House of Commons
(3 months, 3 weeks ago)
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Prayers
(3 months, 3 weeks ago)
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Mr Speaker
As I told the House yesterday, I have to report the death of Sir Tony Lloyd, the Member for Rochdale. I know that hon. Members from across the House will join me in mourning the loss of our colleague, and I invite all Members to join me in a minute’s silence in memory of Tony.
The House observed a one-minute silence.
Mr Speaker
I would like to assure the House that there will be an opportunity for all of us to pay tribute to Tony at a later date. Our sympathies are with his family and friends. He will be sadly missed across the House.
Oral Answers to Questions
(3 months, 3 weeks ago)
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Mike Amesbury (Weaver Vale) (Lab)
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
The Grenfell Tower inquiry is a statutory inquiry established under the Inquiries Act 2005. Under the Act, the drafting of an inquiry’s final report and the timing of that process are rightly matters for the independent inquiry chair. In its November 2023 newsletter, published on its website, the inquiry confirmed that
“the report will not be published before April next year but the Panel hopes to be able to send it to the Prime Minister before the next anniversary of the fire with publication soon thereafter.”
Mike Amesbury
I thank the Minister for his response. It is now nearly seven years since the Grenfell tragedy, in which 72 people lost their lives. What assurances has he had from the inquiry chair that there will be no further delays in the publication of the report? It is essential that justice is done, and I know that view is echoed across the House.
Alex Burghart
The hon. Gentleman will have seen, further to what I have just read out, the report that was published in November, in which the chair explained that rule 13 of the inquiry rules requires the inquiry
“to write to those who might be subject to criticism”
and give them fair time to respond. The newsletter states:
“The rule 13 process is proving time consuming.”
However, I hope that the hon. Gentleman will be reassured by the dates that I have read out.
Helen Hayes
The Prime Minister assured the public that the Grenfell tragedy would not be forgotten, yet across many different areas of concern—the lack of resolution on the future of the Grenfell Tower site, the many buildings that have been evacuated because of structural concerns, and the lack of justice for survivors—we see a lack of urgency in addressing the concerns raised by the inquiry. When will the Government act to rebuild public confidence and ensure that the necessary measures are taken to prevent a similar tragedy happening in future?
Alex Burghart
I thank the hon. Lady for her question, but I think it is deeply unfair to suggest that there has been a lack of urgency from the Government. The then Prime Minister announced the inquiry the day after that terrible event, and we have taken huge action to provide compensation for people and to ensure that no qualifying leaseholder living in a building above 11 metres will face the cost of remediation for unsafe cladding. Of course we are eager to get the response from the official inquiry, and we will take action thereafter.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
There are well established procedures in the Public Contracts Regulations 2015 for handling emergency procurements, which enable the Government to procure lifesaving goods and expertise. We followed those procedures in order to save lives as fast as we could during the worst pandemic in living memory. The Procurement Act 2023, which has just passed both Houses of Parliament, will introduce faster competition processes for emergency buying, reducing the reliance on direct awards while retaining and improving transparency, and the ability to act at pace in situations similar to the covid pandemic.
Mr Dhesi
I am deeply saddened by the death of our dear friend Sir Tony Lloyd.
I fear that the Procurement Act will allow for the same horrific waste of taxpayers’ money and the approach to public procurement that we experienced during the pandemic, with friends and donors to the Tory party being given the first bite of the cherry while decent local skilled businesses are increasingly sidelined by the Government’s approach. We saw that in recent analysis from the British Chambers of Commerce. Can the Minister explain why small and medium-sized enterprises are increasingly being sidelined from access to public procurement?
Alex Burghart
I have to take issue with a number of the hon. Gentleman’s points. First and foremost, the idea, constantly repeated by Opposition Members, that there was special consideration for individual companies—[Interruption.] It is very important that we go through this yet again. The hon. Gentleman has had answers on this twice in the past year, but I am going to tell him a third time: the simple fact of the matter is that everyone who applied for a contract went through the same process. Very hardworking and professional civil servants made those judgments in uniquely difficult circumstances. Frankly, I am sick of hearing slurs against their good name. [Interruption.]
