member for his comments. I have to call the Minister at this point. Minister, you have about 11 minutes.
The Minister for Immigration (Robert Jenrick)
Thank you, Mr Paisley. I thank my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) for securing the debate and for his kind words—flattery, of course, will get you everywhere.
There are few more important decisions for this Parliament to make than who gets to come to our country, which is why the debate is so critical. My right hon. Friend is right to say that, over the decades, immigration has generally occurred in this country in an ad hoc manner, without the careful thought and planning that it warrants. Sometimes it has been successful, and sometimes less so, but it has rarely been planned in the way that it should be. As has been said, the levels of immigration that we are currently seeing, and have seen for most of my adult lifetime, are significantly higher than throughout the history of this country. The level of net migration that we have seen in the past 25 years is not normal by historical standards, and it is right that we consider the consequences of that and whether we should take action to change it.
My right hon. Friend said that Lord Hodgson of Astley Abbotts proposed to create an organisation to consider more deeply the demographic changes that the country is experiencing. In fact, I met Lord Hodgson to discuss just that. I know him well, having grown up not far from Astley Abbotts, where his mother created the most northerly lavender farm in Europe in her 80s—that is by the by. His proposal is very important and worthy of consideration. The issue is something that the Migration Advisory Committee could play a greater part in considering when it advises the Government on changes to our immigration system, but, if not, I think there is a good argument for having a separate organisation. I committed to Lord Hodgson to give further thought to the topic.
My right hon. Friend and a number of others raised the profound consequences that large quantities of migration have on the population of this country as regards housing, access to public services and integration, cohesion and unity. We should consider each of those points very seriously. I have paid particular interest to housing throughout my time as a Minister. It is undoubtedly true that if 600,000 additional people come to this country every year, that has profound consequences for house prices and, in particular, for the poorest in society, who want either to get on to the housing ladder or to access social housing. We have to take that seriously.
I made a speech recently at Policy Exchange about the impact of illegal migration. Although that is a different subject, many of the same arguments apply. We have to make sure we are representing our constituents’ true opinions correctly, as my right hon. Friend said, and we must be cognisant of the consequences, including the pressure on public services, housing and integration.
Secondly, my right hon. Friend argued—again, the Government would agree—that companies should not reach in the first instance for the easy lever of foreign labour. That is not the route to productivity enhancement and prosperity. If it was, this country would be even more prosperous than it is today, given the large amounts of legal migration that we have seen in the past 25 years. We have to encourage companies to embrace technology and automation, train their staff and invest in their skills.
The Government are doing that in a number of ways through our skills reforms, such as those for apprenticeships. My right hon. Friend started that process when he was the apprentices Minister many years ago. The Secretary of State for Work and Pensions has made it one of the central missions of his tenure to ensure we get more of the economically inactive in our country back into the workplace, and to ensure businesses support them in the first instance rather than reach for those overseas.
The Government’s most crucial reform in this Parliament was taking back control. It is as a result of leaving the European Union that, for the first time in my lifetime, Governments of this country can control the levers that dictate the numbers of people coming into our country. That is an absolutely essential change. It is now in our hands, but there has been a lazy assumption that control alone was sufficient and that people were not concerned about numbers. I disagree with that, and the Government do too. We believe that net migration is far too high, and we need to take action to bring it down over the medium term.
It is correct that, as others have said, the levels of net migration we have seen in the past two years have included some exceptional factors. The kaleidoscope was shaken as a result of covid, and we have subsequently seen very large numbers of people return to the UK, such as students. We have made important commitments, such as creating the Ukraine, Hong Kong and Afghanistan schemes—all of which we should be proud of and which should command high levels of public support. In fact, the UK, contrary to the view we sometimes hear expressed on the left, is one of the world’s leading countries for humanitarian protection schemes. Since 2015, under a Conservative Government, we have enabled half a million people to come into this country for humanitarian purposes. But we need to do more.
We have recently taken a significant step, which my right hon. Friend the Member for South Holland and The Deepings mentioned, to ensure that dependants of students cannot come with a student unless they are coming for longer research degrees, such as PhDs. That will make a tangible difference to numbers in the years ahead. Most importantly, it reaffirms the principle that universities should be in the education business, not the migration business. No one should be coming to this country to study merely as a back door to a life in the UK. They are entirely separate things.
If there are further steps we need to take, we can and should do so. My right hon. Friend raised a number of important points to which I will give further consideration. He knows that I have sympathy about the salary threshold. There is a question as to whether the immigration health surcharge is at a fair place or whether there is more that can be done. There is also a question about whether family visas and such are being issued appropriately. Those are all things that the Home Office keeps under review. If we need to take further action there, we obviously will do.
I am conscious that my right hon. Friend is keen to speak at the end of the debate, so I will—
Robert Jenrick
I only have a few seconds. I don’t want to deprive my right hon. Friend the Member for South Holland and The Deepings—
Sir Christopher Chope
Can the Minister set out what the Government believe the right target is for the population of this country?
Robert Jenrick
That is a big question to answer in 30 seconds. What we have said is that we remain true to our manifesto commitment that we will seek to bring down net migration in the medium term. My hon. Friend can see from the first step that the Home Secretary and I have made on student dependants the seriousness with which we take this challenge. I hope I have said in my remarks that I am very alive to the issue. I take seriously the profound consequences of net migration on community cohesion and access to public services and housing. If there are further things we can do, such as some of the ideas raised by Conservative Members today, the Home Secretary and I will do everything we can to implement them.
Sir John Hayes
Huge, vast population growth may be seen by out-of-touch bourgeois liberals as a quick fix for our economy, but what the vast majority of the public know is that it fuels a dependence on low-skilled labour, stultifying our economy over time. The ease of employing workers from overseas displaces investment in domestic skills, including the upskilling of the existing workforce, automation, better working practices and fair pay. The consequence is to inhibit productivity and damage British competitiveness.
More than that, it changes the places we call home beyond recognition. Unless the Government act quickly and decisively, we face the grim future of a weakened, uncompetitive economy and a fragmented disparate society robbed of any sense of shared belonging. The bulk of the public, regardless of their origins, know this. The Minister, gauged by his articulation of his excellent case today, clearly knows it. We know that the Home Secretary understands this too. It is time the whole of Government took back control.
Question put and agreed to.
Resolved,
That this House has considered the impact of immigration on population growth.
Written Statements
(10 months, 2 weeks ago)
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Wilton Park Review
(10 months, 2 weeks ago)
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The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
I am announcing today a review of Wilton Park, an executive agency of the Foreign, Commonwealth and Development Office (FCDO).
Wilton Park has convened discreet dialogues on the UK’s strategic priorities since 1946. It brings together global experts, policy makers and decision takers from a wide range of sectors to solve complex global issues.
This review is part of the public bodies review programme which delivers against the commitments made in the declaration on government reform to increase the effectiveness of public bodies and departmental sponsorship. In 2022, all Departments were asked to prioritise their arm’s length bodies for review and the then Foreign Secretary decided Wilton Park, which had last been reviewed in 2018, should undergo one before the end of 2023-24. This timing would allow the review to consider the impacts of the pandemic and some internal structural changes.
This review will follow the Cabinet Office guidance on the undertaking of reviews of public bodies and the terms of reference for the review will be published on gov.uk. It will consider whether and how Wilton Park’s mandate could be delivered more effectively and efficiently. It will provide robust recommendations to provide assurance that Wilton Park has a clear future strategy that meets FCDO and HMG needs.
In conducting this review, officials will engage with a broad range of stakeholders including staff, management and the board of Wilton Park, the FCDO, cross-Whitehall Departments, the all-party parliamentary group on Wilton Park and participants in Wilton Park activities.
I shall inform the House of the outcome of the review when it is completed.
[HCWS884]
Learning Disability and Autism
(10 months, 2 weeks ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
Today I am delighted to announce the launch of the consultation on the draft Oliver McGowan code of practice (the code) on statutory learning disability and autism training. The launch of this consultation represents a significant moment in the journey towards improved care and treatment of people with a learning disability and autistic people. I welcome anyone with an interest to complete the consultation and share their views on the draft code. An easy read version of the draft code and consultation will be made available as soon as they are ready.
The purpose of the code is to ensure that service providers registered with the Care Quality Commission (CQC) have the necessary guidance to meet the new legal requirement introduced in the Health and Care Act 2022. The effect of the new requirement is that, from 1 July 2022, CQC-registered providers are required to ensure their staff receive training on learning disability and autism, appropriate to their role. To aid those who need to comply with the new training requirement the Secretary of State is obliged by the 2022 Act to issue a code of practice setting out what we consider is required in order for them to comply. Therefore, this draft code sets out the standards this training must meet to comply with the legislation and guidance on what I believe providers need to do to meet those standards.
As set out in the draft code, the Oliver McGowan Mandatory Training on Learning Disability and Autism is the Government’s preferred and recommended package to support CQC-registered providers to meet the new requirement introduced by the Health and Care Act 2022. The training is named after Oliver McGowan, a young autistic teenager with a mild learning disability, who sadly died after having a severe reaction to medication given to him against his and his family’s strong wishes. Oliver’s parents, Paula and Tom McGowan, have campaigned for better training for health and care staff to improve understanding of the needs of people with a learning disability or autistic people. The training was trialled in England during 2021 with over 8,000 people and is helping to ensure that staff are equipped with the right skills to care for people with a learning disability and autistic people.
In my role as Under-Secretary of State at the Department of Health and Social Care, I have heard experiences of the poor care and treatment received by people with a learning disability and autistic people, which has highlighted the importance of introducing this legal requirement and the development and publication of the code.
I look forward to receiving responses to this consultation to help us to develop a code that supports health and care staff to provide high-quality care for people with a learning disability and autistic people which complies with the legislative requirements. Too often people with a learning disability and autistic people experience poorer health outcomes and higher mortality than the general population. We are confident that these disparities can be reduced when health and care staff are equipped with the right skills and knowledge. The draft code therefore represents a crucial step in the right direction.
[HCWS885]
National Institute for Health and Care Research Capital Call
(10 months, 2 weeks ago)
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The Secretary of State for Health and Social Care (Steve Barclay)
Today I am pleased to announce just over £96 million of funding from the National Institute for Health and Care Research (NIHR) for equipment and technology to support NHS organisations to deliver high-quality research to improve the prevention, management and treatment of disease for patient benefit.
This large-scale investment right across the length and breadth of England will support over 90 NHS organisations, including less research-active trusts, to grow research capacity and take research to populations outside of the major teaching hospitals. I want everyone, regardless of where they live, to be able to access the latest innovations in the health and care system through research.
The majority (55%) of funding will go to NHS organisations outside of the greater south-east aligned to the Government’s levelling up commitment. It includes equipment for primary care research expansion in integrated care systems across the east midlands; and mobile research units across seven regions in England, from North Tees and Hartlepool in the north-east to Somerset in south-west, to take research to underserved regions and communities with major health needs, including rural areas.
There is also funding for cutting-edge equipment and technology such as a mobile CT scanner for the north-west coast region to support respiratory, lung cancer diagnostic and cardiology research studies; and state-of-the art equipment in Exeter to transform genomic and transcriptomic sequencing for research into dementia, infectious diseases, cancer and precision medicine. This will enable research that can drive future innovation in the health and care system and allow the UK to remain as one of the most attractive places in the world for innovative commercial companies to invest in research.
I intend to build on this substantial Government investment with a series of further capital calls through the NIHR. The emphasis in future rounds will be on extending the reach of research into our communities, including a focus on reaching those in rural areas, to improve access to clinical research for all. We particularly want to ensure that people outside of major population centres in rural and coastal areas are enabled to take part in clinical research by using innovative ways of designing and delivering our research, fit for the future. Ensuring our world-leading researchers have the right equipment, in the right place, is key to delivering the best, most innovative health and care for our population.
[HCWS886]
House of Lords
E-scooters and E-bikes: Battery Fires
(10 months, 2 weeks ago)
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Lord Foster of Bath
To ask His Majesty’s Government what plans they have, if any, to address the number of fires caused by lithium-ion batteries in e-scooters and e-bikes.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)
My Lords, the Government are committed to ensuring that consumers are protected from unsafe goods through our product safety framework. We are undertaking a programme of activities on the fire risks associated with lithium-ion batteries for e-scooters and e-bikes. These include establishing a safety study to understand evidence for enforcement and public safety information; carrying out research to inform future regulatory activity and guidance on safety and standards; and working with fire and rescue services, among others, on safety messaging.
Lord Foster of Bath (LD)
I thank the Minister for his reply, but I believe more urgent action is needed. After all, fires caused by lithium-ion batteries in e-scooters and e-bikes have quadrupled in number since 2020, costing millions of pounds and resulting in eight deaths and 190 injuries. Landfill sites are also experiencing a huge surge in lithium-ion battery fires, yet unsafe batteries and chargers are still being sold and there is no effective campaign to ensure safe recharging or disposal. So, with headlines such as, “Why do e-scooters and e-bikes keep exploding?”, fire services, councils, insurance companies and safety campaigners, including Electrical Safety First, are calling for more urgent action. Will the Minister agree to a meeting to discuss industry-developed solutions so that action can now be taken quickly?
Lord Offord of Garvel (Con)
I thank the noble Lord for that follow-up question. I assure all noble Lords that officials in three government departments are collaborating to address the issue of fires associated with e-scooters and e-bikes—specifically, the Office for Product Safety and Standards inside my own department, the Department for Business and Trade; the Home Office, which is interacting with fire services; and the Department for Transport, through the Office for Zero Emission Vehicles. Officials are proactively seeking the input and expertise of stakeholders from fire and rescue services, the National Fire Chiefs Council and London Fire Brigade, including their scientific advisers. Indeed, on 13 June, the Home Office hosted a meeting of senior officials from the relevant departments, London Fire Brigade and the National Fire Chiefs Council to further discuss the issues and the work which is under way.
Lord Cormack (Con)
My Lords, is there not a very simple answer to these wretched e-bikes and e-scooters: to ban them? That would solve at least part of my noble friend’s problem.
Lord Offord of Garvel (Con)
I thank my noble friend for that welcome intervention. You might argue that this is the response of the consumer to messages about climate change—that the consumer is embracing the concept. Not only are they a cheaper mode of transport but they are much better for the planet. It is actually illegal to use an e-scooter on a public road and in spaces set aside for pedestrians, cyclists and horse riders—including pavements and cycle lanes—unless it is under licence. There are licences at the moment to allow trials to take place in 32 local authorities, in order to collect information to allow the DfT to work out how to proceed with this mode of transport.
Lord Rogan (UUP)
My Lords, unlike in England and Wales, e-scooters are illegal on the roads in Northern Ireland, but that has not stopped their use, with an e-scooter rider left in a critical condition last month after colliding with a car in east Belfast. Furthermore, just last weekend, the Northern Ireland Fire and Rescue Service issued a warning after attending a spate of e-scooter fires caused by lithium-ion batteries. In the continuing absence of an Executive at Stormont, can I ask the Minister for an assurance that any future legislation brought forward by His Majesty’s Government relating to Northern Ireland does not include the legalisation of e-scooters?
Lord Offord of Garvel (Con)
I thank the noble Lord for his question on that specific matter in relation to one part of the United Kingdom, but this is not a UK-central issue: it is an international issue. New York is considering the whole gamut of proposals; its fire department has implemented a range of activities, which our Office for Product Safety is looking at. The U.S. Consumer Product Safety Commission has announced that it will hold a forum on 27 July to look at lithium-ion batteries and e-bikes after an increasing number of fires and fatalities. The Australian Competition and Consumer Commission has outlined lithium-ion batteries as one of its product safety priorities, while Barcelona has imposed a six-month ban on e-scooters on public transport and Paris has banned rental e-scooters. We are not alone in considering how to deal with this modern technology.
Baroness McIntosh of Pickering (Con)
My Lords, can my noble friend the Minister tell us how many e-scooters are in legal circulation? Private e-scooters are to be driven only on private land, including car parks and private property; rented scooters are the ones that he referred to under pilot schemes. How many will go on to become permanently rented, lawfully and with a licence? Will licences soon be issued for privately owned e-scooters as well?
Lord Offord of Garvel (Con)
I thank my noble friend. I do not have the precise number so I will write to her. She is absolutely right: it is currently illegal to use an e-scooter on a public road. It is legal to use an e-scooter on private land with the permission of the landowner. Any person using an e-scooter on a public road is breaching the law and committing a criminal offence so can be prosecuted. The Government are providing e-scooter trials in 32 local authorities, as I said. These trials are taking place and will continue until the end of May 2024. Transport for London has banned the carriage of e-scooters and e-unicycles on its premises and services, so this is being regulated heavily. In the meantime, the trials continue.
Lord Winston (Lab)
My Lords, can the Minister kindly tell the House what methods other than lithium are being researched and how much the Government are spending on researching alternatives to lithium in batteries?
Lord Offord of Garvel (Con)
That goes back to my department, the Department for Business and Trade, where the Office for Product Safety and Standards has established a safety study precisely to understand the data on and evidence of risks in the sector, as well as the alternatives; this will inform enforcement action. Specifically, the noble Lord will be pleased to know that a project is going on at the Warwick Manufacturing Group, which is part of the University of Warwick, in which intense conditions are being created to examine further the science and technology around this issue and the safety of lithium-ion batteries in personal light electric vehicles. Where the Office for Product Safety and Standards receives a notification that these products present a serious risk or need to be recalled, such notifications will be promoted on the product recalls and alerts websites, on social media and via stakeholders. I do not have a precise number on the amount for research, but I will write to the noble Lord with that figure.
Baroness Bull (CB)
My Lords, in reviewing the success of the trial periods, will the Government consider parking, particularly of these dockless vehicles, and the impact on people with impaired vision and disabilities when such vehicles are left on pavements?
Lord Offord of Garvel (Con)
Yes. I am sure that that will be included in the review.
Baroness Blake of Leeds (Lab)
My Lords, the fire risks associated with lithium-ion batteries go beyond their use in e-bikes and e-scooters, adding to their wide-ranging risk in residential environments. Fire incidents caused by such batteries can also have severe environmental consequences due to the hazardous materials involved. Do the Government have any plans to work with manufacturers and recycling organisations to develop effective recycling and disposal methods for these batteries, ensuring that they are handled responsibly and minimising their impact on the environment?
Lord Offord of Garvel (Con)
I thank the noble Baroness and say absolutely yes on all counts. This is all part of the ongoing review. The work being done with the fire service is collecting information to find out how much of the risk is caused by the batteries versus the way they are used by the consumer in the household and whether they are being charged in the right way and in the right place. The consultation is ongoing and the results are imminent. We are fully cognisant of those risks.
Baroness Randerson (LD)
My Lords, fires are one problem, but poor design of e-scooters means a low centre of gravity, ensuring that a lot of people who have accidents have head injuries. The Minister talks about studies and plans. The trials have been going on for years. Can he give us a date when the Government will actually do something about this problem?
Lord Offord of Garvel (Con)
The consultation has started and will be published imminently. The findings will be made available. Generally, it is not the Government’s position to ban all dangerous items. Some modes of transport are more dangerous than others, but you choose your own mode of transport. Certainly, when it comes to affecting the public and increasing danger, that is exactly why the law prohibits these vehicles other than in a legal trial. With three departments working on this, I can safely say that the Government are alive to these issues.
Lord Harris of Haringey (Lab)
My Lords, the Minister will recognise that lithium-ion batteries are used in a variety of products and not just e-scooters. What steps are the UK Government taking to ensure that we have sufficient supplies of lithium-ion, and are those supply chains from sources that do not involve modern slavery?
Lord Offord of Garvel (Con)
That is a very far-reaching question. I will be delighted to write to the noble Lord on it.
Asylum: Channel Crossings
(10 months, 2 weeks ago)
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Lord Dubs
To ask His Majesty’s Government how many people since January have (1) crossed the Channel irregularly by boat, and (2) claimed asylum having done so; and how many of these asylum claims are awaiting a decision.
The Parliamentary Under-Secretary of State for Migration and Borders (Lord Murray of Blidworth) (Con)
An overall total of 11,279 people have arrived in the United Kingdom by small boat since January of this year to today’s date. From 1 March to 31 March, 3,362 asylum claims were raised from small boat arrivals, of which 3,306 are awaiting initial decision. The number of asylum claims made from arrivals from 1 April 2023 will be detailed in the next quarterly publication of statistics.
Lord Dubs (Lab)
Can the Minister tell us how many of these people in the various categories were unaccompanied children? Is there any reason why unaccompanied children are barely mentioned in the impact assessment?
Lord Murray of Blidworth (Con)
I will need to write to the noble Lord regarding the precise number of unaccompanied children in those statistics. We will be discussing the impact assessment in due course—to coin a phrase.
Lord Newby (LD)
My Lords, some time ago, the Government pledged to eliminate the backlog of asylum claims by the end of this year. How is that going, and how confident is the Minister of that target being met?
Lord Murray of Blidworth (Con)
On 31 December, the Prime Minister pledged to clear the backlog of 92,601 initial asylum claims; that relates to asylum claims made before 28 June 2022. One way this will be achieved is via the streamlined asylum process, which is centred around accelerating the processing of manifestly well-founded asylum claims. From 23 February, legacy claims from nationals of Afghanistan, Eritrea, Libya, Syria and Yemen will normally be considered through the streamlined asylum process. That means that a positive decision can be taken on the information available, and the claimant will not be substantively interviewed. I reassure the noble Lord that this work has progressed in terms of the recruitment of further caseworkers, and we hope to have 2,500 further case- workers in place by September.
Baroness Gohir (CB)
My Lords, of the numbers crossing the channel, how many are women and how many are pregnant women? I asked this question in writing during the debates on the Illegal Migration Bill; I got a response, but no clarity on numbers. Could they be shared today?
Lord Murray of Blidworth (Con)
Clearly, I can provide a breakdown of those numbers, probably during tomorrow’s debate. As far as I am aware, there were no pregnant women.
Lord Hamilton of Epsom (Con)
My Lords, further to the question about children from the noble Lord, Lord Dubs, does my noble friend have any evidence that human rights lawyers are telling people who come here illegally on boats across the channel to say that they are children, when they are clearly not?
Lord Murray of Blidworth (Con)
My noble friend is right that intelligence exists suggesting that people smugglers give information to those they smuggle. I am aware that allegations have been made against lawyers, but I would not like to say any more at this stage.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I first thank the noble Lord for facilitating my visit to RAF Manston and to Western Jet Foil a few weeks ago. During that trip, I was made aware of a cohort of youths who initially identify as adults because they want to work. Indeed, they may have been working in their home country since they were 13 or 14. Does the Home Office keep any record of whether this group is more likely to go missing or abscond, so that they can perhaps be identified earlier in the process, before they go missing?
Lord Murray of Blidworth (Con)
I thank the noble Lord for that question, which is clearly important and I will find out the answer. I know that the noble Baroness, Lady Chakrabarti, has a Question about missing asylum-seeking children in the next fortnight, so I will report back to the House then and will of course write to the noble Lord.
Lord Singh of Wimbledon (CB)
My Lords, refugees escaping the horrors of war and arriving in the UK in small boats last year constituted less than 5% of the annual number of immigrants. Can the Minister explain why, despite Christian teachings—with which we begin proceedings in this House—requiring that they be treated with care and compassion, the Government are making their harassment and deportation, at £170,000 a head, a national priority?
Lord Murray of Blidworth (Con)
The noble Lord will not be surprised to learn that I disagree with him. The purpose of the Illegal Migration Bill is to deter dangerous crossings of the channel and other methods of illegal entry. This is an entirely responsible and appropriate policy step.
Baroness Lister of Burtersett (Lab)
My Lords, following the question from my noble friend Lord Dubs, can the Minister explain why we still do not have a child rights impact assessment, so that we can assess the Government’s argument that the Bill is in the best interests of children? All organisations, including children’s commissioner, believe that it is not.
Lord Murray of Blidworth (Con)
I am afraid that I cannot provide the noble Baroness with an update on the child rights impact assessment, but I am sure that it will be provided.
Baroness Jones of Moulsecoomb (GP)
My Lords, I cannot understand why the Government are dead set on spending huge amounts of money on sending asylum seekers to Rwanda. In fact, we would be much better off if we let them work here, as most of them want to do. Have the Government thought about that at all—about making them taxpayers?
Lord Murray of Blidworth (Con)
As I have said many times in this House while the noble Baroness has been present, the reason why asylum seekers are not initially allowed to work is in order to prevent a very large pull factor encouraging illegal migration.
Lord Reid of Cardowan (Lab)
Can the Minister please give us the total figure of the number of asylum claims that have not been concluded? He gave a figure of 92,500, which, presumably, is the number of cases that have not been started. However, there may be many that have been started—a file has been opened—and which are excluded from that 92,500. Can the Minister give us the total number of asylum claims that have not been finished or started?
Lord Murray of Blidworth (Con)
Of course, I do not have those statistics to hand but they are available on the GOV.UK website. The latest statistics release, covering 1 January 2023 to 31 March 2023, shows that during that period 3,793 people arrived in the UK having crossed the channel by small boat. The next quarter of statistics is due to be published on 24 August 2023. As the noble Lord is aware, the Home Office needs to ensure that information intended for publication meets the standards and requirements set for departmental publications.
Lord Empey (UUP)
Can the Minister explain how this wretched illegal trade is allowed to be conducted in broad daylight from the shores of northern France? What would the situation be if the boats were going in the opposite direction? Would we allow the south coast to be used as a trading post for this illegal trade?
Lord Murray of Blidworth (Con)
I thank the noble Lord. The answer is clearly that we would not, and I agree with the sentiment of his question.
Lord Hannay of Chiswick (CB)
I thank the Minister for the letter he has put in the Library of the House recording that the UN Committee on the Rights of the Child has adopted a formal report saying that the Bill before the House, which we will discuss tomorrow, requires amendment if we are not to breach our international obligations. Will he bring us the good tidings that we are going to do something about that?
Lord Murray of Blidworth (Con)
Tempting though it is to take up the noble Lord’s invitation to predict what might happen tomorrow, I will not go down that avenue. If I may, I will answer the earlier question of the noble Lord, Lord Dubs. Some 12% of arrivals claim to be unaccompanied asylum-seeking children—of course, those are claims and are not confirmed—and 13% of arrivals are female, whereas 87% are male.
Baroness Symons of Vernham Dean (Lab)
My Lords, the Minister has been unable to answer several questions raised today in this exchange. We have a debate tomorrow. Can he guarantee that he will look this evening at the questions he has been unable to answer and give perhaps a better account of what is going on? He has his officials in the box—many of us have been in that box before—and I hope he will look at what he has been unable to answer and be able to give a full account in the debate tomorrow.
Lord Murray of Blidworth (Con)
The noble Baroness will have noticed that I actually provided answers in response to those questions a moment ago. I am afraid I resent the tone of her question. I will of course have at my fingertips relevant information for tomorrow’s debate.
Deafblindness: Emerging Technologies
(10 months, 2 weeks ago)
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Baroness Kennedy of Cradley
To ask His Majesty’s Government what assessment they have made of the possibilities of emerging technologies to create new opportunities for people who are deafblind.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
The Government are continually reviewing and assessing the possibilities afforded by new and emerging technologies, particularly to support disabled people or anyone with specific access requirements. We believe we can achieve this by promoting bold discoveries, growing the economy, and being at the cutting edge of assistive and accessible technology—ATech. Our ambition is to make the UK the most accessible place in the world to live and work with technology.
Baroness Kennedy of Cradley (Non-Afl)
My Lords, today is Helen Keller’s birthday. Born in 1880, she was both deaf and blind, and was one of the most well-known deafblind people in history, as she campaigned tirelessly. That is why this week, the week of her birthday, is when Deafblind Awareness Week takes place.