Mr Speaker
If the Minister has to say it for a fourth time, I hope that we will not get the attention we are receiving today.
Debbie Abrahams
I absolutely agree with my hon. Friend the Member for Slough (Mr Dhesi). In spite of the Minister’s protestations, the evidence is to the contrary —[Interruption.]
Mr Speaker
Order. We do not need the Parliamentary Private Secretary chipping in. Is that understood?
Debbie Abrahams
The fact that Ministers’ mates can get these lucrative contracts, as last month’s evidence showed, while tens of thousands of our constituents struggle to put food on the table is an absolute disgrace. Of the £12.6 billion-worth of personal protective equipment contracts let in 2020, will the Minister confirm—I have evidence on this, so I advise him to choose his language carefully—that up to a third were fraudulent, or the result of profiteering or conflicts of interest?
Alex Burghart
I would be very interested to see the hon. Lady’s evidence. Where there is evidence of fraud, we will of course go after that, as we have done so in a number of high-profile cases. Where investigations are ongoing, we will recoup as much money as we can for the British taxpayer.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I, too, wish to put on the record my condolences to Tony Lloyd’s family. He will be missed across the House, and across the Labour movement as a whole.
The Government lost £9 billion through duff, unusable PPE. The Prime Minister, when Chancellor, signed off £7 billion-worth of dodgy covid loans. Even today, the Government are losing £10 billion to tax fraud, £6 billion to universal credit fraud, and billions more across the public sector as a whole. Is the truth not that families are paying £1,200 more on average in tax because the Government simply cannot be trusted with taxpayers’ money?
Alex Burghart
I really struggle with that line of questioning. Opposition Members have very short memories. This was the worst pandemic that we have had in over a century. The pressures on Government were immense. The accusation that we bought too much PPE is akin to people standing up in 1945 and saying that the Government bought too many Spitfires.
Vicky Ford (Chelmsford) (Con)
The Chancellor of the Duchy of Lancaster and Secretary of State in the Cabinet Office (Oliver Dowden)
I know that my right hon. Friend is particularly interested in this issue following cyber-attacks in her constituency in 2019. I can assure her that we are improving cyber-security defences across critical national infrastructure and Government organisations. Initiatives such as GovAssure, which I launched last year, are setting higher standards for resilience, and the Government’s cyber co-ordination centre is enabling collaboration and information sharing on cyber-security best practice.
Vicky Ford
I add my condolences to those expressed to Tony’s family.
Cyber-security is the biggest risk that many companies face, but many small and medium-sized businesses are not insured. Buying good-quality cyber-security insurance can involve a health check to ensure that systems are protected. The UK is the world leader in insurance and Chelmsford has the largest cluster of insurance companies outside London, so will the Minister meet me and representatives of the London insurance market to discuss how an improved quality mark for cyber-security could increase the availability of cover, ensuring that businesses and public sector bodies are better protected?
Oliver Dowden
I would be very happy to do so. As my right hon. Friend points out, cyber-insurance plays a vital role in helping to build resilience and we have a shared interest in developing it. The National Cyber Security Centre has stood up the cyber-insurance industry working group, which is working through all these issues. I have met with Lloyd’s of London, and both I and Treasury Ministers will be happy to have further such meetings.
Clive Efford (Eltham) (Lab)
Has the Secretary of State read the speech made by the Auditor General this week about cyber-security, which said that lack of investment in upgrading our infrastructure makes the Government vulnerable to cyber-attack? Is he comfortable that we are safe from such attack? Does that not show that the Tories are penny wise but pound stupid?