I thank the Minister for his reply. There are more than 450,000 deafblind people in the UK, and Sense predicts that, by 2030, that number will increase to more than 600,000. Will the Government commit to increasing their work with major technology companies such as Google, which is actively co-creating assistive technology with and for people with complex disabilities? In particular, will the Government support those people with complex disabilities who are looking for work with the equipment that they need by the introduction of a fund to ensure that adequate assistive technology is available in all jobcentres?
Viscount Camrose (Con)
I thank the noble Baroness for raising her Question this week, which is, of course, Deafblind Awareness Week. I take this opportunity to pass my very best wishes to those who suffer from the affliction and those who work with them.
The Government are working with providers of technology of all different sizes in this space. The noble Baroness referred to Google’s new centre for technology for disabled people, which highlights its recognition that the UK is the right place for it to operate in this market. I could point to a number of fascinating new innovations by smaller organisations, but I will restrict myself to just one: BrightSign has created a life-changing AI-based smart glove, giving voice to the voiceless by enabling sign language users to communicate without an interpreter.
Lord Clement-Jones (LD)
My Lords, the Minister rightly identified that there are many excellent technologies using smartphones and tablets that are designed to help those who are deafblind achieve greater independence. I too congratulate the noble Baroness, Lady Kennedy, on raising this Question during Deafblind Awareness Week. What co-ordination role does the new department, DSIT, have in this respect—there are many departments, and a couple have been mentioned already—and what resources does it have to help with training and information on these vital technologies?
Viscount Camrose (Con)
As the noble Lord rightly points out, identifying the appropriate technologies by scanning the horizon for those that will be of most impact and use is, and must be, a cross-governmental matter. I take every opportunity to urge my fellow Ministers to fight the good fight in this respect. DSIT’s role is as the provider and exemplar of technology use to all of government and the public sector, and indeed all of the UK, but all government departments recognise their responsibility to continuously identify ways to use technology and to make technology in the United Kingdom as accessible as it can possibly be.
Lord Wigley (PC)
My Lords, I support the points that the noble Baroness made and note the staggering figure of 450,000. Would it be possible for the Minister to extend the review to include work undertaken at universities? There may well be scope for co-ordinating that work to help not only them and deafblind people but those in the commercial sector who are looking for new ideas.
Viscount Camrose (Con)
DSIT works extensively across universities on this and other programmes. In addition, the Government commission a range of research, particularly in the area of deafblindness, not least, for instance, into the procurement of hearing aids by the NHS.
Lord Bassam of Brighton (Lab)
My Lords, we on our Benches very much welcome the research and development that is taking place, and the pretty unprecedented pace at which new technologies become available. However, this poses a challenge, not just for government departments, charities and individuals but for wider society. To pursue the points raised by the noble Lord, Lord Clement-Jones, I would like to pin the Minister down a bit more on what he sees as his department’s role, and that of the Department of Health and Social Care, in accrediting and procuring these emerging technologies. He seems to suggest that departments should just get on and do it themselves, without any plan or strategy. That cannot be right.
Viscount Camrose (Con)
I thank the noble Lord for that question. I certainly hope my remarks did not come across as me asking other ministries to merely improvise in this space. DSIT can contribute in three very important ways under the structure of the science and technology framework, the ambition of which is to make us a science and tech superpower by 2030. We can make three distinction contributions: first, by growing the economy overall through the use of science and technology; secondly, by driving innovation in all areas; and, thirdly, and most pertinently to this Question, by ensuring that the technology developed in this space is always as inclusive and accessible as it can possibly be.
Lord Borwick (Con)
My Lords, I declare my interest as a trustee of the Ewing Foundation for deaf children. Does my noble friend the Minister agree that the progress of most children with sensory disabilities has been excellent, mainly due to dedicated teachers and modern electronics, such as cochlear implants, hearing aids and sound fields? However, these have to be maintained. Would it be a good idea for schools regularly to test their electronic equipment provided for the pupils to make sure it is working?
Viscount Camrose (Con)
I thank my noble friend for the question and pay tribute to his ongoing work in this space. Supporting deaf children through the use of audiological equipment involves a range of government agencies, including the NHS, schools and local authorities’ social care teams. If a child is deaf, NHS audiology services work with multidisciplinary teams, which include teachers for the deaf, paediatricians, speech and language therapists, and cochlear implant teams, as well as the parents and guardians, and between them they agree individual management plans. Children who use audiological equipment based on this plan should of course be offered regular appointments with their audiology team to check their hearing and ears and to ensure that their audiological equipment is working and adjusted as necessary.
Lord Patel (CB)
My Lords, the Minister is right in recognising that smaller companies are developing technologies for the deafblind, without using the internet, combining spectacles and hearing aids. The important point is that, when these technologies reach maturity, they are available to people who are deafblind. Digital technologies for the deaf, for instance, are currently not available on the NHS and are quite expensive on the private market. We must make sure they are available on the NHS when these technologies mature.
Viscount Camrose (Con)
I suppose the structural problem overall is that those who find themselves disabled, with whatever disability, are in a very small group, and the smaller the group, the more difficult it is for manufacturers of equipment to provide for them in a commercially viable way. The Government have a number of levers they can pull in this space: first, by commissioning research directly; secondly, by the public sector procurement programme—we spend on average £1.5 billion every year on procuring ATech; and, finally, by working with partner organisations, such as UKRI and Innovate UK, to seed and fund emerging technology in the ATech space.
Lord Foulkes of Cumnock (Lab Co-op)
Is the Minister aware that the excellent “Strictly Come Dancing” winner, Rose Ayling-Ellis, who is herself deaf, has proposed that BSL lessons be given to everyone freely? What is the Government’s response?
Viscount Camrose (Con)
I very much enjoyed the interview on the radio today to which the noble Lord refers. The British Sign Language Advisory Board has been established to help advise the Government on the implementation of the British Sign Language Act 2022, which legally recognises BSL as a language of England, Wales and Scotland. It is important to note here that the BSL board has a reserved place for a deafblind person, and an additional member of the board is deaf- blind. We look forward to receiving and acting on its advice in this space.
Animal Torture: Online Videos
(10 months, 2 weeks ago)
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Baroness Hayman of Ullock
To ask His Majesty’s Government what assessment they have made of (1) the availability of animal torture videos on the internet, and (2) whether existing legislation is sufficient to punish people in the United Kingdom who are involved in the creation or promotion of such content.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
We are aware of the prevalence of appalling animal cruelty videos online and take this issue very seriously. The Animal Welfare Act 2006 is commonly used to tackle domestic animal cruelty and it is an offence under the Communications Act 2003, which can be used to address offensive material being circulated online, be it from the UK or not.
Baroness Hayman of Ullock (Lab)
My Lords, the recent reports about the global network to encourage and film the torture of baby monkeys for profit were harrowing. Internet users wanted to see animals hurt with pliers and hammers and set on fire, and then they were paying to watch the results. My noble friend Lord Stevenson’s amendment to the Online Safety Bill sought to add such severe animal cruelty to the list of priority offences, but it was rejected by the Government. I have read the Hansard, and it seems to me it was rejected because it was too difficult. Does the Minister agree that if an offence is illegal offline, it should be illegal online? If the Government are not prepared to include this in that Bill, will he commit to work with Defra to bring in the necessary animal welfare legislation?
Viscount Camrose (Con)
The debate on this matter in Committee on the Online Safety Bill was well attended and certainly well received. The purpose of the Online Safety Bill is to intervene between the platforms on which the distressing images are published and the users who see those platforms. It is, first, for human beings and, secondly, for their experiences online. The appalling instances that the noble Baroness referenced, particularly in the BBC documentary, would themselves be covered by either the Animal Welfare Act or the Communications Act, both of which make those criminal offences without the need for recourse to the Online Safety Bill.
Lord Clement-Jones (LD)
My Lords, these offences are bad enough by themselves, but does the Minister accept that there is a direct connection between animal cruelty and violence towards humans? If so, is this not yet another reason why the Government should use the Online Safety Bill to combat animal cruelty offences and make this a priority offence under the Bill?
Viscount Camrose (Con)
I join the whole House in absolutely deploring these behaviours. The concern about adding animal cruelty offences to the Online Safety Bill is that it is a Bill built around the experiences online of human beings. To rearchitect the Bill around actions perpetrated or commissioned on animals runs the risk of diminishing the effectiveness of the Bill.
Lord Trees (CB)
My Lords, needless to say, the behaviour referred to in this Question shows indescribable cruelty to animals. It is extremely concerning that anybody should do these things or, indeed, want to view them. It urgently emphasises the need for better regulation of the internet to reduce the danger of copying behaviour. Is the Minister aware—I fear that the noble Lord has just made him aware—of the increasing evidence that malicious cruelty to animals is a precursor, and can lead, to violent and abusive behaviour towards humans? Is this not another indication, were it needed, of why we need to better regulate the internet with regard to cruelty to animals?
Viscount Camrose (Con)
I recognise the argument that increased cruelty to animals promotes further bad behaviour, including violence between humans, but I stress the point that the purpose of the Online Safety Bill is to bring into law a range of limitations on what can be published and what can be seen online by human beings. There are laws that effectively criminalise cruel behaviour to animals and the action of publishing evidence of cruelty to animals online; those laws just happen not to be the Online Safety Bill.
Lord Watts (Lab)
My Lords, the Minister says that the Government are against cruelty to animals, yet we have just heard that the present legislation does not stop it. Is it not the case that we need regulation that will prosecute and convict people involved in these practices? Can he tell us how many people have been prosecuted so far this year for animal cruelty?
Viscount Camrose (Con)
I have the numbers prosecuted for animal cruelty in my notes somewhere; I will happily write to the noble Lord.
Lord Vaux of Harrowden (CB)
My Lords, at the moment the law we have been talking about has been preventing those who are perpetrating the harm and publishing it, but is there any merit in going after the people who are watching it and paying for it and have it on their computers—the consumers who ultimately are generating the harm at the end?
Viscount Camrose (Con)
Indeed. I stress that laws preventing these behaviours are already in existence, and the Online Safety Bill supports those laws in some sense. If content is illegal, platforms are obliged to take it down. If content creates a risk of harm to children, again, platforms are obliged to take it down. In the case of the largest platforms, the so-called category 1 platforms, if content violates their terms of service, they are obliged to take it down.
Lord Grocott (Lab)
My Lords, if the Minister’s central argument is that we do not need any amendments to the current Bill because these offences already exist, surely the response is that they are clearly not working because, from all the evidence we have heard, this cruelty is continuing. If the existing legislation simply is not working, surely the option of providing new legislation is precisely what is required.
Viscount Camrose (Con)
I do not accept either that the existing legislation is not working or that, if it is not, the way to fix it is to make an amendment that redirects the Online Safety Bill in such a dramatic and fundamental way.
Lord Inglewood (Non-Afl)
Does the Minister not agree that, on the basis of what has been said in the House today, there is clearly a problem? There appears to be some disagreement over exactly how that problem is to be solved, but does he agree that if there is a problem, it needs to be solved sooner rather than later?
Viscount Camrose (Con)
I certainly agree that there is a problem. I am afraid that over the course of a year, the Social Media Animal Cruelty Coalition documented about 5,500 individual links to videos containing animal cruelty on the major platforms—YouTube, Facebook and TikTok—but globally the number of views of those incidents exceeded 5 billion. So I agree that there is a problem but I do not accept that the solution to it is a radical change to the Online Safety Bill, as was debated in Committee. I am open to working with my colleagues in Defra on what a more effective solution might be.
Lord Foulkes of Cumnock (Lab Co-op)
Is the Minister aware that he is very lucky that my almost namesake, the noble Baroness, Lady Fookes, is not in the House today, otherwise he would be in dead trouble?
Baroness Browning (Con)
Would it be of help to my noble friend to consider that what we have heard today clearly sets out a difference between a crime of being cruel to an animal and what he proposes to bring forward in the Online Safety Bill? If in the Bill he simply added at the appropriate point—I am not familiar enough with it to know at exactly what point, but he will know—the words “and all sentient beings”, would that not include some of the animals we are talking about? It would not cover them all since there are other living creatures that would not be regarded as sentient, but certainly primates would be, and they have been mentioned today. Would that help my noble friend? Clearly there is a difference. I say this as someone who had ministerial responsibility many years ago for the welfare of farm animals. Would that not solve the problem? Could he at least explore it?
Viscount Camrose (Con)
I am happy to explore all creative and inventive solutions to the very real problem of reducing not only cruelty to animals but people’s deplorable enjoyment of that cruelty.
Business of the House
(10 months, 2 weeks ago)
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Illegal Migration Bill
(10 months, 2 weeks ago)
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Lord Murray of Blidworth
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 5, Schedule 1, Clauses 6 to 14, Schedule 2, Clauses 15 to 68, Title.
Illegal Migration Bill: Economic Impact Assessment
(10 months, 2 weeks ago)
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The Parliamentary Under-Secretary of State for Migration and Borders (Lord Murray of Blidworth) (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Minister for Immigration to an Urgent Question in another place on the publication of the economic impact assessment on the Illegal Migration Bill. The Statement is as follows:
“The Illegal Migration Bill is critical to stopping the boats. Its intent is clear: if you come to the United Kingdom illegally, you should be detained and swiftly returned to your home country if safe or relocated to a third country such as Rwanda. This will help break the business model of the people smugglers, save lives and deter small boat crossings.
The impact assessment published yesterday makes it clear that inaction is simply not an option. The volumes and costs associated with illegal migration have risen exponentially, driven by small boat arrivals. Unless we act decisively to stop the boats, the cost to the taxpayer and the damage to society will continue to grow.
The asylum system currently costs £3.6 billion a year and £6 million a day in hotel accommodation. The impact assessment estimates that, at current spending levels, the Bill would need to deter 37% of arrivals to enable financial savings for the taxpayer. However, the cost of accommodating illegal migrants has increased dramatically since 2020. If these trends continue, the Home Office will be spending over £11 billion a year, or over £32 million a day, on asylum support by the end of 2026. In such a scenario, the Bill would need to deter only 2% of arrivals to enable cost savings.
The impact assessment suggests that passing this Bill could save the UK taxpayer over £100,000 for every illegal migrant deterred from making a small boat crossing. It also found that the Bill could lead to wider benefits, including reducing pressures on local authorities, public services and the housing market.
There is clear evidence that policies such as this have a significant deterrent effect. We considered evidence from Australia. Its Operation Sovereign Borders reduced the number of illegal maritime arrivals to Australia from around 18,000 in 2013 to virtually zero in subsequent years.
The British public are clear that they want to stop the boats. That is why we must keep using every tool at our disposal to stop the boats, and why this Bill must become law.”
Lord Ponsonby of Shulbrede (Lab)
My Lords, yesterday the Government released an impact assessment on the Illegal Migration Bill, two days before the first day of Report on the Bill, contrary to the principles of HM Treasury’s Green Book and the Better Regulation Framework guidance to departments. The impact assessment does not contain an explanation of the costs and benefits, does not outline alternative policy options and was not published on the same day that the Bill was introduced.
The impact assessment quite literally states that it has
“not attempted to estimate the total costs or benefits of the proposal”.
It also does not consider anything other than either implementing the Bill as a whole or not implementing the Bill at all. Do the Government believe there are any other options?
The timing of the impact assessment’s arrival has prevented the other place from improving it with its scrutiny. A significant proportion of the time set aside in this House has been taken up discussing the arrival of the impact assessment. Does the Minister think this is good policy-making procedure?
If this House is to perform its critical function of scrutinising legislation, it is necessary for us to have complete, comprehensive and timely information about the basis on which policy choices are made and the reasons alternative options have been rejected. Can the Government now explain why an impact assessment for such a significant Bill does not conform to government guidance on policy communication with Parliament?
Lord Murray of Blidworth (Con)
I thank the noble Lord. The answer is that there are no other options. The option before the House tomorrow and on succeeding days is the Bill; the alternative is the present scenario, which is not tolerable, in the Government’s view. On the questions about the timing and context of the impact assessment, it was drafted, obviously, in the context of the need urgently to address the dangerous and illegal crossings of the channel. Accordingly, the legislation and the IA were prepared in order to address that problem at speed. It is also the case that the Rwanda scheme was the subject of a legal challenge in the courts, and clearly it was appropriate to take that into account in preparing the impact assessment.
On the question about whether the impact assessment complies with government guidance, I suggest that, in the context of the Bill, it does. It sets out, so far as can be ascertained, the likely impact. But this Bill, like others, is predicated on a strong theory of deterrence, and it is therefore important to note that it is hard empirically to provide detailed statistics, because the purpose of the Bill is to deter the illegal crossings, as the noble Lord acknowledges.
Lord German (LD)
My Lords, it is no wonder that we have had to wait so long for this impact assessment, because it makes very uncomfortable reading for the Government. It tries to justify the unjustifiable by leaving out the costs of so many pieces of the project. It is certainly not rigorous: uncertainty is mentioned 24 times and the Government have looked at only one option. As the House heard in Committee, the Government could have made other choices. This IA cements in uncertainty because it fails to provide a sensible view of the cost consequences, given the outcome of a policy that does not distinguish between those fleeing for their lives and safety, and others.
The impact assessment does not measure the impact on local authorities. It does not measure the impact on the budget of not having the third countries to remove people to, with people having to remain in limbo. It also does not measure the impact on children and the victims of modern slavery, who are not able to obtain protection and support. In essence, this impact assessment has more holes than a Gruyère cheese.
Are the Government diverting resources from reducing the backlog in order to resource the implementation of the illegal migration legislation? That comment has been made in the media throughout the last week: people are being diverted from reducing the backlog in order to make sure that the Bill is resourced.
The impact assessment is clear that, if the deterrent does not work and the numbers arriving do not change, costs will be higher, so why has the range of costs left out the development costs to implement the project? Where is the cost in this assessment of containing more—
Baroness Williams of Trafford (Con)
My Lords, I remind noble Lords that there are 10 minutes for a UQ. Therefore, if noble Lords kept their comments to a minimum, we could get through more questions.
Lord German (LD)
The Government say that this is an “illustrative analysis”—it certainly provides more illustrations than proper analysis of the costs.
Lord Murray of Blidworth (Con)
I do not accept the premise of the noble Lord’s question, if that is what it was. The impact assessment published yesterday supports the need for change, sets out the broad costs of implementing the Bill, outlines potential savings, and highlights examples of where policy and operations have delivered an impact on illegal migration in other countries. For example, it shows that, for every illegal migrant deterred from making these crossings, the Bill will save the taxpayer £106,000, rising to £165,000 if current trends in accommodation costs continue.
Lord Carlile of Berriew (CB)
My Lords, can the Minister advise the House as to what weight should be given to this financial and legal impact assessment alongside the damage caused to the consistency of our domestic law and the terrible damage being done to our reputation as a keeper of international treaties?
Lord Murray of Blidworth (Con)
As I made clear during its earlier stages, the Bill introduces a new legal regime, and it is the Government’s view that it is consistent with our international obligations, which we always strive to meet. It is right that the facts in this impact assessment, and in the overall assessment of the situation made by the Government, are in favour of this legislation.
Baroness Lister of Burtersett (Lab)
My Lords, the Statement said that the Bill will have a deterrent effect and that there was strong evidence of that effect. Could the Minister therefore explain why the impact assessment says that
“it is not possible to estimate with precision the level of deterrence that the Bill might achieve”?
It refers also to:
“The academic consensus … that there is little to no evidence suggesting”
such a deterrent effect.
Lord Murray of Blidworth (Con)
I refer the noble Baroness to the answer I gave in relation to the evidence from Australia, and, in particular, to paragraph 38 of the impact assessment.
Lord Watts (Lab)
My Lords, the Minister used Australia as an example, but has he not noticed that the channel is 20 miles across? With Australia we are talking about thousands of miles, so there is no comparison to be made. How much will the £170,000 to Rwanda cost? What is the budget for that element, and is it built into the assessment?
Lord Murray of Blidworth (Con)
Yes, I had noted the geographical distinction, but I suggest to the noble Lord that, in theory, the principle is the same: if you arrive here illegally, you will be detained and removed. That has worked in the context of Australia. As for the second part of his question, yes, the impact assessment does assist in the financial planning of the budget and strongly favours progression with the Bill.
Lord Hunt of Kings Heath (Lab)
My Lords, in the other place, Theresa May said:
“The Home Office knows that the Bill means that genuine victims of modern slavery will be denied support”.—[Official Report, Commons, 13/3/23; col. 593.]
In this House, we were very proud of the Modern Slavery Act, so why are the Government dismantling its provisions?
Lord Murray of Blidworth (Con)
As the noble Lord is aware, it is the intention of the Bill to create as a tight a framework as possible, and there is a risk that a loophole would be created if the modern slavery provisions were left unamended. That is the purpose of the provisions on modern slavery in the Bill.
Lord Cormack (Con)
My Lords, that is no answer to the noble Lord. The Modern Slavery Act was introduced by the Government, supported by us on this side, and received with pride in all parts of the House. It is being unravelled and there is no proper excuse for that.
Lord Murray of Blidworth (Con)
The noble Lord will not be surprised to learn that I do not agree with him.
Social Housing (Regulation) Bill [HL]
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Lords ChamberRead Full debate Social Housing (Regulation) Act 2023 View all Social Housing (Regulation) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 109-I Marshalled list for Consideration of Commons Amendments - (26 Jun 2023)
Baroness Scott of Bybrook
That this House do agree with the Commons in their Amendments 1 to 12.
“(7) In section 202 of the Housing and Regeneration Act 2008 (inspections: supplemental) omit subsections (4) to (7).”
“(d) a notice of the appointment of an administrator of the provider under paragraph 14 or 22 of Schedule B1 to the Insolvency Act 1986 is filed with the court under paragraph 18 or 29 of that Schedule;”
“(ea) in subsection (3), for the words from “period,” to the end substitute “period if—
(a) the regulator has made reasonable enquiries with a view to locating secured creditors of the registered provider, and
(b) where the regulator located one or more such creditors, each of them has consented to the extension.”;”
“(eb) in subsection (5), omit the words from “if” to the end;”
“(4) In section 147 (further moratorium), in subsection (3), for the words from “period,” to the end substitute “period if— (a) the regulator has made reasonable enquiries with a view to locating secured creditors of the registered provider, and (b) where the regulator located one or more such creditors, each of them has consented to the further moratorium.””
“(5) In section 151 (appointment of interim manager during moratorium), in subsection (4), for paragraph (b) (but not the “or” following it) substitute— “(b) when the regulator notifies the interim manager that there are proposals under section 152 which are agreed proposals,”. (6) In section 153 (procedure for proposals made during moratorium)— (a) in subsection (1), after paragraph (b) insert— “(ba) if the regulator is able to locate any secured creditors of the registered provider after making reasonable enquiries, those creditors,”; (b) after subsection (1) insert— “(1A) If no secured creditors are located for the purposes of subsection (1), the proposals made by the regulator following the consultation required by that subsection are agreed proposals for the purposes of this group of sections.”; (c) in subsection (2)— (i) for the words before paragraph (a) substitute “Where the regulator locates one or more secured creditors of the registered provider for the purposes of subsection (1), the regulator must, before making proposals, send a copy of draft proposals to—”; (ii) for paragraph (b) (but not the “and” following it) substitute— “(b) the secured creditors located for the purposes of subsection (1),”; (d) in subsection (3), in the words before paragraph (a) for the words from “The regulator” to “bringing” substitute “If the regulator sends draft proposals under subsection (2), the regulator must also make arrangements for bringing those”; (e) for subsection (4) substitute—
“(4) If each secured creditor to whom draft proposals were required to be sent agrees to them by notice to the regulator, the draft proposals become agreed proposals for the purposes of this group of sections.”; (f) in subsection (5)—
(i) in the words before paragraph (a) for “Proposals” substitute “Draft proposals”; (ii) in paragraph (a), for “proposals were sent” substitute “draft proposals were required to be sent”; (g) in subsection (6)(b)—
(i) for “its” substitute “any”; (ii) for “the original” substitute “draft”; (h) for subsection (8) substitute— “(8) The regulator may make proposals amending agreed proposals; and this section and section 152 apply to such proposals.””
“(7) In section 158 (assistance by regulator in connection with proposals), in subsection (1), for “the agreement of proposals” substitute “the regulator deciding whether to exercise the power under section 152 to make proposals and (if proposals are made) the proposals becoming agreed proposals”.”
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, with the leave of the House, as well as moving that this House do agree with the Commons in their Amendments 1 to 12, I will also speak to all the other Commons amendments.
I am pleased to bring the Bill back to the House and to see the progress that it has made since it left. This legislation seeks to drive the change that we know is so desperately needed in the social rented sector. It is vital that everyone learns from the mistakes that led to the Grenfell Tower tragedy, and the Bill will ensure that social housing tenants receive the protection and respect that they deserve. The Grenfell community’s tireless campaigning will leave a legacy of real change to social housing in this country.
The need to drive up the quality of social housing and rebalance the relationship between tenants and landlords was also thrown into sharp relief by the tragic death of Awaab Ishak. I know that Awaab’s father is watching today, and I know that I speak for all of us when I say that my thoughts remain with the Ishak family. I thank the family, along with Shelter and the Manchester Evening News, for their steadfast campaigning on Awaab’s law. This law will make a real difference to people’s lives, and I hope that it brings some degree of comfort to all those who knew and loved Awaab.
As I shall set out, the Government have listened carefully to the points raised, both in this House and in the other place, and tabled amendments in the other place to strengthen the legislation to its fullest extent. Commons Amendments 10, 11, 12, and 13 amend the clauses added by this House on competency and conduct standards and make provision for them to require that senior housing managers and senior housing executives have, or are working towards, appropriate level housing management qualifications.
We have also tabled a further amendment to the Bill to ensure that relevant managers employed by organisations which deliver housing management services on behalf of a registered provider are captured by the legislation, as was our original intention. I thank the noble Baroness, Lady Hayman of Ullock, for bringing the need for this amendment to my attention. This amendment will require registered providers to take steps to secure that relevant managers of these delegated services providers are qualified.
Our amendment also introduces implied terms into the contractual agreements between registered providers and delegated services providers and relevant sub-agreements, stipulating that their relevant managers should have, or be working towards, a specified qualification in housing management. This enables registered providers to take action against delegated services providers who are not compliant. These amendments, which have been welcomed by Grenfell United and Shelter, will drive up professional standards and the quality of housing services across the sector.
I turn to the amendments that we tabled in the other place on Awaab’s law. I am sure that I am not alone in saying that I was deeply shocked and saddened by the tragic death of Awaab Ishak. Commons Amendment 28 takes a power for the Secretary of State to set out requirements for landlords in secondary legislation to investigate and rectify hazards within a certain time. The amendment also inserts an implied covenant into tenancy agreements that landlords will comply with the requirements prescribed in regulations; this will impel landlords to deal with hazards such as damp and mould in a timely fashion, knowing that, if they fail to do so, they can face legal challenge from residents.
We have also introduced Amendments 14, 15, 17 and 29, which will ensure that the regulator sets standards for landlords to provide tenants with information about how to make complaints, and about their rights as tenants.
Commons Amendment 27 will give the ombudsman explicit statutory power to publish guidance on good practice, alongside the power to order landlords to complete a self-assessment if the ombudsman has received a relevant complaint about a landlord.
Amendments 1 and 2 repeal the provisions in the Housing and Regeneration Act 2008 which provide a specific power to enable the regulator to charge fees for inspections. Those fees will be recoverable under the regulator’s fee-charging powers under Section 117 of the Housing and Regeneration Act 2008, so the specific inspections power is now unnecessary.
Amendments 3 to 9 are technical amendments concerning moratorium procedures when the regulator is unable to locate any secured creditors.