Oliver Dowden
I am aware of the speech and I have spoken in the House on many occasions about the challenges we face on cyber-security. It is an increasing threat landscape, but the Government are taking a range of actions to improve our cyber-security, not least GovAssure, which I announced last year. That is about going through the cyber-security of all Departments to bring it up to scratch. We published the cyber-policy handbook and we have introduced “secure by design” principles so that all new Government IT procurement projects are secure from the outset.
Dame Nia Griffith (Llanelli) (Lab)
The recent British Library incident is a stark reminder of the terrifying security risk and enormous cost of cyber-attacks, and recent ministerial answers have revealed a shockingly high number of red-rated IT systems across Government Departments. I hear the Secretary of State’s words, but given that the Government’s cyber-security strategy tells us that
“transparent central governance structures will maintain oversight and responsibility for cross-government cyber security risk”,
will he now set out the Government’s timetable for remedying this shocking situation and explain how he will keep the House updated on progress?
Oliver Dowden
We know about this in the first place because of the work undertaken by the Government to fully understand the cyber-security risks facing this country. We are better prepared than most countries around the world. None the less, in respect of the red- rated systems, we are developing remediation plans, all of which will be in place by next year. We are tracking progress and are confident that we will achieve over £1 billion in efficiency savings, in addition to achieving greater resilience by next year.
Sir David Davis (Haltemprice and Howden) (Con)
Paul Howell (Sedgefield) (Con)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
The Procurement Act 2023 will deliver simpler and more effective public sector procurement, and it will help SMEs secure a greater share of approximately £300 billion of expenditure every year. The Act includes a new duty on contracting authorities to have regard to the particular barriers facing SMEs and to consider how they can be overcome.
Sir David Davis
To some extent, SMEs have historically been blocked out by large companies. This week it was reported that the Government tried to block Fujitsu from bidding for future contracts, on the basis of woeful performance in previous contracts. Government lawyers have advised that this cannot be done, but they are wrong. Will the Government give further serious thought to blocking large companies with terrible track records, such as Fujitsu, from bidding for future contracts and, if necessary, legislate accordingly?
Alex Burghart
I thank my right hon. Friend for his question. As he will know, there are clearly defined circumstances in which the Government can exclude companies from bidding for contracts. With regard to Fujitsu, he may be interested to hear that this morning the Cabinet Office received a letter from Fujitsu voluntarily undertaking not to bid for Government contracts while the inquiry is ongoing, unless of course the Government asked it to do so.
Paul Howell
When it comes to small and medium-sized enterprises getting Government contracts, sometimes the devil is in the detail and the unintended consequences. One business has told me that the prior year turnover to contract ratio restriction in public procurement is hindering the growth of businesses such as Kromek in NETPark, Sedgefield, forcing them to surrender margins to prime contractors and meet the contracting eligibility requirements, costing the UK Government the best innovation and costing SMEs growth. Will the Minister please commit to exploring alternative measures for assessing contract eligibility, including looking at the model of the US Government and their associated agencies?
Alex Burghart
I thank my hon. Friend for his question. I know that he will have followed the passage of the Procurement Act 2023 through Parliament closely, as will businesses in his constituency—particularly SMEs, I hope. He will have seen that the Act removes unnecessary obstacles relating to audited accounts and insurance for the conditions of participation, meaning that small businesses will no longer be shut out of the procurement process or incur unnecessary costs. That duty that I referred to earlier for those procuring Government contracts to consider how to remove barriers to SMEs will really change the landscape for our small and medium-sized enterprises.
John Spellar (Warley) (Lab)
In his reply to the right hon. Member for Haltemprice and Howden (Sir David Davis), the Minister totally missed the point, because he referred to defined reasons why companies could be excluded. The Government and Parliament make the rules. They have been dragging their feet month after month, year after year, on changing that in this regard, but also in terms of supporting domestic industry, as every other major economy does. When will they sort this out and get it down to the House and into the rules, over civil service intransigence and delaying tactics?
Alex Burghart
The right hon. Gentleman will have heard what I just said to my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis). I know that, as a lover of due process, he will believe that the statutory inquiry should appropriately have the final word on this. And when it does, we will have absolutely no compunction in acting.