Amendment 16 removes Clause 24 relating to energy demand, which was inserted into the Bill by this House. Although we are sympathetic to the aims of the clause, and we agree with the need to continue progress on making social homes warmer and more energy efficient, we do not believe it is appropriate to set consultation parameters without ministerial oversight. We recognise that the sector would benefit from clear standards to support energy efficiency improvements: that is why we announced that we will consult on standards for improving energy efficiency in the sector within six months of the Bill receiving Royal Assent. We remain committed to this, and officials have already begun work on this consultation. I am able to give noble Lords here today an indication of some of the areas for consultation. We will ask what the appropriate compliance date is for meeting an energy efficiency standard, what energy performance metric this should be measured against and what, if any, exemptions are appropriate.
Amendments 18 to 21 and 23 to 26 deliver technical changes that will ensure that, during a survey or emergency remedial action, any decision to leave equipment or materials on the premises takes into account the impact of that on tenants.
Amendment 22 amends requirements relating to the production and publication of an inspector’s report following the completion of an inspection. These amendments provide that the inspector must produce a summary of findings, as well as a report on any matters specified by the regulator. Amendment 31 was tabled to remove the Lords privilege amendment in Committee in the other place.
Amendments 32 to 51 deal with notices under Sections 104 to 108 of the Housing and Planning Act 2016. These amendments ensure that technical requirements relating to notices do not prevent the legislation working effectively, and help make provisions relating to insolvency easier for the regulator to operate.
Finally, Amendment 53 introduces a provision to clarify the relationship between the data protection legislation and Part 2 of the Housing and Regeneration Act 2008. I beg to move.
Lord Best (CB)
My Lords, I welcome the Commons additions to this important Bill. As a prelude, I thank the Minister for the earlier amendment she promised and delivered before the Bill left your Lordships’ House. This created the duty for the social housing regulator to carry out regular, routine inspections rather than just looking at the social landlord’s accounts and paperwork. This amendment had been earnestly requested by the Grenfell United group, which has campaigned tirelessly to improve key aspects of social housing regulation. If only the regulator’s team had made an inspection visit to the social landlord of Grenfell Tower and talked to residents, it would have been obvious that all was not well. The Minister has taken a close personal interest in the aftermath of the Grenfell tragedy, and I congratulate her on the amendment she brought forward which will now ensure routine inspections are a key part of the regulator’s future role.
I now welcome Commons Amendment 17, Awaab’s law, which will strengthen the role of the regulator in requiring social housing landlords to deal swiftly with problems of disrepair. Sadly, some housing associations and some councils have not been on top of these issues, with tragic consequences. There is a need now for some serious investment in the upgrading of outdated public housing, mostly from the 1960s and 1970s. As well as encouraging social landlords to listen more attentively to the matters raised by their residents, I hope we are moving to an extension of the ombudsman role, which will cut down the need for some of the sharp practices of the no-win, no-fee lawyers, who can exploit tenants’ predicaments. There is more to do here.
In particular, I greatly welcome the new Amendment 13B, which covers standards relating to competence and conduct. This amendment is of particular concern to the Grenfell United group and is intended to achieve greater professionalism of the social housing sector, requiring senior housing managers and executives to have or to work towards relevant qualifications. The noble Baroness, Lady Sanderson, raised these issues on behalf of Grenfell United when the Bill was in this House. We have had to wait until conclusions were reached in the other place to amend the Bill accordingly, but the wait has been worth while and I pay tribute to the noble Baroness.
These Commons amendments to Clause 21 will, over time, see the social housing sector properly “professionalised”. This approach was advocated for personnel managing privately rented and leasehold properties by the Government’s working group on the regulation of property agents, which I was pleased to chair. That badly needed change has yet to come about for the private rented sector, although the matter may be raised in the forthcoming Renters (Reform) Bill or the leasehold reform Bill. In the meantime, measures akin to those proposed for managers of privately rented homes will now be applied by this Bill to the management of the social housing sector. This enhancement of the skills of social housing personnel will greatly increase the role and responsibilities of the Chartered Institute of Housing, which is well able to play a vital role here.
Baroness Hayman (CB)
My Lords, I declare my interests as co-chair of Peers for the Planet and in that I have a family member currently working in the field of energy efficiency. I will respond to the Government’s Motion to agree with the Commons in its Amendment 16. It removes Clause 24, on energy efficiency, which was inserted with cross-party support on Report. Our amendment sought to ensure a comprehensive approach to energy efficiency for tenants in social housing, to reduce their costs and to improve living conditions. It would also have cut the costs to government—and the taxpayer—of subsidising energy bills and helped with energy security and achieving the Government’s target of reducing energy demand by 15% by 2030.
The importance of energy efficiency has been highlighted by numerous committees and reports from this and the other place, including one recently from the Public Accounts Committee which highlighted the problems so far with energy efficiency schemes, including the lack of coherence. It said they had been “fragmented” and that
“stop-go activity has hindered stable long-term progress towards government’s energy efficiency ambitions.”
It is important that real progress has been made during the passage of this Bill. We should remember that, at an earlier stage, energy efficiency was added to the objectives of the Regulator of Social Housing, with the support of the Government. I pay tribute to the work of the noble Baroness, Lady Pinnock, in achieving that end.
The Minister and her officials have been generous with their time in discussions prior to today’s proceedings —I am very grateful for that—in which she stressed the centrality of consultation with the sector before imposing standards. We have made progress, as she said, with a commitment to publish a consultation within six months of Royal Assent. As the Minister has heard me say before, in the past, the Government have been rather better on publishing consultations than responding to them, and much better than on actioning the policy that was their original subject. Can she give any further reassurances about timelines for a government response to the consultation and the provision of a final plan to improve the energy efficiency of social housing within 12 months of Royal Assent?
While we have not made as much progress as I would have wished on this issue, we all understand that the priority of the Bill has been the urgent need for effective regulation of social housing, and I completely recognise any concerns about diverting from that central objective. I also recognise that energy efficiency is an issue not just for the social housing sector but across the whole of our housing stock. It arises mainly from the quality, or lack thereof, of that housing stock. As the Minister knows, I have tabled amendments to both the levelling-up Bill and the Energy Bill to try to address what we are talking about in this Bill: the need for a long-term strategic plan of action which would include but not be exclusive to the social housing sector.
This is an issue to which we will return, but I hope the Minister can give me some reassurance on the issues I have raised when she sums up.
Baroness Pinnock (LD)
My Lords, amazingly, it has been eight months since this House last discussed the Bill. At that time, I welcomed it and many of the details it provided to improve the regulation of social housing. However, across the House, noble Lords challenged the Government to think again on some of the detail of the Bill. The noble Lord, Lord Best, and the noble Baroness, Lady Hayman, have outlined some of the ways in which the Bill was challenged and subsequently improved.
I am pleased to say that some of the government amendments in the Commons have indeed built on the amendments made on Report in this House. I particularly support Commons Amendment 13, which sets new professional standards for senior social housing managers, as I do the power for the ombudsman to provide best practice guidance. Those are two great improvements made to the Bill since it first started in this House.
The Commons also introduced into the Bill “Awaab’s law” in memory of the tragic death of two-year-old Awaab Ishak, which was caused by appallingly damp and mouldy conditions in the flat where he and his family lived. The response of the social housing landlord was shockingly neglectful—and, as it turned out, fatally neglectful for poor young Awaab. I congratulate the Government on introducing that new clause to address those responsibilities and to ensure that social landlords properly address what is described in the amendment as “prescribed hazards”. Let us hope that this is sufficient to ensure that no family lives in such dreadful conditions again—albeit it applies currently to social housing only.
Finally, although I am pleased that on Report the Government accepted my amendment to include energy efficiency as a core responsibility of the regulator, I am disappointed that they have not been able to be as positive about the amendment in the name of the noble Baroness, Lady Hayman, agreed by this House, which contained a comprehensive approach to energy efficiency that my simple amendment failed to do. We have a challenge as a country, and the Government have a responsibility to make changes so that homes are warmer and less expensive to heat. There was an opportunity to do so; unfortunately, the Government failed to accept it.
However, I am pleased that the Government and the Minister have agreed to consult—although, as always, the caveat is the question of what that will lead to, as the noble Baroness, Lady Hayman, alluded to. I am sure that the noble Baroness and many of us in this House will scrutinise closely the outcome of such a consultation. This is an important matter. We need to get it right. People should not be living in cold homes because they cannot afford to heat them. If the Government have the power to make a change, we will press them to do so.
I want to end on a positive note. We on these Benches support the Bill and trust that social housing tenants will see the benefits that it should bring.
Baroness Hayman of Ullock (Lab)
My Lords, this is a really important Bill. I am pleased to see it reach this stage; we have supported it all the way through. It has been a pleasure to work on a Bill that I think is the kind of Bill we ought to be doing. It is short, it is focused and it has a Minister who listens. That has been extremely good to work with. I am really pleased to see the government amendments that have been put forward, in particular those around professionalisation. I also pay tribute to the noble Baroness, Lady Sanderson; her work during the passage of the Bill was exceptional and is, I am sure, one of the main reasons why we have these amendments before us today. On Awaab’s law, I join the Minister and other noble Lords in paying tribute to his family.
I am pleased that the Government have listened to the concerns raised by the arm’s-length management organisations and tenant management organisations, as well as the National Housing Federation, in bringing forward the amendments that dealt with the concerns there.
The noble Lord, Lord Best, welcomed the promised amendment on inspections that was so important to Grenfell United. We are absolutely delighted that the Minister has brought forward those amendments today. I want to thank Grenfell United, Shelter and the Ishak family for their work and support during the passage of this Bill; it has helped us to keep the important issues at the centre and as the focus of what we need to achieve.
I thank the noble Baroness, Lady Hayman, for pushing the energy efficiency amendments, which are really important. It is good that we did not lose sight of them during the Bill’s passage and that we have made some progress. I also thank the noble Baroness, Lady Pinnock, for bringing forward her amendment on that.
I thank the Minister and her officials for their time and their constructive approach to working with us, the Opposition, and other noble Lords during the Bill’s progress through the House. It has enabled us to make what was a good Bill a much better Bill—one that is more fit for purpose.
Finally, I thank my noble friend Lady Wilcox for her invaluable help and support. I am sure that we are now both looking to see the Bill go on to the statute book, so that we can raise our eyes up and look forward to the Renters (Reform) Bill.
Baroness Scott of Bybrook (Con)
My Lords, I am grateful to all noble Lords who have contributed and for the wide-reaching support for this important Bill. In particular, I thank my honourable friend the Member for Bishop Auckland for steering the Bill so ably through the other place. I also thank the department’s Bill team, all the policy and legal officials, and my private office team, who have worked hard over the past year to deliver this legislation through both Houses. I especially thank the House authorities, parliamentary staff, clerks and doorkeepers, and all noble Lords who have contributed to the evolution of this Bill.
Baroness Scott of Bybrook
That this House do disagree with the Commons in their Amendment 13 but do propose Amendment 13B in lieu—
“(3) Standards under subsection (1) may require registered providers to secure that their relevant managers—
(a) have a specified qualification in housing management or type of qualification in housing management, or (b) are working towards such a qualification or type of qualification. (4) A “relevant manager” means—
(a) a senior housing executive, or (b) a senior housing manager. (5) A qualification or type of qualification specified for a senior housing executive may only be— (a) a foundation degree, or
(b) a qualification or type of qualification regulated by the Office of Qualifications and Examinations Regulation which is of a level not exceeding level 5. (6) A qualification or type of qualification specified for a senior housing manager may only be a qualification or type of qualification regulated by the Office of Qualifications and Examinations Regulation which is of a level not exceeding level 4.
(7) Except as provided by subsections (3) to (6), standards under subsection (1) may not require registered providers to comply with rules about the qualifications to be required of relevant individuals.
(8) In this section, “senior housing executive” means a relevant individual who—
(a) is an employee or officer of the registered provider, (b) has responsibility (solely or jointly) for the day to day management of the provision of services in connection with the management of social housing provided by the provider, and (c) is part of the provider’s senior management. (9) For the purposes of this section, an individual is part of a registered provider’s senior management if the individual plays a significant role in—
(a) the making of decisions about how the whole or a substantial part of the activities of the provider which relate to social housing are to be managed or organised, or (b) the management or organisation of the whole or a substantial part of such activities. (10) In this section, “senior housing manager” means a relevant individual who— (a) is an employee of the registered provider, and
(b) is a senior housing and property manager for the registered provider. (11) For the purposes of subsection (10)(b), whether an individual is a senior housing and property manager is to be determined by reference to the description of the occupation of senior housing and property management published by the Institute for Apprenticeships and Technical Education under section ZA10(5) of the Apprenticeships, Skills, Children and Learning Act 2009.
(12) The references in subsections (5) and (6) to the level of a qualification are to the level assigned to a qualification by virtue of general conditions set and published by the Office of Qualifications and Examinations Regulation under section 134 of the Apprenticeships, Skills, Children and Learning Act 2009.
(13) For the purposes of this section, “employee” includes a person employed under a contract of apprenticeship.”
“(3) Standards under subsection (1) may require registered providers to secure that their senior housing executives and senior housing managers—
(a) have a specified qualification in housing management or type of qualification in housing management, or
(b) are working towards such a qualification or type of qualification.
(4) Standards under subsection (1) may require registered providers to take steps to secure that relevant managers of their services providers—
(a) have a specified qualification in housing management or type of qualification in housing management, or
(b) are working towards such a qualification or type of qualification.
(5) Each of the following is a “relevant manager” of a services provider—
(a) if the services provider is a relevant individual, that individual;
(b) a senior housing executive of the services provider;
(c) a senior housing manager of the services provider.
(6) A qualification or type of qualification specified for a senior housing executive may only be—
(a) a foundation degree, or
(b) a qualification or type of qualification regulated by the Office of Qualifications and Examinations Regulation which is of a level not exceeding level 5.
(7) A qualification or type of qualification specified for a senior housing manager or for an individual described in subsection (5)(a) may only be a qualification or type of qualification regulated by the Office of Qualifications and Examinations Regulation which is of a level not exceeding level 4.
(8) The references in subsections (6) and (7) to the level of a qualification are to the level assigned to a qualification by virtue of general conditions set and published by the Office of Qualifications and Examinations Regulation under section 134 of the Apprenticeships, Skills, Children and Learning Act 2009.
(9) Except as provided by subsections (3) to (8), standards under subsection (1) may not require registered providers to comply with rules about the qualifications to be required of relevant individuals.
(10) See also section 217A (which makes provision implying terms relating to qualifications into management services agreements).
194AA Meaning of “services provider”, “senior housing executive” and “senior housing manager”
(1) This section makes provision about the meaning of terms for the purposes of section 194A.
(2) “Services provider”, in relation to a registered provider, means a person who, in accordance with an agreement with the registered provider or another person, provides services in connection with the management of social housing provided by the registered provider or arranges for the provision of such services.
(3) For the purposes of subsection (2), an agreement does not include a contract of employment or a contract of apprenticeship.
(4) “Senior housing executive” of a registered provider means a relevant individual who—
(a) is an employee or officer of the registered provider,
(b) has responsibility (solely or jointly) for the day to day management of the provision of services in connection with the management of social housing provided by the registered provider, and (c) is part of the registered provider’s senior management.
(5) “Senior housing executive” of a services provider in relation to a registered provider means a relevant individual who—
(a) is—
(i) an employee of the services provider,
(ii) an officer of the services provider, or
(iii) if the services provider is a partnership, a partner in the partnership,
(c) has responsibility (solely or jointly) for the day to day management of the provision of services in connection with the management of social housing provided by the registered provider, and (c) is part of the services provider’s senior management.
(6) For the purposes of subsections (4) and (5), an individual is part of a registered provider’s or services provider’s senior management if the individual plays a significant role in—
(a) the making of decisions about how the whole or a substantial part of the activities of the provider which relate to social housing are to be managed or organised, or
(b) the management or organisation of the whole or a substantial part of such activities.
(7) “Senior housing manager” of a registered provider means a relevant individual who—
(a) is an employee of the registered provider, and
(b) is a senior housing and property manager for the registered provider.
(8) “Senior housing manager” of a services provider in relation to a registered provider means a relevant individual who— (a) is an employee of the services provider,
(b) is a senior housing and property manager for the services provider, and
(c) is involved in the provision of services in connection with the management of social housing provided by the registered provider.
(9) For the purposes of subsections (7) and (8), whether an individual is a senior housing and property manager is to be determined by reference to the description of the occupation of senior housing and property management published by the Institute for Apprenticeships and Technical Education under section ZA10(5) of the Apprenticeships, Skills, Children and Learning Act 2009.
(10) In this section—
“employee” includes a person employed under a contract of apprenticeship;
“relevant individual” has the same meaning as in section 194A.
(11) The following Table gives the meaning of “officer” in relation to services providers for the purposes of this section—
Services provider | Meaning of “officer” |
Registered charity which is Trustee, secretary or treasurer not a registered company | |
Registered society | “Officer” within the meaning given by section 149 of the Co-operative and Community Benefit Societies Act 2014 (including a person co-opted to serve on the society’s committee) |
Registered company | “Officer” within the meaning given by section 1173 of the Companies Act 2006 |
Limited liability partnership | A member of a limited liability partnership.” |
“(3) Before setting a standard under section 194A which imposes a requirement described in subsection (4) of that section, the regulator must consult, or ensure that there has been consultation with, each body (if any) which is nominated by the Secretary of State for the purposes of this subsection.
(4) The Secretary of State may nominate a body for the purposes of subsection (3) only if the body appears to the Secretary of State to represent the interests of services providers in relation to registered providers (as defined in section 194AA(2)).
(5) The Secretary of State must notify the regulator of any nomination (or withdrawal of any nomination) made for the purposes of subsection (3).”
(3) In section 197 of that Act (direction by Secretary of State), after subsection (5) insert—
“(5A) Before giving a direction to set a standard under section 194A which imposes a requirement described in subsection (4) of that section, the Secretary of State must consult one or more bodies appearing to the Secretary of State to represent the interests of services providers in relation to registered providers (as defined in section 194AA(2)).”
(4) After section 217 of that Act insert—
“217A Implied terms of management services agreements relating to qualifications
(1) Each management services agreement in relation to social housing of a registered provider, whenever entered into, is to be treated as including the terms set out in subsection (4).
(2) In this section, a “management services agreement”, in relation to social housing of a registered provider, means an agreement under which one person (a “services provider”) agrees with another person (the “services recipient”) to provide services in connection with the management of social housing provided by the registered provider or to arrange for the provision of such services.
(3) For the purposes of subsection (2)—
(a) an agreement does not include a contract of employment or a contract of apprenticeship, and
(b) the services recipient may be the registered provider or another person.
(4) The terms are that—
(a) the services provider must secure that its relevant managers who are involved in the provision of services in connection with the management of social housing to which the agreement relates meet the qualification standard at all times;
(b) in the event that the services provider does not comply with the term set out in paragraph (a), the services provider will take such action to rectify the non-compliance as is reasonably required by the services recipient;
(c) the services provider must comply with any reasonable request for information demonstrating whether or not the services provider is complying with the term in paragraph (a) that is made by the registered provider who provides the social housing to which the agreement relates or (if different) the services recipient.
(5) A relevant manager of a services provider under a management services agreement “meets the qualification standard” if—
(a) a standard is in force under section 194A which requires the registered provider who provides the social housing to which the agreement relates to take steps to secure that the manager has, or is working towards, a qualification or type of qualification in housing management, and
(b) the manager has or (as the case may be) is working towards such a qualification, or if there is no standard in force under section 194A which imposes a requirement described in paragraph (a).
(6) A term of a management services agreement is not binding on the services recipient to the extent it would—
(a) exclude or restrict the liability of the services provider for breach of a term implied by this section, or
(b) prevent an obligation under a term implied by this section arising or limiting its extent.
(7) In this section “relevant manager”, in relation to a services provider, has the same meaning as it has for the purposes of section 194A (see section 194A(5)).”
(5) In consequence of the amendment made by subsection (4), in section 192 of that Act—
(a) in paragraph (d), omit the final “and”;
(b) at the end of paragraph (e) insert “, and
(f) makes provision about terms to be implied into management services agreements (section 217A).”””
Baroness Scott of Bybrook
That this House do agree with the Commons in their Amendments 14 to 55.
(i) their tenants’ rights in connection with those things, and
(ii) how to make complaints against registered providers,”
“Secretary of State’s duty to give direction about providing information to tenants
(1) The Secretary of State must give a direction to the Regulator of Social Housing under section 197(2A) of the Housing and Regeneration Act 2008 about setting a standard under section 194B of that Act (standards relating to information and transparency) for the purpose of securing that registered providers of social housing are required to provide their tenants of low cost rental accommodation with information about—
(a) their tenants’ rights in connection with the low cost rental accommodation and with facilities or services provided in connection with that accommodation, and (b) how their tenants can make a complaint against them. (2) The Secretary of State must give the direction before the end of the period of six months beginning with the day on which this Act is passed.
(3) In this section—
“low cost rental accommodation” means accommodation which—
(a) is low cost rental accommodation (as defined in section 69 of the Housing and Regeneration Act 2008) provided by a registered provider of social housing, and (b) is not low cost home ownership accommodation (as defined in section 70 of that Act); “tenant”, in relation to low cost rental accommodation, includes other occupiers.”
“(8) Equipment or materials taken onto premises by virtue of subsection (7) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or (b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
“(9) Where the premises include common parts of a building, references in subsection (8) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.
(10) In this section, “common parts”, in relation to a building, includes the structure and exterior of that building and any common facilities provided (whether or not in the building) for persons who occupy the building.”
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or (b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
“(5A) Where the premises include common parts of a building (as defined in section 199A), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”
“Action after inspection
(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) In section 202 (inspections: supplemental), omit subsections (1) to (3).
(3) In section 203(12) (definition of “inspector”), after “this section” insert “and section 203A”.
(4) After section 203 insert—
“203A Action after inspection
(1) After an inspection of a registered provider is carried out by an inspector under section 201, the inspector must produce—
(a) a written summary of the inspector’s findings, and
(b) a written report about any matters specified by the regulator.
(2) The summary and any report must be in the form specified by the regulator.
(3) The regulator may specify matters, or the form of a summary or report, for the purposes of inspections generally or for the purposes of a particular inspection or description of inspection.
(4) The regulator must give the registered provider a copy of the summary of the inspector’s findings.
(5) The regulator must also give the registered provider—
(a) a copy of the inspector’s report, or (b) a notice confirming that no matters were specified for the purposes of subsection (1)(b). (6) The regulator may publish—
(a) all or part of the summary of the inspector’s findings, (b) (where relevant) all or part of the inspector’s report, and (c) related information.””
“(5) Equipment or materials taken onto premises by virtue of subsection (4)(b) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or (b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
“(6) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or (b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
“(5A) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”
“Power of housing ombudsman to issue guidance to scheme members
(1) The Housing Act 1996 is amended as follows.
(2) In the italic heading before section 51, for “complaints” substitute “ombudsman”.
(3) After section 51 insert—
“51ZA Power of housing ombudsman to issue guidance to scheme members
(1) This section applies where a scheme is approved by the Secretary of State under Schedule 2.
(2) The housing ombudsman may issue to the members of the scheme guidance as to good practice in the carrying on of housing activities covered by the scheme.
(3) Before issuing, revising or replacing guidance under this section, the housing ombudsman must consult—
(a) the Regulator of Social Housing,
(b) members of the scheme, and
(c) individuals who may make complaints under the scheme.
(4) If the housing ombudsman issues, revises or replaces guidance under this section, the housing ombudsman must publish the guidance, the revised guidance or (as the case may be) the replacement guidance.
(5) Subsection (7) applies if—
(a) an individual makes a complaint against a member of the scheme,
(b) the complaint is made under the scheme or the conditions in subsection (6) are met in relation to the complaint, and
(c) it appears to the housing ombudsman that the complaint relates to a matter to which guidance issued by the ombudsman under this section relates.
(6) The conditions referred to in subsection (5)(b) are that— (a) the complaint is made to the member of the scheme,
(b) the complaint is one that the individual could subsequently make under the scheme, and
(c) the individual has notified the ombudsman about the complaint.
(7) The housing ombudsman may order the member of the scheme to—
(a) assess whether the member’s policies and practices in relation to the matter mentioned in subsection (5)(c) are consistent with the guidance issued by the ombudsman under this section in relation to that matter, and
(b) within a period specified in the order, submit to the ombudsman a written statement of the results of the assessment.
(8) If a member of the scheme fails to comply with an order under subsection (7) within the period specified in the order, the housing ombudsman may order the member to publish in such manner as the ombudsman sees fit a statement that the member has failed to comply with the order.
(9) If a member of the scheme fails to comply with an order under subsection (8), the housing ombudsman may—
(a) take such steps as the ombudsman considers appropriate to publish what the member ought to have published, and (b) recover from the member the costs of doing so.
(10) In this section, “the housing ombudsman” means the housing ombudsman appointed in accordance with the scheme.””
“Social housing leases: remedying hazards
After section 10 of the Landlord and Tenant Act 1985 insert—
“Implied term as to remedying of hazards
10A Remedying of hazards occurring in dwellings let on relevant social housing leases
(1) This section applies to a lease of a dwelling if—
(a) the dwelling is in England,
(b) the lease is a relevant social housing lease, and
(c) section 9A—
(i) applies to the lease (see section 9B), or
(ii) would apply to the lease if the provision in section 9B(3) did not exist.
(2) There is implied in the lease a covenant by the lessor that the lessor will comply with all prescribed requirements that are applicable to that lease.
(3) The Secretary of State must make regulations which require the lessor under a lease to which this section applies to take action, in relation to prescribed hazards which affect or may affect the leased dwelling, within the period or periods specified in the regulations.
(4) Regulations under subsection (3) are enforceable against lessors only through actions for breach of the covenant that is implied by subsection (2).
(5) In any proceedings for a breach of the covenant that is implied by subsection (2), it is a defence for the lessor to prove that the lessor used all reasonable endeavours to avoid that breach.
(6) For the purposes of this section a lease is a “relevant social housing lease” at any time when—
(a) the lessor under the lease is a registered provider of social housing, and
(b) the dwelling leased under the lease—
(i) is social housing, but
(ii) is not low cost home ownership accommodation.
(7) In this section and section 10B—
“lease”, “lessor” and “lessee” have the same meanings as in section 9A (see section 9A(9));
“low cost home ownership accommodation” has the meaning given in section 70 of the Housing and Regeneration Act 2008;
“prescribed hazard” has the same meaning as in section 10 (see section 10(2) and (3));
“prescribed requirement” means a requirement prescribed in regulations under subsection (3);
“social housing” has the same meaning as in Part 2 of the Housing and Regeneration Act 2008 (see sections 68 and 72 of that Act).
10B Regulations under section 10A: supplementary provision
(1) Regulations under section 10A(3) may apply to—
(a) leases granted before the day when section (Social housing leases: remedying hazards) of the Social Housing (Regulation) Act 2023 came into force;
(b) prescribed hazards which began before that day; (c) only some descriptions of prescribed hazards.
(2) Regulations under section 10A(3) may—
(a) specify a period that is not of a specific duration (for example a reasonable or appropriate period, including a period decided by the lessor or another person);
(b) specify two (or more) periods in relation to particular action.
(3) Regulations under section 10A(3) may (in particular)—
(a) require the lessor to take particular action, or action that is intended to produce a particular outcome, in relation to a prescribed hazard;
(b) require the lessor to take action in relation to a prescribed hazard that is not of itself intended to remedy the hazard, for example by requiring the lessor—
(i) to investigate whether or how a prescribed hazard is affecting the leased dwelling, or
(ii) to secure that the lessee and any other members of the lessee’s household are provided with alternative accommodation at no cost to them;
(c) require the lessor to take action in relation to a prescribed hazard only—
(i) in particular circumstances, or
(ii) if particular conditions are met;
(d) provide that the lessor is not required to take action in relation to a prescribed hazard— (i) in particular circumstances, or
(ii) if particular conditions are met.