Jim Shannon (Strangford) (DUP)
May I, too, convey my sympathies to the family of Tony Lloyd? I thank you, Mr Speaker, for allowing us the opportunity to come together more fully as a House to pay tribute.
I thank the Minister for his answer. My constituents in Strangford, and indeed people across Northern Ireland, including a large number of small and medium-sized enterprises and businesses—they create many jobs, wage packets and opportunities—very much want to be part of this process, and I know the Minister is keen to support us. What can be done for defence procurement, for example, and also for the food and agriculture sectors, because we have great companies that have the potential to do better. Can the Minister add his support?
Alex Burghart
I certainly can. As my hon. Friend will know, Northern Ireland agreed to be part of the new procurement regime when we passed the Procurement Act, which is fantastic. Sadly, that is unlike our friends in Scotland, who will miss out on all the benefits of the best modern procurement framework in the world. That means that small and medium-sized enterprises in his constituency will now have a better opportunity to bid for Government contracts. I very much enjoyed being in Northern Ireland at the end of last year. I am going again in the next few months and would be happy to meet any businesses that he would like to put me in touch with.
David Duguid (Banff and Buchan) (Con)
The Minister for Veterans’ Affairs (Johnny Mercer)
The Government will publish our first women veterans’ strategy in the spring, focusing on the specific needs of women veterans. The Office for Veterans’ Affairs has provided £445,000 to better understand the experience of women veterans and to increase support for those who have experienced military sexual trauma.
David Duguid
I thank the right hon. Member for his answer. Will he join me in recognising female veterans who not only served themselves—as I know he did—but support veterans in their local communities, such as my constituent Morag Lightning? She is an RAF veteran who volunteers as a RAF Association welfare officer and who does too many things to mention in our community, for which she was awarded a British empire medal in the King’s new year’s honours list. Would he join me in congratulating her on that?
Johnny Mercer
I pay huge tribute to Morag and the many others who I have met over the past few years who work night and day at the coalface of veterans’ care and policy. They are the true heroes in looking after our veterans. It is the nation’s responsibility, and those who have left the military often set the example for how we look after our veterans. I pay tribute to her and the hundreds and thousands of others across the country who spend night and day helping veterans.
Stephanie Peacock (Barnsley East) (Lab)
I welcome the women veterans’ strategy and the update that the Minister has given on it. Will the strategy take into account the findings of the review of veterans’ welfare services, which I was pleased the Government carried out?
Johnny Mercer
Yes, of course. The review of welfare services for veterans is the most significant review that has happened ever on the statutory service of veterans’ affairs across the Ministry of Defence and across Government. It has of course been a concern of mine for some time that female veterans have not felt as included and as part of the veterans’ community as I would want them to feel. I am absolutely determined to over-correct that and ensure that women veterans are looked after and are as proud as I am of their service and of being in the veteran community.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Centre for Military Women’s Research has identified numerous gaps in our understanding of women’s experiences in the military, the consequent problems they face and the reluctance to pursue research on those matters. Is it right to presume that the women veterans’ strategy—I hear what the Minister says about his genuine concern on these matters—will be his main vehicle for ensuring that we tackle those issues?
Johnny Mercer
Absolutely; the point of the strategy, essentially, is to ensure that the voices that have been unheard for too long are heard. I know that there is unmet need and pain in the female veteran community. There is also huge pride, and there are extraordinary examples of those who have served and have gone on to achieve extraordinary things in their lives. We will of course look to achieve balance; I want to ensure that female veterans are correctly catered for and looked after in this country. I want it to be the best country in the world to be a veteran—and that is for all veterans, female or male, across the piece, irrespective of cap badge. I am determined to keep going until we get there.