(4) The Secretary of State may by regulations—
(a) provide for section 10A not to apply to particular descriptions of leases;
(b) make provision, in relation to the covenant that is implied by section 10A(2), which corresponds to any provision made by section 9A(4) to (8).
(5) A power to make regulations under section 10A or this section includes power to make—
(a) incidental, transitional or saving provision; (b) different provision for different purposes.
(6) The power to make transitional or saving provision may (in particular) be used to make provision about situations where the covenant in section 10A(2)—
(a) begins to be implied in a lease after its grant because it
becomes a relevant social housing lease;
(b) ceases to be implied in a lease because it ceases to be a relevant social housing lease (including provision to save the lessor’s liability for any breach of the covenant occurring before it ceases to be implied).
(7) Regulations under section 10A or this section are to be made by statutory instrument.
(8) A statutory instrument containing regulations under section 10A or this section may not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.””
“(aa) be signed by, or on behalf of, the petitioner,”
and insert—
“(aa) be signed by, or on behalf of, the registered provider,”
“(aa) be signed by, or on behalf of, the person who made the ordinary administration application,”
“(aa) be signed by, or on behalf of, the person making the appointment,”
“(aa) be signed by, or on behalf of, the person intending to enforce the security.”
“(aa) in subsection (2)(f), for “and informing tenants” substitute “tenants and providing them with information in connection with such consultation”;”
“43A After section 276A (inserted by section 34) insert—
“276B Data protection
(1) This section applies to a duty or power to process information where the duty or power is imposed or conferred by or by virtue of any provision of this Part. (2) A duty or power to which this section applies does not operate to require or authorise the processing of information which would contravene the data protection legislation (but the duty or power is to be taken into account in determining whether the processing would contravene that legislation). (3) In this section “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).””
Financial Services and Markets Bill
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Lords ChamberRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 154-I Marshalled list for Consideration of Commons Reason and Amendments - (27 Jun 2023)
Baroness Penn
That this House do not insist on its Amendment 7 and do agree with the Commons in their Amendments 7A, 7B and 7C in lieu.
“(c) the need to contribute towards achieving compliance by the Secretary of State with section 1 of the Climate Change Act 2008 (UK net zero emissions target) and section 5 of the Environment Act 2021 (environmental targets) where each regulator considers the exercise of its functions to be relevant to the making of such a contribution;”
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, I beg to move Motion A and, with the leave of the House, will also speak to Motions B and C. I am grateful to all noble Lords for their considered scrutiny of the remaining issues in front of us today and throughout the Bill’s passage.
I will speak first to Lords Amendments 7 and 36, and I thank the noble Baronesses, Lady Hayman and Lady Boycott, in particular, for their leadership on these issues during the passage of the Bill.
The UK is a global leader in sustainable finance. The Government’s ambition to support the growth of this important area is demonstrated by the amendment relating to sustainability disclosure requirements made on Report, and the amendments in lieu of Amendments 7 and 36 introduced during Commons consideration.
I turn first to Lords Amendment 7. The regulators have an important part to play in supporting the Government’s ambitions, which was demonstrated by the inclusion of the net-zero regulatory principle at introduction. The Government have reflected carefully on the calls to ensure that the regulatory framework also reflects the Government’s nature targets.
While I welcome the intention behind Amendment 7, the Government cannot accept this amendment because it is too broad and therefore too open to interpretation. We have therefore brought forward Amendments 7A, 7B and 7C in lieu of Amendment 7, which add the relevant and well-defined targets made under the Environment Act 2021 to the new regulatory principle. It is important to recognise that addressing climate change and nature issues is not the regulators’ primary function, which is, broadly, to advance their objectives, including to protect the integrity of the financial markets and the safety and soundness of firms within the financial system and to deliver appropriate protection for consumers. Most of the levers for reaching our net- zero and environmental targets sit outside the regulators’ remit and control.
The amendments in lieu will ensure that, when acting to advance their objectives, the regulators will be required to consider the Government’s commitments to achieve the net-zero emissions target and the environment targets. I assure noble Lords that the amendments do not weaken the requirement for the regulators to consider the Government’s net-zero target. FSMA requires the regulators to act in a way that advances their statutory objectives when carrying out their general functions. When advancing their objectives, the regulators must also have regard to the regulatory principles, which aim to promote good regulatory practice.
It is for the independent regulators to decide how best to meet the requirements placed on them in legislation when discharging their general functions. The drafting of the amendments in lieu makes this clear: the regulators are required to have regard to the regulatory principle only in so far as it is relevant to advancing their objectives. This does not change the effect of the net-zero requirement, but the Government considered that this additional language was needed, alongside expanding the principle, to make this point clear and to ensure consistency. I am confident that the Government’s approach meets the intended effect of Amendment 7, and I hope noble Lords will acknowledge it as a significant step to further support the growth of sustainable finance in the UK.
I turn to Lords Amendment 36 on deforestation-linked financing. As I set out on Report, the Government again support the intention behind this amendment. The policy considerations for tackling the financing of deforestation risk commodities are complex. We are grateful for the work of the Global Resource Initiative and in particular its report on this issue from May 2022. This emphasised the need to take a staged approach and that further exploratory work would be needed to investigate the implementation of a prohibition on the financing of the use of prohibited forest risk commodities.
The Government have therefore brought forward Amendment 36A in lieu of Amendment 36, which commits the Treasury to undertake a review to assess whether the financial regulatory framework is adequate for the purpose of eliminating the financing of illegal deforestation and to consider what changes to the regulatory framework may be appropriate. This will ensure that any intervention is scoped appropriately and that the UK moves in lockstep with our international partners to ensure the effectiveness of any regime in tackling the financing of illegal deforestation.
The Treasury will be required to undertake this review within nine months of the first relevant regulations under Schedule 17 to the Environment Act being made. This will enable the Government to reflect those regulations in the review, which is essential if we are to have a joined-up and effective approach.
As the Government set out in the updated green finance strategy, we will convene a series of round tables this year. These will form the basis of a taskforce to drive forward the work of this important review and support the development of clear conclusions. This will complement the Government’s existing commitment to explore how best the final Taskforce on Nature-related Financial Disclosures—or TNFD—framework should be incorporated into the UK policy and legislative architecture. As the GRI report acknowledged, the developing work of the TNFD is increasingly important, especially as it has now included recommendations relating to deforestation in its draft standards.
Following the review, the Government will consider what further action is appropriate to progress the goal of eliminating the financing of illegal deforestation. The Bill and the existing provisions in FSMA provide the Treasury with extensive powers, including through the regulated activities order or the designated activities regime, to bring new activities into the scope of regulation if needed.
Finally, I turn to Lords Amendment 10. As the Economic Secretary set out yesterday, and as I set out on Report, the Government cannot accept this amendment. While I acknowledge the intention behind it, I reiterate the point that financial inclusion is a complex societal issue that cannot be solved through financial regulation alone. The Government are committed to the aim of ensuring that people, regardless of their background or income, have access to useful and affordable financial products and services. The Government’s view is that the FCA’s current and ongoing initiatives around financial inclusion demonstrate that it can already effectively support the Government’s leadership on this agenda through its existing operational objectives and regulatory principles.
Parliamentary scrutiny of the introduction of the new secondary growth and competitiveness objectives for the regulators comes after two consultations on the Future Regulatory Framework Review and extensive engagement with industry and other stakeholders. It is not appropriate to amend the regulators’ objectives, which are crucial to the effective regulation of financial services in the UK, at this late stage of the Bill’s passage without due consultation. Furthermore, the FCA’s new consumer duty, which comes into force on 31 July, seeks to set a higher and clearer standard of care that firms owe to their customers, and includes a new principle requiring firms to act to deliver good outcomes for consumers. It is important that the sector is given the opportunity to embed these important new requirements before considering further action of a similar nature.
I ask noble Lords not to insist on Amendments 7, 10 and 36 and to agree with the Commons in their Amendments 7A, 7B, 7C, and 36A in lieu. I beg to move.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register, and will speak to Amendment 7A. I thank the Minister and her team for the considerable efforts that have been put in, since the Bill left this House, to find a way to respond positively to the issues raised in my original amendment, which was supported from all sides of the House. As the Minister knows, the central issue was that of providing a clear legislative basis for financial regulators to act, not only on our climate change duties, which the Government themselves recognised and included in the original Bill, but in relation to our duties relating to the natural environment.
This issue is seen as important in Parliament but also outside it. The inclusion of nature was supported both by Professor Sir Partha Dasgupta and, in a statement last week, by a group of eight leading financial firms. I am extremely pleased that the Government decided not to try to completely overturn the amendment but to introduce the amendment we have before us now, the basis of which the Minister has just explained. It recognises that the importance of climate should go alongside the importance of nature, which was not there originally.
Baroness Boycott (CB)
My Lords, I will speak to Amendment 36, which was in my name and those of the noble Baronesses, Lady Sheehan and Lady Chapman, and the noble Lord, Lord Randall. I echo the words of the noble Baroness, Lady Hayman, by thanking the Minister very much for the time she spent working with us on this amendment and trying to lay out exactly why it has not quite passed. I am super grateful for the efforts that were made. I support everything that the noble Baroness, Lady Hayman, just said. We have to make sure that nature runs through everything we do like a stick of Brighton rock. It is extremely important. We cannot survive without it.
Amendment 36 would have introduced mandatory checks to protect the UK financial sector from lending to or investing in companies that engage in illegal deforestation and land grabs against indigenous peoples. It passed a vote in our House, which was wonderful, but sadly it was defeated in the other place, so instead of a new law to stop finance flowing to companies that plunder the environment, I am afraid we have ended up with another review.
I say that with sadness, because we have only just finished the last review into how to stop deforestation finance. That was the three-year inquiry by the Government’s expert body, the Global Resource Initiative —GRI—task force. I suppose many people have said this, but I will say it again: just to commission another review until one of them churns out an acceptable policy is not great governing. The GRI task force was composed of finance and business leaders, as well as civil society. It was excellently put together. It was tasked to provide a cross-sector blueprint to reduce the UK’s contribution to deforestation. In May last year—just over a year ago—it recommended that UK financial services firms should be obliged to check for the risk of any deforestation, legal and illegal, as well as any human rights abuses. The GRI recommended a due diligence regime much more far reaching than the one we proposed under Amendment 36, which, I hasten to emphasise, was limited to illegal deforestation only. Even the financial sector itself does not want this approach, as evidenced by the fact that investors representing £2.7 trillion publicly supported our amendment.
I will not push this Motion to another vote but, given the strength of support we have seen and the consensus behind the introduction of mandatory due diligence, I will ask the Minister for three clarifications. First, can she confirm that the Treasury’s review will put forward a specific proposal for a comprehensive due diligence system to prevent the financing of deforestation rather than another re-evaluation of what type of intervention is needed? It is vital that we do not waste any more time or money repeating the work of Sir Ian Cheshire and his GRI task force. This is not an excuse to wriggle out of due diligence and derogate to more reporting under frameworks such as the TNFD, which we discussed extensively at our meeting last week. I really hope to see a much more ambitious plan.
Secondly, can the Minister confirm that all forest risk commodities will be regulated under Schedule 17 to the Environment Act? Thirdly and finally, can she confirm here today a final date for when the now extremely delayed secondary regulations under Schedule 17 to the Environment Act will be made? The Treasury’s review will be limited at the moment to an investigation of how the UK finances prohibited commodities. This is fraught with problems, not least the fact that these regulations are nearly two years delayed. It also means that if the Government choose not to cover all forest risk commodities in that regime, the review will not be worth anything. For example, Defra’s June 2022 consultation proposed covering only two commodities. There were 14,000 respondents, and 99% of responses said that the law should cover all forest risk commodities, including cattle, palm oil, soy, rubber, cocoa, coffee and maize. This is the approach that the EU has taken. We risk becoming a laughing stock if our apparently world-leading secondary regulations cover only cocoa and soy, for instance.
To sum up, I am thankful that the Minister and the Economic Secretary have adopted a sensible proposal to allow the country’s financial regulators to address the threat of biodiversity loss. Our regulators should pay attention to nature because it is the bedrock of all our systems, but there is an irony to accept that an amendment merely commissioning a review into deforestation is all we are going to do. I spoke last week to the head of science at Kew, Alex Antonelli, and asked him to give me the up-to-date data from Kew about the state of deforestation across the world. He told me that illegal logging is the most important resource crime in the world and is valued at between $52 billion and $157 billion a year. Illegally obtained timber accounts for between 10% and 30% of all global timber that we all use, but in south-east Asia, central Africa and South America, between 50% and 90% is illegally obtained, so I think that the Government’s efforts need to be speeded up. But I will not oppose Motion C, and I thank the Minister for her considerations.
Lord Randall of Uxbridge (Con)
My Lords, it is a great privilege to follow the noble Baronesses, Lady Boycott and Lady Hayman. I congratulate my noble friend the Minister on her diligence in trying to come to some solution to our demands. As we have just heard, it is not quite what we wanted but it is getting there, pretty much. Personally, I am sure that the Minister shares our concerns, but sometimes the Treasury is a bit like one’s parents in saying, “You can’t have it all at once; you have to wait and be ready for it”.
I reiterate the questions asked by the noble Baroness, Lady Boycott, regarding regulating all forest risk commodities under the secondary regulations, and ask also for a firm date. I am delighted that we have got as far as we have but I would say, not just to my noble friend the Minister but to all other noble friends and Ministers, that we will not rest here. As we have heard, deforestation is one of the biggest crimes going on in the world and a threat to us all. We shall continue with this.
Baroness Bowles of Berkhamsted (LD)
My Lords, I first pass on the apologies of my colleague and noble friend Lady Kramer, who is unable to be in her place; hence, you have me instead. I identify with the comments made by the noble Baronesses, Lady Hayman and Lady Boycott, and will not repeat them. Although the Government have given some territory, I do not feel that it is substantial enough.
Two points in particular worry me. The first is with regard to the climate change targets and the wording that
“each regulator considers the exercise of its functions to be relevant to the making of such a contribution”.
The Minister emphasised in her introduction that the regulators have to consider that it fits in squarely with their major objectives. That is quite a discouragement to them to pursue these matters. The regulators do not have to follow every objective and principle anyway; so they do not have an objective or principle and this has now been further diluted by that wording. So, while it is good that there is something on the face of the Bill, a lot of following up will be needed to make sure that something happens.
When it comes to the forestry issues, yes, there will be another consultation—another delay—but why do we have to be in lockstep with our partners? I thought we wanted to be leaders. That means you have to be prepared to go out there and, if you are a leading financial centre, show that it can be done. To always tie ourselves down, to be in lockstep, means that there is a fear to move, there is trepidation, and that does not mark us out or distinguish us as a financial centre. I therefore hope for better, and I hope that comes out of the Treasury’s review.
Overall, the Bill has seen issues raised on all sides of the House and a lot of common thinking. Yes, there has been some yielding by the Government as a consequence—though in general I would say not enough —but this shows that the mood and understanding of this House and of the industry are that the size and momentum of what we are doing in delegating everything to regulators need to have a little more beefing up when it comes to accountability and how matters can be pursued if the regulators do not do things, if they do not do them quickly enough, and so on. In quite a lot of our amendments we have tried to pursue those issues but we have got nowhere. I think that means we will be coming back.
Lord Leigh of Hurley (Con)
My Lords, I want to comment on Motion B, which no one has addressed. I congratulate the Minister, her colleagues, the Bill team and all the Peers who have contributed to this 337-page whopper of a Bill, which has been broadly welcomed by all. I remind your Lordships of my declaration of interests, which includes the fact that I am an employee of an FCA-regulated business that is currently seeking to merge with another FCA-regulated business.
That takes me to Amendment 10. Within the Bill are the important amendments to Sections 1B and 1E of FSMA 2000. Amendment 10 seeks to add subsection (2)(ca) to the already strong provisions for consumer protection in Section 1C(2)(a) to (h). I agree with my noble friend the Minister that we should not push through Amendment 10.
I can tell my noble friend the Minister and fellow Peers that in the market the Bill is desperately sought. There is still huge frustration at the FCA about the time taken to progress and execute transactions. That has been a significant block on economic growth, which is one of the objectives that the FCA will now have. I ask the Minister to ensure that the FCA is aware of its new objectives and requirements and that this actually takes place in practice.
Baroness Chapman of Darlington (Lab)
My Lords, we on these Benches supported all three of the amendments that we are discussing today when we looked at them last time, including Amendment 7, which would expand the regulatory principle on net-zero emissions to include conservation and nature. We also voted for Amendment 36, imposing a duty on those conducting regulated activity to conduct due diligence with the aim of preventing illegal deforestation.
We have listened carefully to what the Minister has said and will be listening to what she says in response to this debate, particularly to the questions asked by the noble Baroness, Lady Boycott. However, I thank the Minister for her openness in engaging with these issues and for the amendments in lieu, which demonstrate an agreement with your Lordships that these are issues that the Government need to address urgently. They may not be doing so in a way that we would have preferred today, but it is right that we acknowledge the moves that the Government have made.
Amendment 10 in my name would require the FCA to take financial inclusion into account when advancing its consumer protection objective of securing an appropriate degree of protection for consumers. The Government disagree with that amendment, saying they consider that the FCA is already able to tackle issues of financial inclusion within its remit. We argue that the problem is that the Government have failed to address our key concern in tabling the amendment, which is about the poverty premium—that is, the extra costs that poorer people pay for essential services such as insurance, loans or credit cards.
We see this Bill as something of a missed opportunity to build a strong future for our financial services and rethink financial resilience, including how some of the wider well-being issues are tackled by the regulator in the future. Everybody should be able to access the financial services they need, regardless of their income or circumstances. Although we do not intend to push this to another vote today, I can assure noble Lords that we will be returning to this subject at every opportunity—especially if that opportunity arrives in the form of a Labour Government.
For now, I place on the record our sincere thanks, particularly to the noble Baronesses, Lady Hayman and Lady Boycott, who have been highly effective in raising nature and deforestation issues. I also thank my noble friends Lord Livermore and Lord Tunnicliffe for their work on this Bill. We are probably at the end of it now. I note what the noble Lord, Lord Leigh, said about the need to get this Bill through and on to the statute books for the benefit of this important sector.
Baroness Penn (Con)
My Lords, I am grateful to noble Lords for the debate today, and I would like to address some of the points raised.
On the addition of the obligations under the Environment Act to the principle on climate change, I intended in my opening speech to clarify some of the language in that amendment. I am very happy to emphasise again the Government’s intention that the legal effect of the new provisions will be the same as the original climate principle, with the addition of the targets under the Environment Act. The intention is that it will be at least as strong as the provisions in the Financial Services Act 2021. I explained in opening the reasons for amending the language. It is not about diluting the principles or commitments, but further clarifying them, given that these are new areas.
I accept the noble Baroness’s point that often, these issues can be two sides of the same coin. We had the debate on whether the issues were sufficiently covered by just mentioning climate. Adding the explicit reference to the Environment Act targets led to a desire to be even clearer about the effect of that principle, but it has not changed in the wording of our amendment.
On Lords Amendment 36, there were questions on the timing of the provisions under Schedule 17 to the Environment Act. I am afraid that, as hard as I have tried, I cannot provide a definitive date, but I reassure noble Lords that I have met the Minister leading on this at Defra. Work is under way to bring forward those regulations, and we are seeking to do it at the earliest opportunity.
The noble Baroness, Lady Boycott, and my noble friend Lord Randall of Uxbridge asked what commodities those provisions will cover, and the noble Baroness mentioned a consultation on two forest risk commodities. My understanding is that the consultation and impact assessment covered a variety of policy options across three different turnover thresholds and seven different commodities. While I cannot pre-judge the outcome of the regulations under Schedule 17, our approach to this review will mirror the approach taken forward under Schedule 17.
On the point about the outcomes of this review, I am sure that the noble Baroness will understand that I cannot prejudge that, but I can say that it is not intended to duplicate work already being done; it should build on it. I am happy to make sure that noble Lords and other parliamentarians are involved in the progress of that review as we take it forward, so that they can see that it is heading in the right direction.
I thank the noble Baroness, Lady Chapman of Darlington, for the constructive way she has approach the Bill in its latter stages. She raised the issue of the poverty premium that can be placed in financial services. We are progressing work in areas where the poverty premium can occur. For example, we are working with Fair4All Finance, the organisation set up to use funding from dormant assets for financial inclusion, to improve access to affordable and appropriate financial products, including a package of tailored support to scale affordable credit in order to help the sector develop a sustainable model for serving people in vulnerable circumstances. We also looked at issues in the insurance industry in a number of areas, in terms of outcomes and access. We will continue to look at the areas where the poverty premium occurs, the factors that are driving it and the right levers we should think about to address it. It is different for different sectors, services and products, but that work will continue, despite our not being able to accept the noble Baroness’s amendment.
I therefore ask noble Lords not to insist on Amendments 7, 10 and 36 and to agree with the Commons in their Amendments 7A, 7B, 7C and 36A in lieu.
Baroness Penn
That this House do not insist on its Amendment 10, to which the Commons have disagreed for their Reason 10A.
Baroness Penn
That this House do not insist on its Amendment 36 and do agree with the Commons in their Amendment 36A in lieu.
“Forest risk commodities: review
(1) The Treasury must carry out a review to assess the extent to which regulation of the UK financial system is adequate for the purpose of eliminating the financing of the use of prohibited forest risk commodities.
(2) In subsection (1) the reference to “prohibited” forest risk commodities is a reference to forest risk commodities, or products derived from forest risk commodities, the use of which is prohibited by paragraph 2 of Schedule 17 to the Environment Act 2021.
(3) Having carried out a review the Treasury must lay before Parliament, and publish, a report stating—
(a) the conclusions of the review, and
(b) the steps the Treasury considers it appropriate to take to improve the effectiveness of the regulation of the UK financial system for the purpose stated in subsection (1).
(4) Subsection (3) must be complied with before the end of 9 months beginning with the day on which the first regulations under paragraph 1 of Schedule 17 to the Environment Act 2021 are made.
(5) In this section—
“forest risk commodities” has the same meaning as in Schedule 17 to the Environment Act 2021;
“UK financial system” has the same meaning as in FSMA 2000 (see section 1I of that Act).”
Economic Crime and Corporate Transparency Bill
Tuesday 27th June 2023
(10 months, 2 weeks ago)
Lords ChamberRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 138-II Second marshalled list for Report - (23 Jun 2023)
19:15 - Division on Amendment 110 - Ayes: 179 / Noes: 176 - Amendment 110 agreed.
19:35 - Division on Amendment 125A - Ayes: 176 / Noes: 160 - Amendment 125A agreed.
19:55 - Division on Amendment 129 - Ayes: 164 / Noes: 150 - Amendment 129 agreed.
Lord Sharpe of Epsom
That the Bill be further considered on Report.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I put on record my thanks to my noble friend Lord Johnson of Lainston, who took the Bill through its first day of Report last week, and my noble and learned friend Lord Bellamy for his work in the run-up to today’s debate. I extend my thanks to noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. This collaboration has resulted in comprehensive and much-needed legislation—
The Deputy Speaker (Baroness Bull) (CB)
Would the Minister like to move that we move on to this item of business before he moves his first amendment?
Lord Sharpe of Epsom
“(10) The Secretary of State may not make regulations under subsection (7) unless the Secretary of State has—(a) consulted the Scottish Ministers and the Department of Justice, and(b) given a notice containing the relevant information to the Scottish Ministers and the Department of Justice.(11) Consultation under subsection (10)(a) must include consultation about any effects that the Secretary of State considers the regulations may have on—(a) a person in Scotland or Northern Ireland (as the case may be) applying for the forfeiture of cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order, and(b) a sheriff or court in Scotland or a court in Northern Ireland (as the case may be) considering such an application or making an order for such forfeiture. (12) In subsection (10)(b) “relevant information” means—(a) a description of—(i) the process undertaken in order to comply with subsection (10)(a) in relation to the Scottish Ministers or the Department of Justice (as the case may be), and(ii) any agreement, objection or other views expressed as part of that process by the Scottish Ministers or the Department of Justice (as the case may be), and(b) an explanation of whether and how such views have been taken into account in the regulations (including, in a case where the Secretary of State proposes to make the regulations despite an objection, an explanation of the reasons for doing so).”Member’s explanatory statement
This amendment provides for certain consultation requirements to apply before regulations may be made under inserted section 303Z42(7) of the Proceeds of Crime Act 2002 (forfeiture orders).
Lord Sharpe of Epsom (Con)
As I was saying, I put on record my thanks to my noble friend Lord Johnson of Lainston and my noble and learned friend Lord Bellamy, but I also extend my thanks to all noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. It is nice to be able to say that more than once. This collaboration has resulted in comprehensive and much-needed legislation. As my noble friend Lord Johnson set out, the Government listened to the views of the House during the passage of the Bill and have moved to address many of its concerns in the amendments tabled for Report.
Baroness Altmann (Con)
My Lords, briefly, I congratulate the Government on bringing forward the amendments; they will enhance the operation of the Bill. However, while we debate what could cover so-called crypto assets, I want to put on record my concern that by calling them “assets” and by not banning them from conventional financial markets we are potentially encouraging economic actors and criminals who demand payment in these untraceable types of so-called money. There is a danger to both our financial system and society if we continue to try to suggest that they are, in any way, conventional media of exchange.
Lord Fox (LD)
My Lords, I reflect back the point made at the beginning by the Minister—in fact, made in triplicate—that this has been a co-operative approach. In fact, I was one of the people who raised the issue of crypto assets at the beginning. There was good consultation with the team involved, and the Government brought forward a number of amendments in Committee and on Report.
As the Minister acknowledged, the issue is going to have to be flexibility going forward, and the ability to make changes and to understand how criminals are using crypto assets and other assets to commit fraud will be very important. Having the ability to come back to Parliament and make those changes will be key to the success of this Bill. In that respect, anything that improves flexibility, as I think these amendments do, will be very helpful.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I reiterate what the noble Baroness, Lady Altmann, and the noble Lord, Lord Fox, have said: there has been a co-operative approach to this Bill, which I think will make it a better Bill. I was going to make exactly the points that the noble Lord, Lord Fox, has just made about the need to build in a way of feeding back to Parliament, particularly given that crypto assets are a very turbulent technology; it is a very turbulent industry. We know about the criminality endemic within these types of so-called assets. The point has been made by the noble Lord, Lord Fox, that Parliament needs to find a way, through flexibility and feedback, to make sure that the appropriate regulations are kept in place.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords for their brief points in this debate. Broadly speaking, I agree with all the points that have been made. It is important to maintain a high level of flexibility, because this is a very fast-moving space technologically as well as with regard to the use of these assets in the broader economy and for other purposes. I agree with everything that has been said. Obviously, these amendments allow us to maintain a high degree of flexibility, so I ask noble Lords to support them. There is not much point in saying anything else at this point.
Lord Sharpe of Epsom
(3) Provision made by virtue of sub-paragraph (2) may in particular refer to a list of countries published by the Financial Action Task Force as it has effect from time to time.”Member’s explanatory statement
This removes the power to make regulations about enhanced customer due diligence by reference to a list of high-risk countries published by the Treasury. Instead it allows regulations to refer to a list of countries published by the Financial Action Task Force (the regulations could also refer to that list subject to specified exceptions).
Lord Sharpe of Epsom
(a) in subsection (2), for the first “which” substitute “made during the period of 6 months beginning with the day on which the Economic Crime and Corporate Transparency Act 2023 is passed if the instrument”; (b) in subsection (9), for the words from “if” to the end substitute “if they only make provision prescribing high-risk countries by virtue of paragraph 4(2) of Schedule 2”.Member’s explanatory statement
This amendment means that regulations made within 6 months of royal assent are subject to the made affirmative procedure if all they do is make provision about countries in relation to which enhanced customer due diligence measures are required to be taken; regulations made after that period are subject to the draft affirmative procedure.
Lord Faulks
“Strategic lawsuits against public participation
(1) It is an offence for a person or entity without reasonable excuse to threaten civil litigation against another person or entity with intent to suppress the publication of any information likely to be relevant to the investigation of an economic crime.(2) A person guilty of an offence under this section is liable—(a) on summary conviction in England and Wales, to a fine;(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum;(c) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both).”Member’s explanatory statement
This amendment introduces a new criminal offence to deal with groundless threats in pursuance of SLAPPS in order to suppress investigations into economic crimes.
Lord Faulks (Non-Afl)
My Lords, we now come a group of amendments about strategic lawsuits against public participation, or SLAPPs. These were much debated at Second Reading and in Grand Committee. As noble Lords will be aware, SLAPPs is the rather ungainly acronym to describe the abusive threats of litigation and actual litigation by deep-pocketed individuals with the intention of preventing journalists or others from revealing the truth, very often about economic crime or, at the very least, economic activity which the claimant would much rather was not revealed at all, or certainly not to the general public. This is a worldwide problem which has received a variable response.
In a sense, there is nothing new about SLAPPs. Powerful men have often used litigation to try to silence their critics, but there have recently been some egregious examples. The difficulty always exists in separating out genuine complaints by powerful men or organisations and those which have been commenced for a collateral purpose. When SLAPPs were debated at Second Reading, it was thought that amendments to prevent or limit such lawsuits would be outside the scope of the Bill. I am glad to say that that has now proved not to be the case, although it is clear that the relevant amendments, either mine or the Government’s, are focused on economic crime as opposed to wider areas of criminal activity which might provoke a strategic lawsuit. The Government’s position at Second Reading appeared to be that they were sympathetic to the notion of legislation in this area. However, they thought that the whole issue needed separate and mature consideration and should not be part of any amendment to this Bill.
I am delighted that the Government have changed their mind and brought forward amendments in this group which we will debate. I understand that the new Lord Chancellor has had much to do with this, and I thank him and the Minister for tabling the amendments.
A number of noble Lords have spoken about SLAPPs, including the noble Lords, Lord Agnew and Lord Cromwell, who gave a graphic description of the mischief at which any change in the law should be directed. My difficulty with any potential amendment was always that the courts have powers already to strike out abusive proceedings, but they tend to be extremely cautious about doing so, on the basis that striking out is a somewhat draconian remedy. Courts tend to be persuaded that it is better to see how the evidence emerges before putting a case out of its misery, but that can be too late. Huge expenditure will have been incurred, often by relatively impecunious defendants. Sometimes they have no realistic alternative but to capitulate—delay is plainly the friend of those who use SLAPPs. The best chance, in my experience, of striking out a claim is when there is a clear point of law, but even then there can be appeals and further expense, which work in favour of an abusive claimant.
The government amendments are clearly aimed in the right direction, but I can already foresee a few difficulties. There will be significant arguments as to what does or does not constitute a SLAPP, for example. That issue of itself has a lot of litigation potential. I am also concerned about the process of making the relevant Civil Procedure Rules. This can be a lengthy process, and is always a carefully considered process. I have studied the recent minutes of the Civil Procedure Rule Committee, so as to inform myself as to how the committee approaches rule changes. I would be grateful if the Minister could explain to the House how this amendment will make its way into the rules and the likely timescale.
Those reservations apart, my view is that we should go further. As pointed out at Second Reading by the noble Lord, Lord Thomas of Gresford, who has put his name to this amendment, there is no obvious reason why there should not be a criminal offence in this area.
I invite the House to consider a client consulting his expensive lawyers. He wants to take every step he can through litigation to suppress and exhaust the funds of those who would expose him. He utters those words which lawyers tend to love: “I don’t mind how much it costs”. The advice that he will or should receive after the government amendments become law is that there is a risk that the courts might decide to stop the litigation if it is regarded as abusive. “But”, the litigant says, correctly, “It will surely still be a lengthy and expensive process before a court even gets to consider that option”. However, if the Government were to accept my amendment, then the advice he should receive is that he risks criminal prosecution if he, without reasonable excuse, threatens litigation with the intent to suppress the publication of any information likely to be relevant to the investigation of an economic crime. This potential offence gives room for a defence, of course, but its very existence should act as a considerable deterrent against the sort of behaviour we want to stop. If this amendment becomes law then the hypothetical client might think much more carefully before threatening or embarking upon abusive litigation.
This amendment is particularly relevant to journalists, who have a huge role in tackling economic crime. I declare my interest as chair of the Independent Press Standards Organisation. It is also of importance to anyone who wants to reveal economic crime. It is entirely consistent with the aims of the Bill. Let us bear in mind that the opportunity to legislate in this space is unlikely to present itself again, or at least not for some time. I beg to move.
Lord Thomas of Gresford (LD)
My Lords, I remind your Lordships that, at Second Reading of this Bill, on 8 February, I referred to a legal action brought by Yevgeny Prigozhin, founder of the Wagner Group, who has been somewhat in the news over the last weekend, against the journalist Eliot Higgins, who had investigated his activities. When his case was justly struck out last May, Prigozhin said that he brought court cases against journalists because
“in any issue there should be room for sport”.
The cost to Mr Higgins was in the region of £70,000, although he won his case. That is the sort of abuse of the English legal system that the current crop of so-called reputational lawyers have brought on behalf of Russian oligarchs and many other large co-operations that resent too close a look into their operations.
Lord Cromwell (CB)
My Lords, I start by sincerely thanking the noble and learned Lord, Lord Bellamy, and his team for meeting me and others to discuss SLAPPs and for the subsequent correspondence with me on areas of concern that remain, to some of which I will return briefly in a few moments.
As noble Lords will know, I have been rather tenacious in arguing for the inclusion of provisions against SLAPPs in the Bill, so I welcome government Amendments 102 and 103 before us today. They reflect positive listening by the Government, in particular the new Lord Chancellor, to a long campaign by Members of both Houses, as well as a coalition of non-governmental organisations. The amendments do not deliver everywhere —Scotland is excluded, I believe—nor do they cover everything that I and others have been seeking. I shall put these, as succinctly as I can, on the record.
My main concern, because it goes to the heart of SLAPP tactics, is the lack of sufficient provision in Amendment 102 for the courts to bring matters to a halt pending a decision on striking out under subsection (1) of the new clause inserted by the amendment. In his letter to me on this point, the Minister characterised such an approach as unfair and restrictive on the court, but as others have said, those using SLAPPs will do all they can to run up the costs of their opponent, not as a route to justice but as a tool of harassment. For example, in relation to new subsection (1)(b) in the amendment, deliberate pursuance of disclosure pending resolution of an anti-SLAPP motion can easily ratchet up costs.
To be effective in assessing cases and in preventing SLAPPs, to which Amendment 102 is directed, the court should be inclined to call a halt to the litigation process until it is decided whether the case should be struck out. I therefore ask the Minister whether he agrees that the courts, guided by the Civil Procedure Rules, should as a default position take the approach of putting a stop on proceedings pending a decision on striking out and allowing processes to proceed only where a very compelling reason exists for them to do so.
On Amendment 103, subsection (1)(d) of the new clause inserted by the amendment refers to harassment, expense and other harms which are
“beyond that ordinarily encountered in the course of properly conducted litigation”.
It is exactly the use of so-called “properly conducted litigation” that SLAPPers weaponise in order to intimidate their victims. While some amount of emotional and financial cost is inevitable in court proceedings, I do not accept that harassment should ever be part of properly conducted litigation. The phrasing of the amendment appears to suggest that it is acceptable. This creates a significant opportunity for the SLAPPer’s legal team to claim its harassment tactics are just part of the machismo and cut and thrust of legal process and, perhaps, as if a bit of harassment never really hurt anyone. That is the bully’s excuse.
It also leaves the courts struggling to make a subjective judgment about what is in the minds of the claimant and the defendant. In his helpful letter to me, the Minister stated that the courts are well versed in deciding such matters. However, I remind the House, as I elaborated at some length in Committee, that courts have always been very shy of inferring intention, and I am not aware of any instance where a court has struck out a case for improper purpose.
Even the recent case involving Charlotte Leslie and Mr Amersi was thrown out pursuant to CPR part 3.4 —namely, that the statement of case disclosed no reasonable grounds for bringing the claim. The court judgment was explicit that the court was not making a decision on whether the case constituted an abuse of process. The most the court judgment was willing to say was that there were several aspects of Amersi’s behaviour which gave “real cause for concern” that it was brought with an improper purpose. That illustrates how high a hurdle the test for improper purpose currently is.
The courts’ hands need to be strengthened here. Unless we enable the courts more effectively to label an action as an abuse of process, the current shyness about ever striking out a case on those grounds seems set to continue. I therefore ask the Government to reconsider my suggestion, which I have written to the Minister about, that the phrase about “properly conducted litigation” is removed and that the court, in considering the claimant’s behaviour, should decide if it could be reasonably understood as
“intended to cause the defendant … harassment”,
et cetera.
I have two other brief points. I understand that the intention of subsection (3) of the new clause inserted by Amendment 103 is to draw a wide definition of economic crime. However, in practice, it puts a potentially costly burden on the defendant to show that it is a SLAPP, and to require a subjective, and perhaps lengthy, assessment of intent by the court. Above all, it seems redundant, because subsection (1)(d) already establishes whether a case is a SLAPP. I therefore hope that the Minister will consider a revised drafting in order to encompass the purpose of having a wide definition of economic crime while not creating a new area of difficulty for the defendant.
Finally, subsection (4) of the new clause inserted by Amendment 103 covers factors for the court to take into account. It misses a typical SLAPP intimidatory tactic of bringing an action against individuals as well as their publishers. An example of the latter is the case brought in the UK against Swedish investigative journalists by a Swedish business. By bringing the claim in the UK, the claimant was able to sue not only the publication and its editor but the journalists as individuals. This would not have been possible in Sweden where, tellingly, the claimant decided not to sue. Individuals do not typically have legal insurance, and bringing individual action in this way is a classic intimidatory tactic. I therefore urge the Minister to include this as a factor for the court to take into account under subsection (4).
In conclusion, like the song by Messrs Jagger and Richards says,
“You can’t always get what you want
But if you try sometime …
You get what you need”,
these amendments give us a good chunk of what we need. By highlighting SLAPPs as unacceptable, they will make lawyers think harder about engaging in SLAPP tactics, as the noble Lord, Lord Faulks, highlighted. It is a great start, but there is more to do, as I and others have tried to outline today. I hope that these points will yet be reconsidered, either in the other place or in the wider legislation on this subject that the Government have promised. I look forward to the Minister’s response.
Lord Garnier (Con)
My Lords, I too declare an interest as a member of the Bar who has, over the past several decades, specialised in defamation.
I agree with quite a lot of what the noble Lord, Lord Cromwell, has just said in that, first, this is in essence economically driven; and that, secondly, the decision in Amersi v Leslie and others did not designate that particular claim as a SLAPP. None the less, there was plenty in the judgment of Mr Justice Nicklin to demonstrate that the judge was quite acute about the motivation behind the claim. Essentially, it was a claim that he considered to be bullying and designed to cause the defendants the most financial embarrassment possible; he saw through that.
Baroness Stowell of Beeston (Con)
My Lords, I am pleased to hear my noble and learned friend say that he has changed his position since we met in Grand Committee because I recall that, during those debates, he was strong in his view and mildly critical of those of us who had brought forward amendments.
I have two amendments in this group, Amendments 125H and 125J. I will speak to them but, before I do, I join my noble and learned friend Lord Garnier in welcoming the amendments tabled by my noble and learned friend the Minister. I am very pleased to see them; they go a long way to addressing the concerns that my committee—I declare my interest as chairman of the Communications and Digital Select Committee—has raised in our hearings on this topic over the past 12 months. As has been acknowledged, those amendments are confined to economic crime but that is because this is a Bill about economic crime, so I am happy to accept them as far as they go.
None the less, I want to highlight something that my amendments, the same amendments that I tabled in Committee, refer to—the power of deterrence with regard to the solicitors who represent those who bring forward these forms of legal action. I listened very carefully to my noble friend Lord Faulks introducing his amendment. Unlike my noble and learned friend Lord Garnier, I find his arguments quite compelling, but at this point I am pleased with what we have here. The importance of deterrence and the link between the Solicitors Regulation Authority’s new fining powers, the tactics employed by those who bring SLAPPs and the new dismissal mechanism are where I want to focus my comments.
As we have heard, the Government’s amendments bring much-needed legal clarity about the definition of a SLAPP case. The new strike-out clause includes a likelihood test but not a requirement for the case to be shown to have merit. That is a bit of a gap. It suggests that well-to-do law firms could still threaten journalists with a defamation case that has no merit and force the journalist to deal with huge legal costs. As we have already heard, as long as the lawyers toe the line and are not too aggressive in their tactics, they are unlikely to be thrown out under the early dismissal mechanism, but just because a case is not thrown out at the start, that does not mean everything is fine.
Most SLAPP cases never make it to a court, as we have heard. They succeed by intimidating critics into dropping their investigation at a very early stage. In these circumstances, the early dismissal test will not even come into play. One of the best defences probably lies with the solicitors’ regulator. The SRA needs to have confidence that these amendments tabled by my noble and learned friend the Minister will give it a sufficiently robust basis to penalise solicitors and law firms that pursue SLAPPs.
I understand that the SRA has powers to take action against individuals and law firms for misconduct or failing to comply with the rules. I would be grateful for clarification from my noble and learned friend the Minister that the SRA’s new unlimited fining powers, which are already in the Bill, could definitely be used to deter and punish law firms facilitating SLAPP cases, even if the case is not thrown out by the early dismissal test or does not make it to court. Let us not forget that the lawyers are making huge amounts of money from this. They know exactly what they are doing and can be very clever about getting away with it. We need confidence and assurances that the regulator will be able to take robust enforcement action, as we in Parliament need to be able to set a clear expectation of the regulators that they will be proactive in asking people to come forward with concerns, process complaints speedily and investigate high-risk firms to put them on notice.
Above all, the SRA needs to enforce the spirit of the law, not just the letter, by demonstrating zero tolerance for those profiting from flagrant abuses of our legal system. From my noble and learned friend the Minister, I am looking for clarity at the Dispatch Box that the fining powers that the SRA now has in the Bill and this new definition of SLAPPs empower it to act against law firms if it considers it appropriate to do so because they have breached its codes and so on. We are not looking for a situation in which it is possible for the SRA not to do what is properly expected of it just because it has not been spelled out in words of one syllable in the Bill.
In my view, it is really important for any regulator or regulated sector to understand that the members of it and those who are regulating it have a responsibility to uphold the reputation of that sector. That is done by the way in which they conduct their business. It is important that that is made very clear if the Government bring forward this definition of SLAPPs, as they have, to try to prevent further use of this aggressive and abusive form of legal action, which is doing so much to undermine the Government’s overall intention to reduce economic crime.
Lord Thomas of Cwmgiedd (CB)
My Lords, I am grateful to the Minister and I welcome the amendment he has put forward. I want to make three quick points.
First, it is clear that the will of the House is that something should be done quickly. The remedy should be speedy, inexpensive and flexible. This leads to my second point. The right course is to allow the rule committee to develop this, but the rules must be flexible and must allow for the development to be made judicially, rather than prescribed in rules. That, in my experience, has generally been the way forward; we have tried this in relation to other matters and know that it is impossible to lay down too many detailed things in rules. Thirdly, I hope that the Government will make available the necessary resources to the judiciary, so that this can be dealt with by a High Court or other senior judge. Speed, effectiveness and determination will show whether this is a means that will work or whether we will have to resort to that which was suggested by the first amendment that was debated.
Baroness Blake of Leeds (Lab)
My Lords, I add the thanks of our side to Ministers and their teams for the access that they have given us.
I will not say much more; we have had a full discussion and response to the concerns that were raised at Second Reading and in Committee. I believe that we are in a much better place than we were, as has been outlined by many of these contributions.
I have a few points to highlight. I honestly believe that providing the courts with powers to strike out SLAPPs would be a huge, ground-breaking step forward. We have to regard what is before us as a positive start. It is also positive that a robust threshold test has been introduced and that the profile of the defendant is not prescribed, which enables it to be used by anyone—journalists, whistleblowers, activists and academics—as we have heard.
We have to acknowledge the problems that other noble Lords have highlighted around the definition of what constitutes a SLAPP and where we will achieve that clarity. The proof will come as we move ahead, but I agree that we need to make sure of this in the rules and know when they will be available for us to consider. Perhaps the Minister can respond to this.
I want to press the Minister on an answer to when the Government expect to extend the use of protections against SLAPPs beyond the definition of economic crime as outlined. That would be very helpful for us all.
In conclusion, while limited, this is a promising framework. As I have said, the Government have committed to expanding the scope, and we all ask for this to be done speedily. I do not want to get into competing quotations from famous rock stars, but there are several we could follow. I hope that
“watch out, you might get what you’re after”,
from Talking Heads, is not one of them.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
My Lords, I am very grateful to the House and to all noble Lords who have spoken in today’s debate and in earlier debates. If I may say so, I think we have collectively changed our minds, or developed our thoughts, in various respects as a result of a collective effort, for which the Government are grateful. I am particularly grateful to those noble Lords who have engaged outside the Chamber: the noble Lords, Lord Faulks, Lord Ponsonby and Lord Cromwell, the noble and learned Lord, Lord Thomas, the noble Baroness, Lady Stowell, and others, have all contributed most constructively to the debate. There is clearly a great deal of strength of feeling on the issue of SLAPPs. It is therefore with some optimism that I hope the amendments I am about to move formally will be accepted: Amendments 102, 103, 137, 141, 142 and 143.
I will first make a general remark. In civil litigation generally, parties are not necessarily evenly matched. One may have more private resources than the other; one may be legally aided while the other is not. That is a fact of life, but one relies on the rules of procedure and the good sense of the judge to see fair play, bearing also in mind the inherent power of the court to strike out a claim for abuse of process. But when we come to SLAPPS—short for strategic litigation against public participation, a rather unwieldy phrase—two additional factors come into play. This is probably common ground in this House. In addition to the possible imbalance of power between the parties, the two additional factors are, first, the right to free speech, which is essentially what this legislation protects, and secondly the public interest in full and frank disclosure of wrongdoing.
Effectively, to use the courts or the threat of litigation as a means of preventing free speech and possibly covering up wrongdoing is a particular kind of abuse of process. It may well be that the power to control such behaviour already exists under the inherent direct jurisdiction of the courts—as I think my noble and learned friend Lord Garnier may have observed earlier—but the Government wish to put that issue beyond doubt and to put a stop to SLAPP-type tactics. We cannot allow the misuse of our legal system to suppress public interest investigations and reports. On the other hand, we have to safeguard access to justice in the measures that we take, so there is a balance to be struck here. The Government respectfully suggest that this Bill finds that balance.
I will first take the definition of SLAPPs. What is a SLAPP claim? It has a number of components. First, it will be one where the complainant has acted, or intended to act, to restrain the defendant’s exercise of their right to freedom of speech. The defendant will typically be a journalist. Secondly, the exercise of that right is a matter relating to economic crime—this is necessarily limited at the moment to economic crime because of the scope of the Bill—and for a purpose related to the pursuit of the public interest in combating such economic crime. Lastly, the claimant will have misused the litigation to cause harm to the defendant, in the circumstances defined in the clause.
For such SLAPP claims there will be several protections. First, there is the early dismissal test. The claimant will have to establish that they are more likely than not to succeed at trial. Normally, if you try to strike something out, it is you who has to establish that, but if it is a SLAPP claim, the burden is reversed and the claimant must establish that they are more likely than not to succeed at trial. That is an important change in the onus.
Secondly, there is the costs protection of the defendant, who will not have to pay the costs, even if there is eventually an adverse outcome at trial. On pre-litigation tactics, raised on a number of occasions by the noble and learned Lord, Lord Thomas, and others—it is a very fair point—in the Government’s view the costs protection and the reversal of the burden of proof very largely draw the sting of those threats. The journalist can sit back and say, “Well, do your worst. I’m protected on costs and by the change of the onus”, so the teeth are drawn from the attempt to suppress the publication of wrongdoing.
In addition—I will come to this in a moment—there are the powers of the Solicitors Regulation Authority to pursue the solicitors through its disciplinary procedures. With those protections, there is a very substantial assault by this legislation on SLAPPs. The Government’s view is that the courts will have the necessary tools and guidance from Parliament to deal with SLAPP lawsuits aimed at stifling freedom of speech and preventing journalists exposing economic crime.
As to the points rightly raised by the noble Lord, Lord Cromwell, that we should have gone further and so forth, the Government’s view is that we can always improve the shining hour—of course we can—but here we have, to use the words of the noble Lord, a good chunk of what is necessary. The Government’s view is that, at the moment, these provisions go far enough. As far as Scotland is concerned, discussions are continuing with our Scottish counterparts—it is a separate legal jurisdiction—and the same is true in Northern Ireland, so those matters will be pursued in due course. But the Government ask the House to accept that the provisions of this Bill as framed cut the mustard, if I may use the expression.
Of course, SLAPPs are broader than just economic crime. In answer to the question of the noble Baroness, Lady Blake, and others, the Government will come forward with completing the jigsaw as soon as a suitable legislative vehicle appears. At the moment, we are engaged in what, in another context, is called horizon scanning, to see when we can find a legislative vehicle that will do the job. This is not something the Government are going to forget about, and nor would this House allow us to do so. As soon as we can do it, we will get on to it.
It is entirely true that we now need the Civil Procedure Rules to back this up. The Civil Procedure Rule Committee will no doubt proceed as fast as it can; it is well-versed in ensuring that there are appropriate rules to make sure that legislation can have its proper effect in the courts. I have no control over the timetable of the Civil Procedure Rule Committee, but the message from this House is to get on with this as fast as we can. Indeed, if I may quickly refer to the comments of the noble and learned Lord, Lord Thomas, of course we need, as he suggests, quick, cheap and flexible procedures. One would hope that those will be developed judicially by senior judges, and that this legislation will have the desired effect. The Government have every confidence in the ability of the courts to put into effect what is the clear will of Parliament.
I turn to Amendment 94, in the name of the noble Lord, Lord Faulks. With regret, the Government, although sympathetic to the amendment’s objectives, do not feel that it would be right to criminalise access to justice in the way proposed. As the noble and learned Lord, Lord Garnier, pointed out, we have got rid of criminal libel. We have a balance to strike here. It would be very strong to say that it is, or is potentially, a criminal offence to commence proceedings in the courts. The courts have to be open. In the Government’s view, the balance to be struck here is civil, not criminal. Creating a criminal offence with such a broad application to tackle what is, in essence, a civil matter would be inappropriate. We do not have the evidence to support such a development. It would be entirely inappropriate to create a criminal offence that would not be very clearly defined and would potentially prevent access to justice—apart from, of course, establishing the criminal instead of the civil standard, which we are essentially dealing with here.
The creation of a criminal offence would go far beyond the Government’s measures and, I think, would mark a departure from other jurisdictions, to which some reference has been made. I might be wrong, but I do not know of one that has made this kind of activity a criminal offence. In the light of those comments, I invite the noble Lord to withdraw the amendment.
Amendments 125H and 125J were tabled by my noble friend Lady Stowell. I thank her again for her constructive engagement on the Bill. These amendments seek to allow the Solicitors Regulation Authority to set its own fining limit for cases of professional misconduct relating to abusive litigation brought forward to suppress reporting on economic crime.
Clause 195 removes the statutory limit on the level of financial penalty that the Law Society, which delegates the matter to the SRA, may impose, and a similar provision applies to the Scottish Solicitors’ Discipline Tribunal. The intention that my noble friend expresses is shared by the Bill, but the Government’s view is that the current drafting of these clauses, which already captures disciplinary matters relating to economic crime, covers the matters to which my noble friend referred. If the SRA can demonstrate that an abusive litigation case breached a rule specifically for economic crime or
“purposes relating to the prevention or detection of economic crime”,
that should permit it to use its new fining powers, so my noble friend’s amendments are, in the Government’s view, unnecessary.
I assure my noble friend that the Government’s intention is that this measure allows the SRA to impose fines above £25,000 against solicitors and law firms that fail to comply with the rule by taking part in or facilitating abusive litigation, whether or not such cases reach court or are struck out, provided that the SRA can establish a link between this type of misconduct and the prevention or detection of economic crime. This legislation is directed not just to cases that come to court but to pre-action threats and actions to deal with attempts to intimidate.
Lord Faulks (Non-Afl)
My Lords, the Minister quite rightly emphasised that these amendments are concerned with two fundamental points: free speech and the public interest that exists to expose wrongdoing. He also said that the power, to be further elaborated by the rules, already exists. He is absolutely right to do so. In a way, the government amendments, which I welcome, tell the courts to do what they already can do. The question is whether they go far enough.
I have already indicated that I see a great deal of litigation potential in the definition of what SLAPPs may or may not be, notwithstanding the drafting. The Minister said that, with the comfort of these new rules, editors will be able to say to their journalists, “Well, we can go ahead. Sit back and do your worst”. I wonder how realistic that is, given that a journalist seeking after truth and attempting to expose wrongdoing will nevertheless expose him, her or their journal to a considerable hurdle before there is any chance of a striking out taking place. We hope the rules will come into effect in due course to encourage courts to take that view, but my experience, sadly, is that courts are reluctant to strike out claims on the basis that it is very difficult, without evidence, to come to a conclusion that something is an abusive process.
However, I accept that, for the moment, the view is taken that this amendment to create a criminal offence goes too far. I am afraid I do not accept the characterisation that it would “criminalise access to justice”; that was a most unfortunate phrase. In fact, it would create an offence that would help prevent the suppression of the publication of any information likely to be relevant to the investigation of economic crime. That is not criminalising access to justice; that was a most unfortunate characterisation.
However, I accept that the Government are with the spirit of the debate entered into in various stages on the Bill, and that they want to encourage the courts to intervene where necessary. I accept that, although it has expressed real concern, the House does not, for the moment, want to go as far as my amendment suggests. With some reluctance, but accepting the will of the Front Benches and of the Minister, I beg leave to withdraw my amendment.
Lord Etherton
“(a) constitutes the offences of fraud, false accounting, money laundering or offences under any binding sanctions regime, whether at common law or in primary or secondary legislation,”Member’s explanatory statement
This amendment provides for a shorter and more focused definition of “economic crime” than is presently to be found in Clause 187(1) and Schedule 10.
Lord Etherton (CB)
I tabled all the amendments in this group. I am very grateful to those who have added their names to them: the noble Lords, Lord Verdirame, Lord Pannick and Lord Anderson of Ipswich. I am also very grateful to the Minister, the noble and learned Lord, Lord Bellamy, for meeting me and senior representatives of the Law Society and of the Bar Council to discuss what is now Clause 197.
All these amendments relate to the new regulatory objective in Clause 197 that amends the Legal Services Act 2007 by inserting for the Legal Services Board a new objective:
“promoting the prevention and detection of economic crime”.
As I said in Committee, this proposed new regulatory objective is extraordinarily wide and imprecise. The meaning of the word “promoting” lacks any clarity or certainty. It raises legitimate concerns about a potential lack of proportionality and overregulation by regulators, and about a lack of evidential risk as to those sectors most likely to come into contact with economic crime—for example, advisers rather than advocates. And even in the area of advisers, it is hardly likely to involve experts in the environment or town planning.
As the MoJ’s impact assessment of the new regulatory objective makes clear, the front-line regulators of the legal profession are already implicitly under a duty to ensure that lawyers are not breaching economic crime rules. The provisions in Clause 197 are merely to make explicit what is already implicit, and it is important that the Legal Services Board and the front-line regulators understand that this is the case.