Feryal Clark (Enfield North) (Lab)
The Chancellor of the Duchy of Lancaster and Secretary of State in the Cabinet Office (Oliver Dowden)
We are protecting our public services from cyber-threats through our world-leading Government cyber-security strategy. We are also tackling the threat at source. Last year alone, we sanctioned 18 criminals responsible for spreading a prolific ransomware strain, and we exposed the Russian intelligence services for their attempts to target high-profile individuals and entities through cyber-operations.
Feryal Clark
I thank the Secretary of State for his response. In the wake of the recent attack on the British Library, will he tell us what assessment the Government have made of potential cyber-attacks on other non-departmental public bodies? How will he ensure that they are not vulnerable to similar attacks and that the country is not brought to a standstill?
Oliver Dowden
The hon. Lady is absolutely right to highlight that attack. It demonstrates that such attacks can affect not just central Government; any agency of government can be subject to them. Indeed, we discussed it at Cabinet just this week. I continue to co-ordinate activity through the ministerial cyber board, and the National Cyber Security Centre works closely with Government agencies, including the British Library, to ensure that they are as robustly prepared as they can be.
Nick Smith (Blaenau Gwent) (Lab)
The Minister without Portfolio (Esther McVey)
There is an established process in place for the declaration and management of interests held by Ministers, as set out in the ministerial code. The independent adviser on ministers’ interests publishes a twice-yearly list of Ministers’ interests. Since 2023, interim updates to the list are also issued as needed. The latest list was published in December.
Nick Smith
Public appointment declarations are important. As the public face of scandal-ridden Greensill Capital, it has been said of Lord Cameron that he earned $10 million, was paid via an offshore trust and enjoyed many personal flights on Greensill’s planes. Yet when challenged on his remunerations, Lord Cameron refused to answer, saying that he had been a private citizen and had declared all the information for the Register of Members’ Financial Interests. The reply that I received from the independent adviser about all that said that, on appointment, Ministers must declare their private interests. I ask the Minister how a Member can get answers to questions about Lord Cameron’s employment before his appointment. Surely, if someone gets a new public job, answers to fair questions should be laid out for us all to see?
Esther McVey
As the hon. Member says, integrity is vital in this place and we all adhere to high standards. He will also know that there is an established regime in place for those declarations. The Foreign Secretary has adhered to those and, as he has said, he has just one job now, Foreign Secretary of the United Kingdom. He is very proud to have that job and to work with the Prime Minister to try to make sure our country is as safe and prosperous as possible.
Kirsty Blackman (Aberdeen North) (SNP)
Thank you, Mr Speaker. Please accept my apologies if my voice gives out part-way through my question; I will do my best. Our thoughts in the SNP are with Tony Lloyd’s family, his constituents and all those feeling the pain of his loss today.
The Prime Minister and four Ministers, including the Foreign Secretary, hold their wealth in blind trusts or managements. The “Ministerial Code” says:
“Ministers must ensure that no conflict arises, or appears to arise, between their public duties and their private interests”.
How can the public trust their politicians when that money is hidden from public scrutiny?
Esther McVey
I repeat that there are established regimes in place for the declaration and management of interests, and they are overseen by an independent adviser, who publishes reports twice a year.
Kirsty Blackman
I read the report that was published in December. Lord Cameron lobbied on behalf of the Chinese state’s belt and road initiative, aiding the geopolitical and economic interests of the Chinese Government. The 49-day Prime Minister also sought to export defence equipment to China. If there is nothing to fear, there is nothing to hide. Will any new requirement be placed on UK politicians to disclose in full interests from foreign states, even when those are in blind trusts or managements?
Esther McVey
I refer the hon. Lady to the latest list of Ministers’ interests, which was published on 14 December 2023 and included the relevant interests of all Ministers forming the Government as of 14 December 2023, including the Foreign Secretary. Our clear-eyed position on China remains unchanged and our approach of engaging directly and robustly with China in the UK national interest is the right one and is firmly in line with that of our G7 and Five Eyes partners.