The definition of economic crime for the purposes of Clause 197 is provided in Clause 187(1) by mean of cross-reference to Schedule 10, which contains a long list of statutes. This provides no focus on what is really at issue and should be the concern of regulators. That is spelled out clearly in my Amendment 95—namely,
“the offences of fraud, false accounting, money laundering or offences under any binding sanctions regime, whether at common law or in primary or secondary legislation”.
This lack of focus could well promote overregulation and a lack of proportionality.
What is needed is a clear statement from the Minister, which I would very much welcome today, on the following. First, regulators must understand that this is not a new regulatory duty but one that states explicitly what is already implicit. Secondly, there should be a focus on the particular criminal activity which is relevant: fraud, false accounting, money laundering and offences under any binding sanctions regime. Thirdly, there is a need for evidence-based regulation according to evidence of risk in particular areas of work and practice, as I described, such as transactional work rather than contentious and court-based work, and areas of advisory work which might be relevant in which economic crime might well occur. Fourthly, there will also be a need for proportionality by regulators. Fifthly, the regulators must understand, as the Minister said before, that there is to be no interference with the principle of legal professional privilege. Finally, there is a need for consultation with the profession to ensure that the new objective successfully tackles economic crime in the proportionate and evidence-based way I have described.
I hope the Minister will be able to make those points clear to the profession to enable a proper regulatory framework to work. I beg to move.
Lord Bellamy (Con)
I thank the noble and learned Lord, Lord Etherton, for his engagement on this topic throughout the Bill and for his remarks today. I briefly reiterate that the definition of economic crime is deliberately widely drawn. It applies not only to the regulatory objective but to several other clauses of the Bill, including the information-sharing measures between various financial institutions at Clauses 182 and 183. The Government do not believe that restricting that definition would be right.
It is true that there is a long list of offences in Schedule 10, including the reference to theft. Sometimes it is difficult to distinguish between fraud and theft, but I am happy to acknowledge that typical forms of theft, including low-level theft such as shoplifting or street crime or similar activities, are most unlikely to be relevant to anything in the Bill. Therefore, the Government do not feel able to change the definition of economic crime specifically for the legal sector, and the regulators must be able to respond to circumstances as they develop.
I shall address in a little more detail some of the points raised by the noble and learned Lord, Lord Etherton, this afternoon. I hope to cover all those points one way or another. First, in relation to legal professional privilege, the regulatory objective already requires adherence to professional principles under the Legal Services Act. In the Government’s view, there is no need for a specific reference to legal professional privilege, but I can make it absolutely clear that the Government do not consider that the Bill makes any difference to the principle of legal professional privilege. It is in no way an assault or attack on that fundamental principle of English law. The protection of legal professional privilege, as developed in the courts, will continue to apply in this area, as in many other areas. That is the Government’s position, and I hope that it is clear
As to how the regulatory objective and the provisions of the Bill will operate in practice, and in response to the noble and learned Lord, Lord Etherton, who made various entirely fair points, the intention and purpose of the regulatory objective is to put the onus on legal services regulators to be active in promoting and upholding adherence to the economic crime regime. The new objective will put beyond doubt and clarify that securing compliance is explicitly part of the regulatory role. We expect regulators to use all the tools available to them, but their activity should be appropriately targeted and not in any sense just a box-ticking exercise. The objective does not directly place new duties on lawyers. It is directed to the legal services regulators, and existing safeguards remain.
All those regulators will still be bound by public law principles, which will ensure that any regulation of legal services is proportionate and fair. Proportionality is particularly important. Section 3 of the Legal Services Act already requires the Legal Services Board to have regard to the principle that regulatory activity should be transparent, accountable, proportionate, consistent and targeted only for cases where action is required. The new regulatory objective on economic crime fits within this framework and existing objectives, such as supporting the rule of law, promoting the public interest and improving access to justice.
It is understood and expected that the Legal Services Board will work closely with the professions in developing guidance to support the new objective. This will include a public consultation on any necessary policy statement or guidance to ensure that the regulatory objective is implemented in a targeted and proportionate way. This will allow the LSB to capture and analyse any concerns that professional bodies or others may have, or continue to have, in relation to the new objective.
Lord Etherton (CB)
I am extremely grateful to the Minister for all those assurances. They are extremely helpful, and I do think that they will assist in settling the concerns of many of those in the legal profession. On the basis of the assurances that he has given, I am very happy to indicate that I will withdraw my amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment and my other amendments to clause 187 correct the definition of “economic crime” to include encouraging or assisting an offence under Part 2 of the Serious Crime Act, which replaced the common law offence of incitement in England and Wales and Northern Ireland.
Lord Sharpe of Epsom (Con)
My Lords, corporate criminal liability is a topic that many across the House care deeply about—
Lord Sharpe of Epsom
“(ba) constitutes an offence—(i) under Part 2 of the Serious Crime Act 2007 (England and Wales and Northern Ireland: encouraging or assisting crime) in relation to a listed offence, or(ii) under the law of Scotland of inciting the commission of a listed offence,”Member’s explanatory statement
See the explanatory statement to my first amendment to clause 187.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment is consequential on my other amendments to clause 187.
Lord Bellamy
“Power to strike out certain claimsStrategic litigation against public participation: requirement to make rules of court
(1) The power to make Civil Procedure Rules must be exercised so as to secure that Civil Procedure Rules include provision for ensuring that a claim may be struck out before trial where the court determines—(a) that the claim is a SLAPP claim (see section (Meaning of “SLAPP claim”), and (b) that the claimant has failed to show that it is more likely than not that the claim would succeed at trial.(2) Rules made in compliance with subsection (1) may include rules about how a determination under that subsection is to be made, including (in particular)—(a) rules for determining the nature and extent of the evidence that may or must be considered;(b) rules about the extent to which evidence may or must be tested;(c) rules permitting or requiring the court to determine matters of fact by way of presumptions.(3) Rules made in compliance with subsection (1) must include rules under which the court may make a determination under that subsection of its own motion.(4) The power to make Civil Procedure Rules must be exercised so as to secure that Civil Procedure Rules include provision for securing that, in respect of a SLAPP claim, a court may not order a defendant to pay the claimant’s costs except where, in the court’s view, misconduct of the defendant in relation to the claim justifies such an order.(5) The Lord Chancellor may by regulations provide for subsections (1) to (4) to apply in relation to any rules of court that may be specified in the regulations as those subsections apply in relation to Civil Procedure Rules.(6) In this section—“court” includes a tribunal;“rules of court” means rules relating to the practice and procedure of a court or tribunal.”Member’s explanatory statement
This new clause, new clause (Meaning of “SLAPP claim”) and my amendments at page 191, line 37, page 192 at line 33 and 192, line 38 provide for the making of rules of court with a view to preventing claimants from improperly using civil proceedings to restrain certain disclosures of information relating to economic crime.
Meaning of “SLAPP” claim
(1) For the purposes of section (Strategic litigation against public participation: requirement to make rules of court) a claim is a “SLAPP claim” if—(a) the claimant’s behaviour in relation to the matters complained of in the claim has, or is intended to have, the effect of restraining the defendant’s exercise of the right to freedom of speech,(b) any of the information that is or would be disclosed by the exercise of that right has to do with economic crime,(c) any part of that disclosure is or would be made for a purpose related to the public interest in combating economic crime, and(d) any of the behaviour of the claimant in relation to the matters complained of in the claim is intended to cause the defendant—(i) harassment, alarm or distress,(ii) expense, or(iii) any other harm or inconvenience,beyond that ordinarily encountered in the course of properly conducted litigation.(2) For the purposes of determining whether a claim meets the condition in subsection (1)(a) or (c), any limitation prescribed by law on the exercise of the right to freedom of speech (for example in relation to the making of defamatory statements) is to be ignored.(3) For the purposes of this section, information mentioned in subsection (1)(b) “has to do with economic crime” if— (a) it relates to behaviour or circumstances which the defendant reasonably believes (or, as the case requires, believed) to be evidence of the commission of an economic crime, or(b) the defendant has (or, as the case requires, had) reason to suspect that an economic crime may have occurred and believes (or, as the case requires, believed) that the disclosure of the information would facilitate an investigation into whether such a crime has (or had) occurred.(4) In determining whether any behaviour of the claimant falls within subsection (1)(d), the court may, in particular, take into account—(a) whether the behaviour is a disproportionate reaction to the matters complained of in the claim, including whether the costs incurred by the claimant are out of proportion to the remedy sought;(b) whether the defendant has access to fewer resources with which to defend the claim than another person against whom the claimant could have brought (but did not bring) proceedings in relation to the matters complained of in the claim;(c) any relevant failure, or anticipated failure, by the claimant to comply with a pre-action protocol, rule of court or practice direction, or to comply with or follow a rule or recommendation of a professional regulatory body.(5) For the purposes of subsection (4)(c) a failure, or anticipated failure, is “relevant” so far as it relates to—(a) the choice of jurisdiction,(b) the use of dilatory strategies,(c) the nature or amount of material sought on disclosure,(d) the way to respond to requests for comment or clarification,(e) the use of correspondence,(f) making or responding to offers to settle, or(g) the use of alternative dispute resolution procedures.(6) In this section—“court” has the same meaning as in section (Strategic litigation against public participation: requirement to make rules of court);“economic crime” has the meaning given by section 187(1);“the right to freedom of speech” means the right set out in Article 10 of the European Convention on Human Rights (freedom of expression) so far as it consists of a right to impart ideas, opinions or information by means of speech, writing or images (including in electronic form).(7) In the definition of “the right to freedom of speech” in subsection (6) “the European Convention on Human Rights” means the Convention for the Protection of Human Rights and Fundamental Freedoms agreed by the Council of Europe at Rome on 4 November 1950 as it has effect for the time being in relation to the United Kingdom.”Member’s explanatory statement
See the explanatory statement for new clause (Strategic litigation against public participation: requirement to make rules of court).
Lord Sharpe of Epsom
“Attributing criminal liability for economic crimes to certain bodiesAttributing criminal liability for economic crimes to certain bodies
(1) If a senior manager of a body corporate or partnership (“the organisation”) acting within the actual or apparent scope of their authority commits a relevant offence after this section comes into force, the organisation is also guilty of the offence.This is subject to subsection (3).(2) “Relevant offence” means an act which constitutes—(a) an offence listed in Schedule (Criminal liability of bodies: economic crimes) (“a listed offence”),(b) an attempt or conspiracy to commit a listed offence,(c) an offence—(i) under Part 2 of the Serious Crime Act 2007 (England and Wales and Northern Ireland: encouraging or assisting crime) in relation to a listed offence, or(ii) under the law of Scotland of inciting the commission of a listed offence, or(d) aiding, abetting, counselling or procuring the commission of a listed offence.(3) Where no act or omission forming part of the relevant offence took place in the United Kingdom, the organisation is not guilty of an offence under subsection (1) unless it would be guilty of the relevant offence had it carried out the acts that constituted that offence (in the location where the acts took place).(4) In this section—“body corporate” includes a body incorporated outside the United Kingdom, but does not include—(a) a corporation sole, or(b) a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;“partnership” means—(a) a partnership within the meaning of the Partnership Act 1890;(b) a limited partnership registered under the Limited Partnerships Act 1907;(c) a firm or other entity of a similar character to one within paragraph (a) or (b) formed under the law of a country or territory outside the United Kingdom;“senior manager”, in relation to a body corporate or partnership, means an individual who plays a significant role in—(a) the making of decisions about how the whole or a substantial part of the activities of the body corporate or (as the case may be) partnership are to be managed or organised, or(b) the actual managing or organising of the whole or a substantial part of those activities.”Member’s explanatory statement
This amendment sets out circumstances in which liability for an offence committed by a senior manager may be attributed to a body corporate or partnership.
Lord Sharpe of Epsom (Con)
My Lords, my apologies again for my early start on this; my enthusiasm keeps getting the better of me today.
As I was saying, corporate criminal liability is a topic that many across the House care deeply about, and one where the Government are committed to making significant reforms. I thank noble Lords for the robust and constructive debate we had in Committee on this topic and for the ongoing engagement which many noble Lords have afforded me in the weeks leading up to this debate.
I reiterate the Government’s commitment to reforming corporate criminal liability and tackling fraud. Since this Bill was introduced, significant steps forward have been taken. I hope, with the further government amendments to which I will speak shortly, noble Lords will recognise that we have gone to great lengths to strengthen the Bill in this area. In addition, government action continues outside of this Bill. The recently published Fraud Strategy further demonstrates the ongoing work across government and with partners to take action to tackle fraud.
I will speak first to government Amendments 104, 105, 106, 109, 138, 139, 140, 144 and 145, which introduce new clauses to this Bill to reform the identification doctrine. As noble Lords will be aware, the identification doctrine is outdated and ineffective in the way in which it holds corporates to account, given the breadth of business we see in the 21st century. Companies have grown tenfold since the “directing mind and will” test was devised in the 1970s. As companies have grown, their operations and governance have become spread across different areas, making it incredibly difficult to pinpoint the directing mind of a company, particularly in a large organisation. Individuals with significant authority can escape corporate liability by asserting that the directing mind and will is elsewhere.
Meanwhile, there is an unfairness here. Smaller companies, perhaps with one or two directors, have much more easily identifiable directing minds, meaning that corporate liability is more easily attributable and a prosecution is more likely to be successful. It is this inequality in the law that we need to address. The government amendments place the identification doctrine on a statutory footing for economic crimes for the first time, providing legislative certainty that senior managers are within the scope of the rule.
Under these new measures a corporate will be held liable if a senior manager has committed an offence under the new schedule, or if they have encouraged or assisted an offence by another, or have attempted or conspired to commit an offence under the schedule. The corporate will be criminally prosecuted and, if convicted, will receive a fine, in addition to any sentences imposed for individuals who are separately prosecuted and found guilty of the same offence. The reform will apply to all corporate bodies and partnerships established in England and Wales, Scotland and Northern Ireland.
These amendments build on the extensive work and consultation conducted by the Law Commission in this area. Building on feedback from prosecuting bodies, business representatives and Members of both Houses, some tweaks have been made to the Law Commission’s proposal to ensure the reform is applicable to the widest set of cases. Under the Government’s reform, economic crime is defined according to a new schedule in the Bill—introduced via Amendment 109—which reflects existing Schedule 10 but without those offences that principally apply to a corporate body, such as failure to prevent bribery.
For the purpose of these amendments, “senior management” will be defined in accordance with the well-established definition provided for in the Corporate Manslaughter and Corporate Homicide Act 2007. This model considered the senior managers’ roles and responsibilities within the relevant organisation and the level of managerial influence they might exert, rather than their job title.
The clauses tabled by the Government also seek to capture instances where a senior manager commissions or encourages a lower-ranking employee to do their “dirty work” by making it clear that the corporate can also be held liable where the senior manager encourages or assists a listed offence in the schedule.
To be clear to the House, subsection (3) of the new clause introduced by Amendment 104 ensures that criminal liability will not attach to an organisation based and operating overseas for conduct carried out wholly overseas simply because the senior manager concerned was subject to the UK’s extraterritorial jurisdiction; for instance, because that manager is a British citizen. Domestic law does not generally apply to conduct carried out wholly overseas unless the offence has some connection with the UK. This is an important matter of international legal comity.
However, some offences, wherever they are committed, can be prosecuted against individuals or organisations who have certain close connections to the UK. Subsection (3) makes sure that any such test will still apply to organisations when the new identification doctrine applies. Extending the identification doctrine test to senior management better reflects how decision-making is often dispersed across multiple controlling minds, mitigating the ability to artificially transfer, remove or create titles to escape liability. This is a positive step to increasing lines of clear governance and accountability in corporations.
Looking forward, although these government amendments are a strong step to improving corporate criminal liability laws, they are not the final step. The Government have committed in the Economic Crime Plan 2 and the Fraud Strategy to introduce reform of the identification doctrine to apply to all criminal offences. This will take place when a suitable legislative vehicle arises.
I move on now to the government amendments on failure to prevent fraud. In Committee, the Government tabled amendments which introduced a new corporate offence of failure to prevent fraud. Under the new failure to prevent offence, a large organisation will be liable to prosecution where fraud was committed by an employee for the organisation’s benefit and the organisation did not have reasonable fraud prevention procedures in place. The new offence will help to protect victims and cut crime by driving a culture change towards improved fraud prevention procedures in organisations and by holding organisations to account through prosecutions if they profit from the fraudulent actions of their employees.
Following this, noble Lords have raised further points with me on where the Government clauses could be strengthened. I have listened to the points raised, and the Government have tabled further amendments on the definition of large organisations and the treatment of subsidiaries. I thank the noble Lord, Lord Vaux of Harrowden, for bringing this point to my attention.
As I have set out on many occasions, the failure to prevent fraud offence is designed to balance the fraud prevention benefits with minimising burdens on small business. Amendments 111, 112, 113, 114, 115, 116, 118, 119, 122, 123 and 124 will help prevent companies from avoiding responsibility by moving high-risk operations into subsidiaries that fall below the size threshold for the offence. They will also ensure that groups of companies with significant resources are incentivised to take steps to prevent fraud.
First, we have made a clarification to ensure that an assessment of whether an organisation meets the size criteria, and is therefore in scope of the offence, is made cumulatively across the parent company and its subsidiaries—that is, the group—rather than being based on each individual entity. We then have to consider where liability would attach within that group. The group itself is not a legal entity so cannot be liable. It may be more appropriate for the subsidiary or the parent to be accountable directly, depending on the circumstances. We have therefore clarified that whichever of the individual entities within a group was responsible for the fraud can be directly liable for a failure to prevent fraud, in the same way as any other entity in scope of the offence.
Additionally, we have clarified that an employee of a subsidiary can be an associated person of its parent or owning company. That makes it more feasible to attach liability to the parent company should the approach of targeting the specific subsidiary be inappropriate. A test would still have to be met that the fraud by the subsidiary employee intended to benefit the parent, and the parent would have the defence that it was reasonable to take no steps to prevent the fraud—for example, if the structure was such that the parent had no say over the activities of the subsidiary.
Finally, Amendment 120 ensures that the views of the Scottish and Northern Ireland Governments are taken into account before any future changes to the offence threshold based on organisation size.
I hope noble Lords will recognise that this is a hugely meaningful package of amendments. I recognise that a number of noble Lords will have hoped the Government would go further, particularly around the threshold in the failure to prevent fraud offence. However, I stress that we have already taken tremendous strides forward. The Government firmly believe that our reforms to the identification doctrine; the introduction of a failure to prevent fraud offence covering around 50% of economic activity; measures to prevent avoidance via subsidiaries; and our existing ability to identify and prosecute fraud more easily in smaller organisations will cumulatively have the desired effect of tackling and deterring economic crime, without unnecessarily imposing billions of pounds of burdens and bureaucracy on actual or potential small businesses. I hope noble Lords can recognise the great progress we have made, and I beg to move.
Lord Garnier (Con)
My Lords, I thank my noble friend the Minister for his opening remarks and for the advance that the Government have made on two fronts. The first is by clarifying the senior management officers within a company; in doing so, they have clarified the way in which the identification doctrine can be applied in modern Britain.
As I have said on previous occasions, I have an interest to declare. I will not specifically recite it again because I did so in Committee, at Second Reading and, I think, on the three or four previous pieces of legislation into which a failure to prevent amendment could have been inserted—but of course it was not the right Bill, the right vehicle or the right time, and in fact it was just not right. So here I am again.
I shall speak to my Amendments 110 and 125A, which at the appropriate time I will move to a Division unless the Government persuade me otherwise. I am not engaging here in party politics or even in a rebellion. I am doing nothing by surprise; anyone who has followed discussions on economic crime over the last 13 years will know precisely what I am going to say. Indeed, my noble friend the Minister is adept at moving from one corridor to the next to avoid having a yet further conversation with me about my favourite subject. He has also heard all my jokes before, but not every Member of our House has had that advantage so it may be that, unless the Government accept my amendment, my little Aunt Sally will have another canter around the course. However, I will take things in stages.
First, I thank the Government, as I hope I have done —and I mean it sincerely—for their Amendments 104 to 106 and 109—essentially, the modernisation of the identification principle, so far as it goes. We are now slowly catching up with the Americans; they did something similar to this in 1912, but this is the United Kingdom and we must not rush.
Lord Vaux of Harrowden (CB)
My Lords, I will briefly add my support to the amendments proposed by the noble and learned Lord, Lord Garnier, which try to strengthen the failure to prevent clauses the Government have proposed. I welcome those clauses and the changes the Government have added at this stage. In particular, I strongly support Amendment 110, to which I have added my name, which removes the restriction of this offence to large companies.
Let us be clear what this failure to prevent offence deals with. It does not cover, for example, the use of a company’s services by fraudsters, something I greatly regret. I am sure that—along with, I hope, the noble Baroness, Lady Morgan—we will come back to this in another Bill. It actually applies only to situations where somebody associated with the company, such as an employee, commits a fraud that is intended to benefit the company. Let me emphasise that: it applies only to frauds carried out by associates such as employees or agents, and only where those frauds are effectively committed on behalf of the company. It is pretty restricted.
When I was in business, frankly, it never occurred to me that such situations were not already caught by the law. Surely, it must be a fundamental principle that a company should take reasonable steps to prevent its employees committing fraud on its behalf. But the Government seem to take a different view. Having been dragged somewhat reluctantly into putting forward their own amendments to create this offence of failure to prevent, they have decided it should apply only to larger companies. As we have heard, they have set the threshold so that less than 1% will be covered.
The argument, as we have heard, is that the cost would be disproportionate. The Government have come up with some costings to support this. I am afraid I do not think I am the only person who simply does not find those costings credible. Any reputable company should, and I believe generally will, be doing this already. There are some things we should ensure that companies do anyway. A good example is that companies must ensure that health and safety rules are followed. It is not an excuse to say, “It wasn’t me; an employee caused the accident”. Nor is it an excuse to say, “My company is too small to follow health and safety rules”. We do not give small companies an exemption from health and safety, tax evasion or bribery legislation. Why would we do so, uniquely, for fraud—committed on the company’s behalf?
If the Government are genuinely worried about the cost, they can deal with that easily enough by issuing timely guidance that sets out what steps would be reasonable and the circumstances in which no additional procedures would be required, which is likely to be the case for most small enterprises. Amendment 125D makes some sensible suggestions in that regard.
Lord Leigh of Hurley (Con)
My Lords, my noble and learned friend Lord Garnier wonders why the noble Baroness, Lady Bennett of Manor Castle, supports his amendment. I have heard wags tell me that he is referred to as a Green Peer, on account of the number of times he recycles his gags. That might be a little unfair—I hear disapproval, but never mind.
I will speak to these amendments, having followed the Bill extremely closely. The noble Lord, Lord Vaux of Harrowden, is of course right to pinpoint what we are debating: fraud perpetrated to benefit a relevant body. However, the noble Lord actually said “on the company’s behalf”, and that is not right. I do not think it is necessarily to capture exclusively where a company seeks to benefit itself; it could also, quite rightly, seek to capture an employee who commits fraud to benefit himself or herself because of a bonus arrangement or other matters. So it is not just on a company’s behalf.
In Grand Committee and elsewhere, I have argued that there should be exemptions for small and medium-sized companies, in opposition to Amendment 110. I totally agree with my noble and learned friend Lord Garnier that the numbers proposed by the Government—any two of the following: a turnover of £36 million; a balance sheet of £18 million, which is undefined; and 250 employees, which is easy to define—are not appropriate. As he said, they capture only 0.5% of companies, but of course they capture the most important companies, which is where this legislation is perhaps intended to attack—it covers pretty much every FTSE and AIM company, which would perhaps have someone to put their mind to undertaking a fraud.
Although I have reservations about Amendment 110, curiously enough I support my noble and learned friend Lord Garnier’s Amendment 117, which is eminently sensible and deals with the issue. He has specified a turnover of more than £10 million, a balance sheet of more than £3 million, and more than 25 employees, which is sensible and fair. However, that applies only to fraud. His Amendment 125D does not have any SME exemption but simply says that the Secretary of State must issue guidance specifically for SMEs and particular micro-enterprises. He recognises that there is a difference for SMEs and micro-enterprises, and I think we should do so. I am nervous about this legislation: we just do not know what that regulation might be and do not understand what the guidance might be, how it might work and what effect it will have on SMEs and micro-enterprises.
I had a micro-enterprise at one point; I started a business. I refer your Lordships to the register of interests, which discloses that the business grew quite substantially, but it was originally micro by any definition. I do not know how many of your Lordships have started and run a micro-business, where everything revolves around survival and one’s entire life revolves around next week’s and next month’s wages, paying suppliers and creditors, and dealing with HMRC. There are so many pressures on micro-businesses, growing through to SME businesses, and we should think very carefully about putting another hurdle in place, however small, that makes an entrepreneur say, “You know what? Maybe I won’t bother. The Government are saying that I’ve got to take care about failure to prevent fraud. Really? Is that something I should worry about at this micro level? Have I not got enough to do to try to survive?”
I urge caution in adopting Amendment 110. If it is passed, I urge the House to adopt Amendment 117. I would be very careful about adopting Amendment 125 without clarification of exactly what will be in Amendment 125B.
Baroness Morgan of Cotes (Con)
My Lords, I will speak briefly to this group. I thank my noble friend the Minister for the steps that the Government have taken in relation to the failure to prevent fraud offence and the identification doctrine. These are significant steps, and he is right to say that they will obviously be followed up in future Bills.
It is worth remembering the scale of fraud in England and Wales in particular. Some 40% of crime is fraud against individuals, and clearly the scale of the cases against small, medium-sized and large businesses is also devastating. On Friday, we will debate the wider issues relating to fraud looked at by the committee on digital fraud, which I was privileged to chair. I am grateful that, from that committee and the work with my noble friend, the Fraud Strategy was published in early May.
I support my noble and learned friend Lord Garnier’s Amendment 110 and the associated Amendment 121, and have added my name to them. He and the noble Lord, Lord Vaux, set out clearly why these amendments are necessary. There is no SME exemption in the Bribery Act or in relation to tax evasion.
I want to take on one of the points raised by my noble friend Lord Leigh. He talked about the survival of SMEs, and he is of course right to do so. I have not set up a small business but I have set up a small charity, and many of the issues are similar. If that small business or small charity were the victim of fraud, it would be absolutely devastating. One of the arguments here is the burden on small businesses of having to set up fraud-prevention measures, but they have to do it anyway these days because they have to be very cautious about anyone attempting invoice fraud or utility fraud. If they have an employee, they have to make sure that they are making best use and correct use of the corporate credit card, for example.
Noble Lords rightly referred to Clause 192 and the guidance that the Government will publish. We already have an example of it, as the Government have published the outline of how it would look. If this amendment is passed, it would be perfectly within the rights of the Government to set out clearly how that guidance should be interpreted by small and medium-sized enterprises, which are quite used to reading extensive amounts of guidance. If we want to have a broader debate about red tape and regulation, that is perhaps for another day, but they are used to dealing with much guidance. If they are likely to be victims of fraud, they will take that guidance very seriously.
I support these amendments and I support my noble and learned friend’s Amendment 125A on expanding the failure to prevent offence to money laundering. If we are going to introduce the failure to prevent offence, which I thoroughly welcome, we might as well do it properly and expand it to money laundering, which is also a huge a problem and one that the Bill seeks to tackle as well.
Baroness Bowles of Berkhamsted (LD)
My Lords, my name is on several amendments relating to failure to prevent fraud, and I support what has been said already and what was said extensively in Grand Committee on both failure to prevent fraud and the identification doctrine. If the noble and learned Lord, Lord Garnier, moves his Amendments 110 and 125A, we on these Benches will support them.
I retabled my amendment on regulatory failure to prevent, which was well supported in Committee. I do not intend to move it but I have tabled it as a reminder that we have not yet covered the enablers, as the noble Lord, Lord Vaux, spoke about. This is probably the best route to do so, with regulators being perhaps best able to understand where actions could or could not have been taken. This recommendation was encompassed within the Fraud Act report.
We have, I suppose, gone a long way, and the Government have gone a long way within the remit covered by the Law Commission, which unfortunately included the harm aspect. As a lot of the crime that has come about through this enabling channel has been since that report was commissioned, this is unfinished business; we will necessarily have to come to this again. For now, we should strengthen the government proposals through Amendments 110 and 125A.
Baroness Blake of Leeds (Lab)
My Lords, I start by acknowledging the great progress that has been made on the failure to prevent process through the debates in the House of Commons. There was significant movement there, which we of course welcome.
I say at the outset that if the noble and learned Lord, Lord Garnier, is minded to divide the House on Amendments 110 and 125A, he will have the support of these Benches. There are very good reasons for that, as have been outlined in the debate today. The statistics, particularly the 0.5% figure, are startling. Surely, we all need to take this incredibly seriously if, as the noble Baroness, Lady Morgan, said, we are serious about tackling the wider fraud issues, which seem to be growing daily. The numbers of people we all know personally who are affected by this shows the sheer extent of the problem.
I will make the very strong point that the issue of costs and burdens on SMEs has been overemphasised. If these processes are tightened in the way proposed, those very businesses will themselves be protected by the action taken on other companies. In particular, I completely support the extension to the money laundering provision in Amendment 125A.
We have had a really good debate throughout our proceedings on these measures. It would be so disappointing if, at this final stage, we did not go the full distance we can at this point, recognising, as we know, that more will need to be done in the future. We have the opportunity now and we should seize it.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords for their contributions to today’s debate on corporate criminal liability and for their continued engagement on this subject. These conversations have been robust and constructive and have helped the Government immensely in the development of the clauses —developed, I say to the noble Lord, Lord Vaux, without any reluctance at all.
I turn to Amendments 135 and 125G on senior manager liability, tabled by my noble and learned friend Lord Garnier. As he has noted, senior managers hold a higher level of responsibility than ordinary employees in conducting business because they take important decisions on the corporate policy, strategy and operation of the company. The extension of the identification doctrine to senior management in Amendment 104, which I spoke to previously, recognises this. To reflect the heightened responsibility of a senior manager in the actions of a corporation, powers are available already to prosecutors to hold a senior manager liable where a company conducts an economic crime offence.
Under the fraud, theft and bribery Acts and the money laundering regulations 2017, senior officers, including managers, are liable if they consent to or connive in fraud, theft, bribery or money laundering regulatory breaches. This extends as far as the senior manager knowingly turning a blind eye to offending, extending beyond the usual law on accessory liability for other crimes. If a senior manager is guilty of the offence and liable, they can be proceeded against and punished accordingly, including by imprisonment.
Additionally, in the regulatory space, the senior managers and certification regime is in place to improve good corporate behaviour and compliance in the sectors regulated by the Financial Conduct Authority and Prudential Regulation Authority, placing specific requirements on senior managers to encourage positive corporate behaviour.
Lord Garnier (Con)
My Lords, I thank my noble friend the Minister for his patience and tolerance in listening to my arguments over and over again—
Lord Fox (LD)
I am sorry, but it was the amendment of the noble Lord, Lord Sharpe, that was being moved.
Lord Garnier (Con)
We both seem to be making as many mistakes as each other.
Lord Sharpe of Epsom
“Power to amend list of economic crimes
(1) The Secretary of State may by regulations amend Schedule (Criminal liability of bodies: economic crimes) by—(a) removing an offence from the list in the Schedule, or(b) adding an offence to that list.(2) The power in subsection (1) is exercisable by the Scottish Ministers (and not by the Secretary of State) so far as it may be used to make provision that would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament.(3) The power in subsection (1) is exercisable by the Department of Justice in Northern Ireland (and not by the Secretary of State) so far as it may be used to make provision that—(a) would be within the legislative competence of the Northern Ireland Assembly if contained in an Act of that Assembly, and(b) would not, if contained in a Bill for an Act of the Northern Ireland Assembly, result in the Bill requiring the consent of the Secretary of State.(4) The Secretary of State may from time to time by regulations restate Schedule (Criminal liability of bodies: economic crimes) as amended by virtue of subsection (1) to (3) (without changing the effect of the Schedule).”Member’s explanatory statement
See the explanatory statement for new Clause (Attributing criminal liability for economic crimes to certain bodies).
“Offences under section (Attributing criminal liability for economic crimes to certain bodies) committed by partnerships
(1) Proceedings for an offence alleged to have been committed by a partnership by virtue of section (Attributing criminal liability for economic crimes to certain bodies) must be brought in the name of the partnership (and not in that of any of the partners).(2) For the purposes of such proceedings—(a) rules of court relating to the service of documents have effect as if the partnership were a body corporate, and(b) the following provisions apply as they apply in relation to a body corporate—(i) section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates’ Courts Act 1980;(ii) section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26));(iii) sections 34(2), 66(6AA) and 72D(2) of the Criminal Procedure (Scotland) Act 1995.(3) A fine imposed on the partnership on its conviction for an offence committed by virtue of section (Attributing criminal liability for economic crimes to certain bodies) is to be paid out of the partnership assets.(4) In this section “partnership” has the same meaning as in section (Attributing criminal liability for economic crimes to certain bodies).”Member’s explanatory statement
This amendment makes provision in relation to offences committed by partnerships by virtue of section (Attributing criminal liability for economic crimes of certain bodies).
Lord Alton of Liverpool
“Duty to disclose funds and economic resources
After section 16 of the Sanctions and Anti-Money Laundering Act 2018, insert—“16A Duty to disclose funds and economic resources(1) Any regulations made under section 1 (power to make sanctions regulations) must, for the purposes of preventing an offence under those regulations, make provision requiring designated persons—(a) to report to the Treasury or another competent authority, within three months after such regulations are made or within three months from the date of designation, whichever is the latest, the funds or economic resources that—(i) are currently held, owned or controlled by them within the United Kingdom, and(ii) were held, owned or controlled by them within the United Kingdom six months prior to the date of designation, and(b) to cooperate with the Treasury or other competent authority in any verification of such information.(2) A failure to comply with a requirement in subsection (1) may be considered as participation in activities the object or effect of which is (whether directly or indirectly) to circumvent such requirement.(3) Where a designated person has been convicted of an offence by virtue of subsection (2), a court proceeding under section 6, 92 or 156 of the Proceeds of Crime Act 2002 (confiscation orders) must consider such person as benefitting by the value of any assets concealed through such criminal conduct. (4) Assets concealed as a result of a failure to comply with a requirement in subsection (1) constitute recoverable property for the purposes of Part 5 of the Proceeds of Crime Act 2002 (civil recovery of the proceeds etc. of unlawful conduct).(5) A court may only make an order for the confiscation or forfeiture of concealed assets if, or to the extent that, it would not be just and equitable to require the designated person to pay the amount recoverable under subsection (3) or to forfeit the property recoverable under subsection (4).(6) Regulations under subsection (1) may also be made in relation to a person who is subject to an International Criminal Court warrant for an offence that would constitute an economic crime in the United Kingdom.””Member’s explanatory statement
This amendment says that sanctions regulations must, for the purposes of preventing an offence under those regulations, require designated persons to disclose all assets they own or control in the UK. Failure to disclose such assets is defined as a form of sanctions evasion, which is already criminalized under UK law, and which could result in asset recovery under the Proceeds of Crime Act.
Lord Alton of Liverpool (CB)
Amendment 107 enjoys all-party support, and its purpose is to insert a new clause imposing a duty to disclose funds and economic resources. In a nutshell, the amendment would require that sanctions regulations must, for the purposes of preventing an offence under those regulations, require designated persons to disclose all assets that they own or control in the United Kingdom. Failure to disclose such assets is defined as a form of sanctions evasion, which is already criminalised under UK law and which could result in asset recovery under the Proceeds of Crime Act.
The amendment is in line with the one debated in Grand Committee. One change has been made to reflect the Minister’s helpful view about proportionality— I am particularly grateful to the noble and learned Lord, Lord Garnier, and the noble Lord, Lord Faulks, for their helpful suggestion that the best way in which to ensure proportionality would be to incorporate the words “just and equitable”, as we have done in the revised amendment. In thanking the noble Lord and the noble and learned Lord, I thank also the co-sponsors, the noble Lords, Lord Leigh of Hurley, Lord Coaker and Lord Fox. Their input and wisdom have been invaluable. The Minister and his really excellent Bill team have engaged through meetings and in a flurry of emails and exchanges, which have been admirable, and I am grateful to them too. I hope that we can come to an amicable conclusion this evening.
The topicality and urgency of this amendment was underlined by the Statement made in another place yesterday, and repeated here last night, on the Ukraine Recovery Conference. We have all been shocked by the sheer scale of the destruction unleashed by Putin’s illegal war—the massive loss of life and the ruination of cities, towns and villages, and the destruction of the country’s agricultural base. In this lamentable context, we are right to plan for the future. The European Union has set aside a €50 billion recovery fund, and the United Kingdom has said that we will provide loans worth $3 billion over the next three years. Globally, some 500 businesses from 42 countries have pledged more than $5.2 trillion to back Ukraine’s recovery. However, as the Prime Minister made clear to that conference, Russia must pay for the destruction that it has inflicted. In that respect, the Foreign Secretary has said that the United Kingdom is working with allies to explore lawful routes to use frozen and immobilised Russian assets to fund Ukrainian reconstruction. It was to enable that to happen that the movers of this amendment raised this question in Grand Committee.
Lord Fox (LD)
My Lords, I am pleased to support the amendment in the name of my noble friend. If I do not speak at length, it is not because I do not think it a very important amendment but because I am trying to infect the rest of the House with some brevity—unsuccessfully, I suspect. This is an important amendment and we have seen movement in other regimes. We have seen movement in the United States; we are seeing movement in the European Union; and I think we have seen movement in the House of Commons on the Procurement Bill, to which we have started to see changes in attitude. I hope we will hear from the Minister shortly that the Government are prepared to move, in order that we can bank a step in the right direction along this path. I look forward to hearing what the Minister has to say, and I hope this amendment will not have to be pressed if we hear what we want to hear.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Alton of Liverpool, for this amendment, for his constructive engagement throughout the passage of the Bill through this House and, of course, for his typically thoughtful and powerful introduction. I also pay tribute to noble Lords from all sides of the House, and Members in the other place, for continuing to pursue this important issue and engage with the Government on a cross-party basis, not least the APPG on Anti-Corruption and Responsible Tax. I can reassure the noble Lord that the Government are supportive of mechanisms to deprive sanctioned individuals, where appropriate, of their assets, with a view to funding the recovery and reconstruction of Ukraine. More broadly, the Government want to drive further transparency on assets held by sanctioned persons in the UK.
On 19 June, the Government announced four new commitments which reaffirm that Russia must pay for the long-term reconstruction of Ukraine. This includes new legislation, laid the same day by the Foreign Secretary, to enable sanctions to remain in place until Russia pays compensation for damage caused. In this announcement the Government also confirmed that we will lay new legislation requiring persons and entities in the UK, or UK persons and entities overseas, who are designated under the Russia financial sanctions regime to disclose any assets they hold in the UK. The Government are firmly committed to bringing forward this secondary legislation, subject to the made affirmative procedure, and to introducing this measure before the end of 2023, subject to the usual parliamentary scheduling. This will strengthen transparency of assets and make it clear that the UK will not allow assets to be hidden in this country.
Sanctioned individuals who fail to disclose their assets could receive a financial penalty or have their assets confiscated. This demonstrates our continued commitment to penalising those who make deliberate attempts to conceal funds or economic resources. The new power builds on and strengthens the UK’s existing powers around transparency of designated persons’ assets. HMG already use the annual review of the Office of Financial Sanctions Implementation, known as OFSI, to collect and detail assets frozen under UK financial sanctions. Additionally, relevant firms such as banks, other financial institutions, law firms and estate agents have an ongoing obligation to report to OFSI if they know or reasonably suspect that a person is a designated person or has committed offences under financial sanctions regulations, where that information is received in the course of carrying on their business. Those firms must provide information about the nature and amount of any funds or economic resources held by them for the customer.
The designated person reporting measure will act as a dual verification tool by enabling the comparison of disclosures against existing reporting requirements that bite on relevant firms. This will tighten the net around those who are not reporting and are evading their reporting requirements.
On asset seizure, prosecutors and/or law enforcement agencies can currently apply to confiscate or permanently seize assets where someone has benefited from their offending, or the assets have links to criminality, by making use of powers under the Proceeds of Crime Act 2002. Importantly, the new measures will also give His Majesty’s Government the ability to impose fines. Overall, this designated person reporting measure will be focused on strengthening the UK’s compliance toolkit while giving options for penalising those who seek to hide their assets.
The noble Lord’s amendment includes a specific provision which would require the designated person also to report assets which were held six months prior to the designation. The Government are still fully developing the non-disclosure measure and I can assure the noble Lord that we are carefully considering this suggestion. Although not retrospective in terms of regulating or criminalising conduct that occurred before the measure came into force, requiring designated persons to provide a snapshot of their assets at a historical point in time is necessarily more onerous than a forward look requirement. The Government will need carefully to consider the design of the measure and the proportionality and additional value of so-called retrospective reporting to ensure that it is operationally deliverable and legally robust. This will include working with relevant law enforcement agencies to determine how such information would be used.
Before laying these regulations, the Government will complete their ongoing evaluation of possible operational or implementation challenges to help ensure the successful delivery of this measure. For example, investigating non-compliance will require significant resources from the enforcing agency. We want to ensure that it has all the capability, skills and resources to succeed.
I note the interest in and strength of feeling on this issue. The Government will continue to work collaboratively and constructively with interested parties in the lead-up to bringing forward the legislation, including on reporting assets which were held prior to a designation. We will continue to engage with the civil society organisations that have campaigned for this measure, and I would be happy to work with the noble Lord, Lord Alton, and other parliamentarians to keep them informed of progress ahead of it being formally introduced.
Again, I am grateful to the noble Lord for bringing this issue forward for debate and for the continued interest and engagement of many stakeholders. I hope that, given the reasons I have outlined and the action the Government are already taking, he will consider withdrawing his amendment.
Lord Alton of Liverpool (CB)
My Lords, I am extremely grateful to the noble Lord, Lord Sharpe, for the manner in which he has addressed this issue and the House this evening. He was right to pay tribute to the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax; I would link with that the specific work of Dame Margaret Hodge MP, the Royal United Services Institute and many of those in civil society to which the Minister has referred. I was especially pleased to hear what he said about working collaboratively with those organisations that have been involved in taking this amendment forward.
I do not underestimate the importance of what the Minister has said to the House. He said that he will look at the outstanding issue of the six-month retrospective period; although he gave no guarantees or assurances on that front, at least we will be able to discuss and examine it further. However, he has agreed to introduce secondary legislation before the end of the year—not “at a time to be agreed” or some possibility of legislation coming in the next nine or 10 months, but by the end of this year. I welcome that very much. He also told the House that it would be done under the affirmative procedure, which will give us the chance to come back again. Significant progress has been made on this and I am very grateful to the Minister. I am very happy to withdraw the amendment.
Lord Sharpe of Epsom
“SCHEDULECRIMINAL LIABILITY OF BODIES: ECONOMIC CRIMESCommon law offences
1_ Cheating the public revenue.2_ Conspiracy to defraud.3_ In Scotland, the following offences at common law—(a) fraud;(b) uttering;(c) embezzlement;(d) theft.Statutory offences
4_ An offence under any of the following provisions of the Theft Act 1968—(a) section 1 (theft);(b) section 17 (false accounting);(c) section 19 (false statements by company directors etc);(d) section 20 (suppression etc of documents);(e) section 24A (dishonestly retaining a wrongful credit).5_ An offence under any of the following provisions of the Theft Act (Northern Ireland) 1969—(a) section 1 (theft);(b) section 17 (false accounting);(c) section 18 (false statements by company directors etc);(d) section 19 (suppression etc of documents);(e) section 23A (dishonestly retaining a wrongful credit).6_ An offence under any of the following provisions of the Customs and Excise Management Act 1979—(a) section 68 (offences in relation to exportation of prohibited or restricted goods);(b) section 167 (untrue declarations etc);(c) section 170 (fraudulent evasion of duty).7_ An offence under the Forgery and Counterfeiting Act 1981 (forgery, counterfeiting and kindred offences).8_ An offence under section 72 of the Value Added Tax Act 1994 (fraudulent evasion of VAT).9_ An offence under section 46A of the Criminal Law (Consolidation) (Scotland) Act 1995 (false monetary instruments).10_ An offence under any of the following sections of the Financial Services and Markets Act 2000—(a) section 23 (contravention of prohibition on carrying on regulated activity unless authorised or exempt); (b) section 25 (contravention of restrictions on financial promotion);(c) section 85 (prohibition on dealing etc in transferable securities without approved prospectus);(d) section 398 (misleading the FCA or PRA).11_ An offence under any of the following sections of the Terrorism Act 2000—(a) section 15 (fund-raising);(b) section 16 (use and possession);(c) section 17 (funding arrangements);(d) section 18 (money laundering);(e) section 63 (terrorist finance: jurisdiction).12_ An offence under any of the following sections of the Proceeds of Crime Act 2002—(a) section 327 (concealing etc criminal property);(b) section 328 (arrangements facilitating acquisition etc of criminal property);(c) section 329 (acquisition, use and possession of criminal property);(d) section 330 (failing to disclose knowledge or suspicion of money laundering);(e) section 333A (tipping off: regulated sector).13_ An offence under section 993 of the Companies Act 2006 (fraudulent trading).14_ An offence under any of the following sections of the Fraud Act 2006—(a) section 1 (fraud);(b) section 6 (possession etc of articles for use in frauds);(c) section 7 (making or supplying articles for use in frauds);(d) section 9 (participating in fraudulent business carried on by sole trader);(e) section 11 (obtaining services dishonestly).15_ An offence under any of the following sections of the Bribery Act 2010—(a) section 1 (bribing another person);(b) section 2 (being bribed);(c) section 6 (bribery of foreign public officials).16_ An offence under section 49 of the Criminal Justice and Licensing (Scotland) Act 2010 (possession, making or supplying articles for use in frauds).17_ An offence under any of the following sections of the Financial Services Act 2012—(a) section 89 (misleading statements);(b) section 90 (misleading impressions);(c) section 91 (misleading statements etc in relation to benchmarks).18_ An offence under regulation 86 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.19_ An offence under regulations made under section 49 of the Sanctions and Anti-Money Laundering Act 2018 (money laundering and terrorist financing etc).20_ (1) An offence under an instrument made under section 2(2) of the European Communities Act 1972 for the purpose of implementing, or otherwise in relation to, EU obligations created or arising by or under an EU financial sanctions Regulation.(2) An offence under an Act or under subordinate legislation where the offence was created for the purpose of implementing a UN financial sanctions Resolution. (3) An offence under paragraph 7 of Schedule 3 to the Anti-terrorism, Crime and Security Act 2001 (freezing orders).(4) An offence under paragraph 30 or 30A of Schedule 7 to the Counter-Terrorism Act 2008 where the offence relates to a requirement of the kind mentioned in paragraph 13 of that Schedule.(5) An offence under paragraph 31 of Schedule 7 to the Counter-Terrorism Act 2008.(6) An offence under regulations made under section 1 of the Sanctions and Anti-Money Laundering Act 2018 (sanctions regulations).(7) In this paragraph—“EU financial sanctions Regulation” and “UN financial sanctions Resolution” have the same meanings as in Part 8 of the Policing and Crime Act 2017 (see section 143 of that Act);“subordinate legislation” has the same meaning as in the Interpretation Act 1978.”Member’s explanatory statement
This amendment sets out the list of offences in relation to which liability may be attributed to the body in accordance with Clause (Attributing criminal liability for economic crimes to certain bodies)(1).
Lord Garnier
Member’s explanatory statement
This amendment, together with the amendment to leave out Clause 190, would remove the exemption for organisations that are not “large organisations” from the failure to prevent regime so that there are no exemptions, although the statutory defence will apply to all organisations.
Lord Garnier (Con)
My Lords, clearly, I have not persuaded the Government, but I hope that I have not treated their arguments with disrespect. We have had not a row but an honest disagreement. As with all sorts of disagreements, I invite the House to arbitrate and will press this amendment to a Division.
The Deputy Speaker (Baroness Barker) (LD)
I advise the House that, if Amendment 110 is agreed to, I cannot call Amendment 111 because of pre-emption.
The Deputy Speaker (Baroness Barker) (LD)
My Lords, I cannot call Amendment 111 because of pre-emption.
Amendments 112 to 116
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment and my amendment at page 178, line 2 substitute the term “subsidiary undertaking” for “subsidiary”, for consistency with my amendment at page 178, line 3.
“(1A) A relevant body is also guilty of an offence under subsection (1) if—(a) an employee of the relevant body commits a fraud offence intending to benefit (whether directly or indirectly) the relevant body,(b) the fraud offence is committed in a financial year of a parent undertaking of which the relevant body is a subsidiary undertaking (“the year of the fraud offence”), and(c) the parent undertaking is a relevant body which is a large organisation.”Member’s explanatory statement
This amendment establishes that an offence of failure to prevent fraud may be committed by a subsidiary of a large organisation where an employee of the subsidiary commits a fraud offence, intending to benefit the subsidiary.
Member’s explanatory statement
This amendment omits unnecessary words.
Member’s explanatory statement
See the explanatory note for my amendment at page 177, line 28.
“(6A) For the purposes of this section a person is also associated with a relevant body if the person is an employee of a subsidiary undertaking of the relevant body; but for the purpose of determining whether an offence is committed by virtue of this subsection, subsection (1) has effect with the omission of paragraph (b) (and the “or” preceding it).”Member’s explanatory statement
This amendment establishes that an offence of failure to prevent fraud may be committed where an employee of a subsidiary of a large organisation commits a fraud offence, intending to benefit the large organisation.
Lord Sharpe of Epsom
“(1A) The reference in subsection (1) to a relevant body does not include a relevant body which is a parent undertaking (as to which see section (Large organisations: parent undertakings)).”Member’s explanatory statement
See the explanatory statement for new Clause (Large organisations: parent undertakings).
Member’s explanatory statement
This amendment enables new Clause (Large organisations: parent undertakings) to be modified for the purpose of altering the meaning of “large organisation”.
“(6A) Before making regulations under subsection (5) or (6) the Secretary of State must consult—(a) the Scottish Ministers, and(b) the Department of Justice in Northern Ireland.”Member’s explanatory statement
This amendment requires consultation to take place before the powers in subsections (5) and (6) are exercised.
Lord Sharpe of Epsom
“Large organisations: parent undertakings
(1) For the purposes of section 188(1) and (1A) a relevant body which is a parent undertaking is a “large organisation” only if the group headed by it satisfied two or more of the following conditions in the financial year of the body that precedes the year of the fraud offence—
Aggregate turnover | More than £36 million net (or £43.2 million gross) |
Aggregate balance sheet total | More than £18 million net (or £21.6 million gross) |
Aggregate number of employees | More than 250. |
This amendment and my amendment at page 179, line 35, enable certain parent undertakings to qualify as a “large organisation” for the purposes of the offence of failure to prevent fraud.
Lord Sharpe of Epsom
“(5A) “Parent undertaking” has the same meaning as in the Companies Acts (see section 1162 of the Companies Act 2006).”Member’s explanatory statement
This amendment is supplementary to new Clause (Large organisations: parent undertakings).
“(8) “Subsidiary undertaking” has the same meaning as in the Companies Acts (see section 1162 of the Companies Act 2006).” Member’s explanatory statement
This amendment is supplementary to new Clause (Large organisations: parent undertakings).
Lord Evans of Rainow (Con)
My Lords, I beg to move that we adjourn during pleasure—
“Update on the Fraud Strategy
The Government must publish, and lay before Parliament, an update by July 2024, and annually thereafter, on the progress and effectiveness of the implementation of the commitments made under Pillars 1, 2 and 3 of the Fraud Strategy published in May 2023, and the impact of the commitments, as it relates to the reduction of economic crime.”Member’s explanatory statement
This amendment requires the Government provide an update on the impact of the Fraud Strategy of May 2023 by July 2024 and then annually thereafter.
Baroness Bennett of Manor Castle (GP)
My Lords, I may be able to assist the House by moving Amendment 125—if no one yells at me, I will assume I am doing the right thing—in the name of the noble Lord, Lord Agnew, to which I have attached my name. I shall keep going. Noble Lords will see that this amendment calls for an update on the fraud strategy and for the Government to publish and lay before Parliament
“an update … by July 2024, and annually thereafter”.
We have debated at considerable length the fact that the UK is
“the fraud capital of the world”—
and there I am quoting the head of UK Finance. I attached my name to the amendment because, as I do not need to say to the House, the noble Lord, Lord Agnew, is absolutely our stalwart leader on these issues, so I beg to move.
Lord Agnew of Oulton (Con)
My Lords, I do not seek to press this amendment. I merely say that the fraud plan, which my noble friend the Minister worked so hard on, has produced a list of some 74 commitments. I certainly am not going to add to the agony of the House and list them; all I ask my noble friend to do is to ensure that there is a mechanism for his department to track the progress of all these commitments. In aggregate, they would entirely change the landscape, but if they are not pursued, we will not move forward.
Baroness Blake of Leeds (Lab)
Amendment 128 in the name of my noble friend Lord Coaker has a straightforward, clear ask: within a year of the Bill passing, the Secretary of State must publish a report on economic crime and investigation. It must include the performance of the framework for investigating crime, et cetera, and an assessment of the roles of the Serious Fraud Office in particular. Important elements mentioned in the amendment include the adequate resourcing of staff and the strategy for fees, which we have discussed elsewhere.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Baroness, Lady Blake, for speaking to the amendment in the name of the noble Lord, Lord Coaker, and my noble friend Lord Agnew of Oulton for his amendment. These amendments seek to add further parliamentary scrutiny on economic crime matters.
However, I have been clear throughout the previous debates on this topic that it is the Government’s view that there is already more than sufficient external scrutiny in the areas outlined by the noble Lords. These amendments are therefore duplicative, and if accepted would lead to agencies and government departments being caught in resource-intensive reporting requirements that would have no real benefit to parliamentarians, detracting from their core roles of tackling economic crime. I have noted what my noble friend has said, and the Government are of course more than committed to doing the things he suggests.
Amendment 128 in the name of the noble Lord, Lord Coaker, would require the Government to issue a report on the performance of agencies and departments in tackling economic crime. I am aware of the strength of his feeling on the resourcing, performance and co-ordination of operational agencies. I hope that the sessions we have facilitated for him with Companies House and the Serious Fraud Office will have gone some way to reassuring him on this.
I can also reassure him and the House that the Government are ensuring that the response to economic crime has the necessary funding. The combination of 2021’s spending review settlement and private sector contributions through the new economic crime levy will provide funding of £400 million over the spending review period. The levy applies to the AML-regulated sector and will fund new or uplifted activity to tackle money laundering, starting from 2023-24.
In addition, a proportion of assets recovered under the Proceeds of Crime Act 2002 are already reinvested in economic crime capability. Under the asset recovery incentivisation scheme—ARIS—receipts paid into the Home Office are split 50:50 between central government and operational partners, based on their relative contribution to delivering receipts. In 2021-22 this resulted in £142 million being redistributed to POCA agencies. That should provide the necessary reassurance on resourcing and funding. Given what I hope to have shown is a significant amount of reporting, external scrutiny and indeed funding and resource, I ask the noble Baroness, on behalf of the noble Lord, Lord Coaker, not to press Amendment 128.
Baroness Bennett of Manor Castle (GP)
My Lords, I refer to a comment made by another Minister at the Dispatch Box that we will come back to economic crime and fraud again and again. I have no doubt about that. In the meantime, I beg leave to withdraw Amendment 125.