Chris Stephens (Glasgow South West) (SNP)
The Chancellor of the Duchy of Lancaster and Secretary of State in the Cabinet Office (Oliver Dowden)
I discuss this area regularly with Cabinet colleagues. The Incubator for Artificial Intelligence, which I announced last year, will recruit experts from the private sector, academia and beyond, who will work with Departments to rapidly and responsibly develop new applications for artificial intelligence across Government, as part of radical plans to harness the potential of AI to improve lives and public services.
Chris Stephens
I join others in paying tribute to the great Sir Tony Lloyd; our thoughts and prayers are with his family today.
I thank the Minister for his answer. As the Government have started work on an artificial intelligence hit squad to eliminate civil service jobs and replace human labour, it is of urgent importance that they lay out the safeguards they will enact. The childcare benefit scandal in the Netherlands in 2021, where artificial intelligence baked in racial profiling that discriminated against minorities, highlights the necessity of strict controls and protections, so will the Minister reveal what steps they are taking to prevent the harmful use of artificial intelligence?
Oliver Dowden
It is not the case that this is about taking jobs off civil servants; it is to enable them to do their jobs better and more efficiently for the benefit of the public we serve in this place. In respect of the measures that we are taking to ensure that we follow best practice, the Government’s Central Digital and Data Office is ensuring a high delivery of quality and regular testing of that software throughout all stages of development. In addition, there is a service assessment model, so we are taking a number of steps to ensure that we guard against the risks that the hon. Gentleman highlights.
Samantha Dixon (City of Chester) (Lab)
The Minister for the Cabinet Office and Paymaster General (John Glen)
As I set out on 18 December, I am pleased with the progress that we have made in appointing an expert group to assist on technical detailed considerations of those recommendations. It was announced yesterday that the final report will be published on 20 May, and the Government are committed to updating Parliament on the next steps within 25 sitting days of publication.
Samantha Dixon
The publication of the final report into the infected blood scandal has yet again been delayed, causing dismay for hundreds of people, including some of my Chester constituents, who are still waiting for justice. In this matter, time is precious. The Government committed to introducing primary legislation early in the new year to enable the establishment of the compensation scheme. Given that the House has shown its majority support, will the Minister confirm that the Government will now get on with it?
John Glen
I take the will of the House very seriously. That vote was on 4 December as part of the Victims and Prisoners Bill, which will now be working through its next stage in the other place the week after next. I have been working with colleagues across Government to ensure that we are able to respond appropriately at that time.
Sir Peter Bottomley (Worthing West) (Con)
The House understands that it is the Minister’s Department that has to co-ordinate government, and that is not an easy thing to do. Does he understand that Sir Robert Francis and Sir Brian Langstaff have made it absolutely clear that the final report will say nothing more about compensation? It is not just the victims of the infected blood scandal who matter; so do the families of those who have already died—they are dying as well. May I say, on behalf of the all-party parliamentary group on haemophilia and contaminated blood—I am sure that the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) would say the same—that 25 days after the report is published in May is too long to wait? People want certainty and need support.
John Glen
I thank my hon. Friend for his empathy with the complexity of delivering this. I recognise the urgency, of course. That is why, over the recess, I had several meetings with officials. We are moving forward with the appointment of the clinical, legal and care experts. However, I recognise that his focus and that of colleagues across the House is on the speed of delivery of payments. Obviously, we made those interim payments further to the first interim report recommendations in October 2022. I will continue to have meetings with colleagues to move this forward as quickly as I can.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
The Cabinet Office does not hold data centrally regarding personal smartphone use. We are committed to ensuring that Government business is conducted securely and to supporting individuals in meeting their security responsibilities. In March last year, we published guidance concerning the use of non-corporate communication channels for Government business, which set out considerations around the use of private devices.