Lord Garnier
“Failure to prevent fraud and money laundering
(1) A relevant body is guilty of an offence if a person who is associated with the body (“the associate”) commits a fraud or money laundering offence intending to benefit (whether directly or indirectly)—(a) the relevant body, or(b) any person to whom, or to whose subsidiary, the associate provides services on behalf of the relevant body.(2) The relevant body is not guilty of an offence under subsection (1)(a) where the conduct underlying the offence was intended to cause harm to the body.(3) It is a defence for the relevant body to prove that, at the time the relevant offence was committed— (a) the body had in place such prevention procedures as it was reasonable in all the circumstances to expect the body to have in place, or(b) it was not reasonable in all the circumstances to expect the body to have any prevention procedures in place.(4) In subsection (3) “prevention procedures” means procedures designed to prevent persons associated with the body from committing fraud or money laundering offences as mentioned in subsection (1).(5) A “fraud or money laundering offence” is an act which constitutes—(a) an offence listed in Schedule 11 (failure to prevent fraud: fraud offences) (a “listed offence”), or(b) aiding, abetting, counselling or procuring the commission of a listed offence.(6) For the purposes of this section a person is associated with a relevant body if—(a) the person is an employee, agent or subsidiary of the relevant body, or(b) the person otherwise performs services for or on behalf of the body.(7) Whether or not a particular person performs services for or on behalf of a relevant body is to be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between that person and the body.(8) Where a relevant body is liable to be proceeded against for an offence under subsection (1) in a particular part of the United Kingdom, proceedings against the body for the offence may be taken in any place in the United Kingdom.(9) Where by virtue of subsection (8) proceedings against a relevant body for an offence are to be taken in Scotland—(a) the body may be prosecuted, tried and punished in a sheriff court district determined by the Lord Advocate, as if the offence had been committed in that district, and(b) the offence is, for all purposes incidental to or consequential on the trial or punishment, deemed to have been committed in that district.(10) A relevant body guilty of an offence under this section is liable—(a) on conviction on indictment, to a fine;(b) on summary conviction in England and Wales, to a fine;(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.(11) In this section—“relevant body” means—(a) a body which is incorporated under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere),(b) any other body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom,(c) a partnership which is formed under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere), or(d) any other partnership (wherever formed) which carries on a business, or part of a business, in any part of the United Kingdom,and, for the purposes of this section, a trade or profession is a business;“sheriff court district” is to be read in accordance with the Criminal Procedure (Scotland) Act 1995 (see section 307(1) of that Act).(12) It is immaterial for the purposes of section (1) whether— (a) any relevant conduct of a relevant body, or(b) any conduct which constitutes part of a relevant fraud or money laundering offence,takes place in the United Kingdom or elsewhere.”
Lord Agnew of Oulton
“Civil recovery: costs of proceedings
After section 313 of the Proceeds of Crime Act 2002 insert—“313A Costs orders(1) This section applies to proceedings brought by an enforcement authority under Part 5 of the Proceeds of Crime Act 2002 where the property in respect of which the proceedings have been brought has been obtained through economic crime.(2) The court may not make an order that any costs of proceedings relating to a case to which this section applies (including appeal proceedings) are payable by an enforcement authority to a respondent or a specified responsible officer in respect of the involvement of the respondent or the officer in those proceedings, unless—(a) the authority acted unreasonably in making or opposing the application to which the proceedings relate, or in supporting or opposing the making of the order to which the proceedings relate,(b) the authority acted dishonestly or improperly in the course of the proceedings, or(c) it would not be in the interests of justice.””Member’s explanatory statement
This extends the cost cap for civil recovery cases beyond Unexplained Wealth Orders. Part 5 of the Proceeds of Crime Act permits the recovery of criminal assets where no conviction has been possible. For example, because the individuals avoided conviction by remaining remote from the commission of the crimes but were beneficiaries of them, or having fled the country. It retains safeguards on costs for improper action taken by prosecuting authorities.
Lord Agnew of Oulton (Con)
My Lords, I shall be very brief. First, I thank my noble and learned friend the Minister for his active engagement on this; he knows how strongly I feel about it.
We have a complete mishmash on the principles of cost capping at the moment. For example, cases taken in the magistrates’ courts have cost capping, as do cases taken by the SRA. However, we do not have cost capping for the most important of all: those large cases where the enforcement agencies are trying to take on big-time oligarchs.
The only other thing I would say is that we have heard about Bill Browder tonight. I have spoken to him a lot over the past few months. He said, “The one clause you must get through in this Bill is the one on cost capping”. I beseech the Government to listen to us on this and bring forward a clause on cost capping.
Lord Faulks (Non-Afl)
My Lords, I rise briefly to support the noble Lord. Two key themes emerged from our lengthy debates on the Bill. The first was that the scale of economic crime is a major threat to the prosperity of the country. The second was that there is a significant inequality of arms between the enforcement authorities and the perpetrators of economic crimes. I could weary the House at length but I will not do so. This is an attempt to redress that inequality and not provide a disincentive for the authorities to pursue the perpetrators of economic crime.
Lord Ponsonby of Shulbrede (Lab)
My Lords, if the noble Lord chooses to move to a vote, we will support him. This amendment would build on last year’s Bill, which introduced similar changes to unexplained wealth orders. It is a welcome development, and I hope that the noble Lord presses his amendment to a vote.
Lord Bellamy (Con)
My Lords, unfortunately, the Government are not able to accept this amendment, although we are sympathetic to the points made by my noble friend Lord Agnew. The amendment is designed to protect public authorities from having costs awarded against them if they fail to recover the proceeds of economic crime under the Proceeds of Crime Act.
First, the Government are not persuaded that public authorities that lose their case should be protected in this way. Secondly, this is a major breach of the general principle applied in civil litigation in the High Court that the loser pays.
Thirdly, it is a major interference with the discretion of the court on the question of costs. Fourthly, if such a change were to be contemplated, it should be a matter for the Civil Procedure Rules and not something inserted without detailed reflection on Report in your Lordships’ House. Fifthly, it would produce even more inconsistency than allegedly we have already. I do not accept that there is material inconsistency, but you would have one rule for some POCA cases and another rule for other POCA cases, because not all POCA cases are economic crime cases.
However, the Government are prepared actively to consider a consultation to properly consider this matter and the evidence with a view to ensuring that there is a correct balance of justice and the proper consideration of the pros and cons. That, very briefly, is the Government’s position.
I will briefly deal with one or two points. This is not like unexplained wealth orders, which have been mentioned. Those are an investigative procedure and not determinative of civil rights and obligations. In some respects, the UWO procedure is closer to a search warrant than to a recovery of money in civil litigation. It does not provide an analogy to the present case.
It is true that there are various costs regimes in various cases. It is probably not useful to weary your Lordships with particular decisions, but it is not without interest that in the case of Pfizer and Flynn, which involved the Competition and Markets Authority, the authority lost at first instance and was ordered to pay some of the costs. The Court of Appeal overturned that on the basis that it did not want to have the “chilling effect” of public authorities having to pay the costs when they lose litigation. However, the Supreme Court restored the original judgment and said, “This so-called chilling effect is only one factor”. In other words, it is not decisive. You must consider in that jurisdiction all the factors. The Government draw from that case that the so-called chilling effect is not necessarily decisive, and that one must have a regime that enables the court to balance all the relevant effects.
With all respect for the motives behind it and the concerns that have been expressed, this amendment is too blunt an instrument to be a proper exercise of primary legislation in an area which very much calls for balanced consideration under the Civil Procedure Rules. As I said at the outset, the Government are perfectly prepared actively to consider reform of the Civil Procedure Rules with that aim in mind.
I hope that I have persuaded your Lordships that this is not an occasion to make an exception to the well-established rule that has stood for hundreds of years, whether it applies to HMRC, the National Crime Agency or the FCA. If they make a complete Horlicks of a case, there is no reason to let them off the costs. That is the Government’s position.
Lord Agnew of Oulton (Con)
I thank my noble and learned friend the Minister for his answer. He has always been entirely consistent, and I respect that. We have a genuine difference of views. English law has plenty of exceptions to the landscape which my noble and learned friend has set out—for example, when local authorities bring cases following the Booth case, law enforcement bodies when they bring cases in the magistrates’ court, the Law Society when it brings disciplinary action, its prosecutions that fail following the Baxendale-Walker case, and the Competition and Markets Authority, where the Competition Appeal Tribunal can rule in its favour when it is unsuccessful in bringing a case.
There are plenty of examples. I am not seeking to make the perfect the enemy of the good. We can bring this in with this Bill. It would send a very powerful signal. I seek to test the opinion of the House.
Baroness Kramer
“Whistleblowing: economic crime
(1) Whistleblowing is defined for the purposes of this section as any disclosure of information suggesting that, in the reasonable opinion of the whistleblower, an economic crime—(a) has occurred,(b) is occurring, or(c) is likely to occur.(2) The Secretary of State must by regulations made by statutory instrument, within the period of 12 months beginning with the day on which this Act is passed, set up a body corporate, to be known as the Office for Whistleblowers, to receive reports of whistleblowing as defined in subsection (1).(3) Regulations under subsection (2) may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by, each House of Parliament. (4) The Office for Whistleblowers must—(a) protect whistleblowers from detriment resulting from their whistleblowing,(b) ensure that disclosures by whistleblowers are investigated, and(c) escalate information and evidence of wrongdoing outside of its remit to such other appropriate authority as the regulations may provide or otherwise as the Office may determine.(5) The objectives of the Office for Whistleblowers are—(a) to encourage and support whistleblowers to make whistleblowing reports,(b) to provide an independent, confidential and safe environment for making and receiving whistleblowing information,(c) to provide information and advice on whistleblowing, and(d) to act on evidence of detriment to the whistleblower according to such guidance as may be set out by the Secretary of State in the regulations.(6) The Office for Whistleblowers must report annually to Parliament on the exercise of its duties, objectives and functions.”Member’s explanatory statement
This amendment would require the Secretary of State to set up an Office for Whistleblowers to receive reports of whistleblowing in relation to economic crime.
Baroness Kramer (LD)
My Lords, it has been a long day and I discussed this amendment to create an office for whistleblowers extensively in Committee, so I will not cover the detailed ground again. I had intended to bring this amendment back to give an opportunity to the noble Lord, Lord Browne of Ladyton, but, given the small number in the Chamber at this time, we mutually decided that he should save the information that he has gathered for a larger audience. The noble Lord has, in essence, uncovered information that demonstrates how few whistleblower reports are actually investigated by any of the regulators.
As we have discussed before, whistleblowers have two asks, the first of which is that they are not left to be victims of retaliation. This House has heard how often the careers and lives of whistleblowers are destroyed under the current framework. The only protection the FCA offers is confidentiality for the whistleblower reports it receives; it takes no action if whistleblowers are identified—as they often are, because they have raised concerns internally or because the information itself identifies them. The employment tribunal process, which is limited to employees, costly and often drawn out for years, is no real protection. Correcting this by creating an office for whistleblowers is at the heart of my amendment.
The other ask of any whistleblower is that their tip-off, especially when supported by extensive data, is followed up with an investigation. Many of us assume that this would be the norm, except where the tip is malicious or frivolous. Instead, it is the rare exception, as the noble Lord, Lord Browne, will detail when he next has the opportunity. Following a recent survey of whistleblowers, the FCA told us that it is intending to remedy the lack of follow-up. It admits that it followed up fully on only three cases last year. It also says that it will take time to build the capacity and protocols to make follow-up much more the norm.
This amendment would give the office for whistle- blowers the power to get regulators to follow up tips, rather than brush them in the bin, which has been the norm in virtually every area of public and private life. The House will be fairly shocked when it sees the data assembled by the noble Lord, Lord Browne.
Before I close, I again draw the House’s attention to the difference in performance between the UK and the US. I am not suggesting that the US has it all solved or that we should import the US system, which in many ways would not fit well. However, last year, the Securities and Exchange Commission alone received 783 tips from UK whistleblowers, typically because the UK regulator had decided on no action. My understanding is that, in the US, tips means that all those cases will be followed up intensely.
Last weekend, I was stopped in the street by a whistleblower who has received no action by the FCA. He told me that he has been invited to fly to the US— I believe he is there now—because the SEC’s initial investigation, based on his tip, is opening up one of the most significant cases of bank fraud in a decade. It should be an exception for a UK whistleblower to believe that the only place that they can go to get proper investigation is the United States; unfortunately, it is the rule in financial services. For that reason, among others, I beg to move.
Baroness Altmann (Con)
I do not wish to detain the House long. I congratulate the noble Baroness, Lady Kramer, on her amendment and her Private Member’s Bill trying to bring this matter to the House’s attention. She is absolutely right that it is really important, and I wish that we could put a measure of this nature into the Bill—whether this one exactly or something similar.
It should not be a career-ending decision to try to do the right thing. To try to alert the country to a major issue that may be going on within our corporate sector should not be something that one is frightened of. Sadly, at the moment, that is so.
I also congratulate the APPG on Anti-Corruption and Responsible Tax, which has done brilliant work in helping brief the House on the Bill. Finally, I thank my noble friend the Minister, who I know has tried so hard to make this a better Bill. I thank the noble Baroness, Lady Kramer. I fully support her amendment, but I am sad that it is not going to carry tonight.
Baroness Blake of Leeds (Lab)
I add my recognition to the noble Baroness, Lady Kramer, for the extraordinary attention to detail and persistence that she has shown in taking forward this very important issue. I know that the Minister will talk to us about the review that is coming in, but there still remain certain aspects that could be brought in immediately—for example, an expectation that every company at least has a policy on whistleblowing. We do not have to wait for a review to achieve that.
We have heard some extraordinary testimony through the debates on the Bill, and the real heartache and personal cost that have befallen people who have not had a good experience. As the noble Baroness, Lady Altmann, said, too many people wait until their job or career comes to an end before they give any details, if they do at all, on the issues that concern them.
This is an extraordinarily important issue. We need to make sure that the pressure is on. I ask the Minister to give us some reassurance about the review, what will happen when it is concluded, and what the mechanism will be to make sure that its findings are put into practice.
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
Before I speak to the amendment in this group, I draw your Lordships’ attention to my interests as set out in the register.
I turn to Amendment 136. I personally thank the noble Baroness, Lady Kramer, for raising the very important matter of whistleblowing. I have been extremely grateful for the time that she spent with me ahead of this debate, and look forward to continuing being an important conduit for her into the Government, trying to seek a good resolution around the noblest of intentions. I am also grateful to my noble friend Lady Altmann and the noble Baroness, Lady Blake, as always, for their useful, contributory, collaborative comments.
This Government recognise how valuable it is that whistleblowers are prepared to shine a light on wrongdoing and believe that they should be able to do so without fear of recriminations. This entire process fits within the spirit of the ECCT Bill. I pay tribute to the courage displayed by individuals who blow the whistle on wrongdoing.
I appreciate that there is real strength of feeling on this topic, but the Government’s position is still that it is premature to make legislative change ahead of the review of the whistleblowing framework, which has been mentioned in this debate. The Government recognise that there are different proposals for an office for the whistleblower, and the roles and functions that such a body could have.
The office risks duplication and confusion within the established whistleblowing framework. It is not necessarily clear how the office would interact with the existing prescribed persons, many of whom have regulatory powers in specific sectors. It may duplicate their role and responsibilities. It is also not clear how the office would interact with the current approach to detriment protection for whistleblowers and the role of the employment tribunal, and how whistleblowers and employers would be affected.
Secondly, there is an issue around the costs associated with establishing and running a body. It is not clear how the body would be funded, and we should think very carefully before committing taxpayers’ money, even though this is clearly a very important cause that deserves significant amounts of attention.
Finally, I would not want the Government to take such a dramatic step before they have fully considered the effectiveness of our existing framework as well. As I am sure noble Lords would agree, it would be premature to make legislative change before the ongoing review of the whistleblowing framework has concluded and the Government have assessed the evidence.
It is worth pointing out that we were one of the first countries to introduce a whistleblowing framework, and our framework is well established. Internationally, we are regarded as a leader in whistleblowing policy and our framework has been used as a model for other jurisdictions, such as Australia and Ireland. The whistle- blowing framework recognises that workers are actually the first line of defence for employers to detect and take action where wrongdoing is taking place or has the potential to do so. Workers who believe that they have been dismissed or otherwise detrimentally treated for making a protected disclosure can make a claim to the employment tribunal, which can award unlimited compensation.
Baroness Kramer (LD)
My Lords, I thank both the noble Baroness, Lady Altmann, who is so active in this cause, and the noble Baroness, Lady Blake, for the statements they made. I thank the Minister too for reinforcing the steps that the Government are taking to review the whistleblowing framework. We have real hopes that that will achieve a lot of the goals that we have in mind.
I want to reassure the Minister on one point. A canard that is so often raised, and I have addressed it before, is the cost of an office of the whistleblower. Within the Securities and Exchange Commission, the Office of the Whistleblower is regarded not as a cost centre but as a profit centre. Its capacity to pursue wrongdoing has led to such a level of fines as a consequence that over the past 10 years it has passed back in excess of $7 billion to the US treasury. It is certainly an institution that more than pays for itself, because it brings wrongdoers to justice, leads to financial penalties and not only covers its own costs but contributes to taxpayers’ benefit, as it should.
However, I will of course, under these circumstances, at this late hour, and with many thanks, agree to treat this as additional pressure on the Government to further a sense of urgency for the review. I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness Barker) (LD)
My Lords, I should inform the House that the numbers announced for the Division on Amendment 129 need to be corrected. This does not impact the outcome. The correct numbers were: Contents 164, Not-Contents 150.
Clause 204: Regulations
Amendments 137 to 140
Lord Evans of Rainow
Member’s explanatory statement
See the explanatory statement for new clause (Strategic litigation against public participation: requirement to make rules of court).
“(ea) regulations made by the Secretary of State under section (Power to amend list of economic crimes)(1);”Member’s explanatory statement
This amendment provides for regulations under new Clause (Power to amend list of economic crimes) made by the Secretary of State to be subject to the affirmative procedure.
Member’s explanatory statement
This amendment provides for regulations under new Clause (Power to amend list of economic crimes) made by the Scottish Ministers to be subject to the affirmative procedure.
Member’s explanatory statement
This amendment provides for regulations under new Clause (Power to amend list of economic crimes) made by the Northern Ireland Department to be subject to the affirmative procedure.
Lord Evans of Rainow
Member’s explanatory statement
See the explanatory statement for new clause (Strategic litigation against public participation: requirement to make rules of court).
“(1A) Sections (Strategic litigation against public participation: requirement to make rules of court) and (Meaning of “SLAPP” claim) extend to England and Wales only.”Member’s explanatory statement
See the explanatory statement for new clause (Strategic litigation against public participation: requirement to make rules of court).
Lord Evans of Rainow
Member’s explanatory statement
See the explanatory statement for new clause (Strategic litigation against public participation: requirement to make rules of court).
Member’s explanatory statement
This amendment and my other amendment to Clause 206 provide for new Clauses (Attributing liability for economic crimes), (Power to amend list of economic crimes) and (Offences under section (Attributing criminal liability for economic crimes to certain bodies) committed by partnerships) and new Schedule (Criminal liability of bodies: economic crimes) to come into force two months after Royal Assent.
(a) section (Attributing criminal liability for economic crimes to certain bodies) and Schedule (Criminal liability of bodies: economic crimes);(b) section (Power to amend list of economic crimes);(c) section (Offences under section (Attributing criminal liability for economic crimes to certain bodies) committed by partnerships);(d) section 201.”Member’s explanatory statement
See the explanatory statement for my other amendment to Clause 206.
Diocesan Stipends Funds (Amendment) Measure
(10 months, 2 weeks ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate
The Lord Bishop of Sheffield
That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Diocesan Stipends Funds (Amendment) Measure be presented to His Majesty for the Royal Assent.
The Lord Bishop of Sheffield
My Lords, I am not entirely surprised to discover that this Measure excites noble Members of the House rather less than the previous business.
In the medieval period, clergy were paid mainly from income derived from land owned by each parish, known as glebe land. The amount of land varied from parish to parish, and so accordingly did the income of the clergy. With the Industrial Revolution and the growth of cities, wealthy industrialists were often willing to give significant amounts of money to support the local church, often helping to build and endow the church in question. In my diocese of Sheffield, a number of large churches were built in this period thanks to the generosity of industrialists such as Samuel Fox, the founder of the local Stocksbridge steelworks.
Moving forward to the 20th century, the Endowments and Glebe Measure 1976 transferred glebe land from parishes to diocesan boards of finance in exchange for the payment of a standard stipend to each member of clergy in the diocese. However, that left very unequal distributions of wealth between dioceses. For example, at the end of 2020, the diocese of Oxford had diocesan stipend fund capital assets worth £171 million, while the diocese of Liverpool had only £1.5 million.
Regardless of their wealth, each of the 42 dioceses in the Church of England is required under the Diocesan Stipends Funds Measure 1953 to maintain two accounts. The first is a capital account, which holds the glebe land legacies and other assets. The second is an income account, which holds the proceeds from the capital account, but funds in the income account may be used only for specified statutory purposes, principal of which is the paying of parish clergy stipends. This amending Measure concerns the income account only.
The existing legislative position means that the funds in the income account can be used only within the particular diocese itself. In 2020, the Church of England began to look at ways to enable a richer diocese to support a poorer one by donating funds directly for the payment of clergy stipends. The recommendation of the Church’s Mutuality in Finances Group, which I had the privilege of chairing, was to bring a simple Measure for synod’s consideration that would remove the geographic restriction on the use of diocesan funds so as to enable one diocese to donate to another.
This brief Measure does this by amending the Diocesan Stipends Funds Measure 1953 by inserting a new single clause. Subsection (1) of the new clause provides that where a diocesan board of finance is satisfied that funds which sit in its stipends income account do not need to be used for another statutory purpose, it may transfer those funds out of the diocese. Subsection (2) provides that where a transfer takes place, it may only be directly to the stipends income account of another Church of England diocese or to the Archbishops’ Council or another mediating charity. Subsection (3) requires that where the Archbishops’ Council or another mediating charity receives such funds, it may transfer those funds only to the stipends income account of a diocese or dioceses. It is important to emphasise that this new power is entirely permissive and there will be no obligation whatever on a diocese to use it. That said, the Church is confident that those dioceses which are able to be generous will be so. I beg to move.
Baroness Harris of Richmond (LD) [V]
My Lords, I am most grateful to the right reverend Prelate the Bishop of Sheffield for his elegant introduction to this Measure, much of which I regret I will be repeating for the record. I thank the noble and learned Baroness, Lady Butler-Sloss, who is unable to be in her place this evening. She guides us with great wisdom and knowledge as chair of the Ecclesiastical Committee. She has asked me to represent her this evening, which I gladly do.
This is a short Measure but nevertheless an important one. In a nutshell, it is about generosity of spirit, as well as money, from a well-off benefice to one less fortunate. Before I begin, I must declare my interests. I am High Steward of Ripon Cathedral in North Yorkshire and I have a nephew who is a priest on the Isle of Man. Neither of these interests is financial.
Historically, as we have heard, the incumbents of a parish were supported in their ministry by moneys garnered from glebe property—assets of land, property et cetera—which helped pay for the clergy in support of their ministry. During and after the Industrial Revolution, most people who lived in rural areas moved into the new towns and cities, and these of course flourished. Many became very wealthy and so did not need any help from rural areas. Some areas with lots of glebe were well able to support their clergy, but others without such benefits were not so fortunate. Their clergy were not, therefore, well supported. In order to iron out these discrepancies, the Endowments and Glebe Measure 1976 transferred the glebe from the benefices to diocesan boards of finance in exchange for them providing a standard stipend to all members of the clergy who ministered in the parishes of the diocese. The diocesan stipend fund—DSF—holds that glebe land, with any accrued income from it going into the fund. The money is then distributed into its capital account.
The problem then arose that the Church found that some dioceses were having to make financial savings because of their loss of glebe moneys, whereas others were much wealthier because of significant income from historic wealth. As an example of this discrepancy, we were told that Oxford holds the most valuable historic assets at £171 million, and Liverpool the lowest at £1.5 million. So to try to come to a more equitable state, the Mutuality in Finances Group was formed to explore options such as moving money between dioceses from sufficiently wealthy parishes to those in greatest need.
At present, dioceses can use their diocesan stipend fund only for certain specified purposes and only within their own diocese. In 2021, the House of Bishops, the Archbishops’ Council and the synod recommended that legislation be brought forward to get rid of these anomalies and give dioceses more freedom to distribute their historic wealth more generously and help their struggling colleagues. As noble Lords would expect, there are a number of provisions in the Measure that stipulate how the money may be transferred from one diocese to another. New Section 5B is permissive rather than mandatory, for moneys to be used in various circumstances. New Section 5B(2) sets out the options a diocesan board of finance has if it decides to transfer money. It can do so to the income account of the diocesan stipend fund of another diocese; or to an account, held for the purposes of new Section 5B, of the Archbishops’ Council; or to another charity. If it goes to another charity, that charity then has to decide to which diocese or dioceses it intends to transfer the funds. Then it transfers the money to the relevant diocesan stipend fund.
Baroness Sherlock (Lab)
My Lords, I declare an interest as a priest of the Church of England, but not one in receipt of a stipend.
I thank the right reverend Prelate the Bishop of Sheffield for his clear introduction to this Measure and for showing us once again that Church of England Measures are sometimes much more interesting than they sound from the title—that is certainly the case today. I also thank the noble Baroness, Lady Harris of Richmond. Indeed, the House is indebted to the whole of the Ecclesiastical Committee once again for its work in scrutinising this Measure and assuring us that it is expedient.
I reassure the right reverend Prelate that I am not getting up to oppose the Measure in any way; I just thought this might be an opportunity to ask him a question. He may know that Members of both Houses have been receiving representations from a group calling itself Save the Parish, which suggests that more money from the Church of England should be directed to the front line of parish ministry. This is obviously a matter for the Church but I wonder if he could simply take this opportunity to tell the House whether this Measure will help in that regard or whether those concerns are misplaced?
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I am not a member of the Church of England—I am actually a Catholic—but I have great respect for the Church of England and, of course, for all the right reverend Prelates who take part in the deliberations here. I am fascinated by the funding issue. I think this a really good Measure; I did not know anything about it until we heard from the right reverend Prelate. It is good to see that better-off parishes are funding less well-off parishes; I commend that very much. I would like to know a bit more about funding for the Catholic Church but I suspect that is for another debate. I am very happy to support the Measure and I thank the right reverend Prelate for moving it.
Lord Lexden (Con)
My Lords, if I may, I would like to ask just one question. Given that this is such an obviously good idea—that dioceses with money they can spare should be able to transfer it to dioceses where there is need—why has it taken the Church of England so long to get round to implementing it?
The Lord Bishop of Sheffield
I am extremely grateful to noble Lords for their contributions to this brief debate. I am grateful to the noble Baroness, Lady Harris of Richmond, for her clear and helpful summary of the purpose of this Measure.
With the noble Baroness, Lady Sherlock, I am extremely grateful to the Ecclesiastical Committee for its work in deeming this measure expedient. I assure the noble Baroness that the Measure will certainly have the potential to ensure that nationwide the Church of England is able to deploy more stipendiary clergy, not fewer.
This Measure is certainly no threat to the members of the Save the Parish group. Indeed, the chairman of that group spoke memorably and most passionately in the General Synod in support of the Measure as it passed through the synodical process.
I thank the noble Lord, Lord Kennedy, for his contribution. Perhaps there might be some hope that the Roman Catholic Church will follow in the footsteps of the Church of England in this respect. To the noble Lord, Lord Lexden, I can say only that the Church of England tends in almost all things to move at snail’s pace. I beg to move.