Mr Carmichael
I may be part of a very small and shrinking group, but I think it is sensible that Ministers, officials and advisers should be able to share their thinking and thoughts in private on occasion. However, the truth of matter is that the constant drip of stories—whether about Boris Johnson, Nicola Sturgeon or anybody else—and WhatsApp messages not being available to hold people accountable, is harming public confidence in government and politics. Will the Minister look again at this to see how we can have good, accountable and transparent government?
Alex Burghart
The right hon. Gentleman raised important points. I draw his attention to the document we published last year: “Using non-corporate communication channels (e.g. WhatsApp, private email, SMS) for government business”. I think he will be particularly interested in the summary table on page two.
Duncan Baker (North Norfolk) (Con)
The Minister without Portfolio (Esther McVey)
We have made a number of important changes to increase transparency. We have launched a new website and online form to make it easier for anyone to make a nomination. We have brought the recruitment of the independent honours committees, which make the honours recommendations, into line with the governance code for public appointments, and we have bolstered probity checks through new and renewed agreements with vetting bodies.
Duncan Baker
The Post Office scandal and Paula Vennells’ handing back of her CBE has shone a real light on the need for more scrutiny and transparency in the honours system. Does the Minister agree that the vetting process—the scrutiny and transparency—is needed more than ever in our honours system to protect its integrity?
Esther McVey
I do agree. Given that my hon. Friend is a former sub-postmaster, I can fully understand why he feels so strongly about this matter; he is absolutely right to do so, and I thank him for all the work he has done for his fellow postmasters and sub-postmasters. It is important that we protect the integrity of the honours system, which is something to which this Government are committed. We have undertaken a range of actions to strengthen checks, including expanding criminal record checks and working closely with regulators and other bodies to ensure full due diligence for all nominees.
Nick Thomas-Symonds (Torfaen) (Lab)
The right hon. Lady has just spoken about the integrity of the honours system, but the Government have failed to be transparent around the interests of Baroness Mone in the PPE Medpro contracts, where over £200 million was wasted. We have no answer from the Government as to why the links were not made public at the time; no answer as to why a Government Minister did not correct the wrong impression that had been given in public; and no answer in response to the allegation that the Government indicated a National Crime Agency investigation would be dropped if the civil claim was settled. Back on 18 December, Labour called on the Government to order an urgent investigation into this matter to give taxpayers the answers they deserve, but the Deputy Prime Minister has not even responded to the letter. Is the reason the Government are so afraid of an investigation that it will just show, once again, Tory sleaze?
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
We have responded.
Esther McVey
I will say from the Dispatch Box that the answer has been sent and given. If it needs to be reissued, we will do so, but it has been sent.
Baroness Mone has taken leave of absence from the Lords, and there are separate investigations into the allegations against her. In my mind, if she is found guilty of wrongdoing, she needs to resign membership of the Lords—the public would expect no less. The House of Lords Reform Act 2014 ensures that a Member convicted of serious offences will cease to be a Member of the House of the Lords, and that is what we want to see. We do not want people in Parliament who bring either House into disrepute: they need to leave.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Minister for Veterans’ Affairs (Johnny Mercer)
Veterans’ employment is at an all-time high, with 87% of those leaving service finding employment within six months. We have recently launched the employers’ guide to hiring veterans, showcasing best practice on how employers can benefit from veterans’ skills and qualifications. I regularly champion veterans’ employment to Cabinet colleagues, as employing veterans is one of the best decisions that businesses can make.
Gerald Jones
Is it not the case that, after 13 years of Conservative Government, Ministers have created a postcode lottery for veterans and halved employment support for them? Specifically, will the Minister tell the House how many veterans have been employed as a result of the civil service interview scheme for veterans?
Johnny Mercer
When it comes to veterans’ care in this country and how it has changed in the past 13 years, it is hard to take the hon. Gentleman seriously—those services have been transformed. The number of those employed through the civil service scheme is, I believe, over 1,000, but I will write to him with the correct figure. Having a job is the No. 1 factor that improves the life chances of any veteran in this country; it is the real focus of what we are doing at the Office of Veterans’ Affairs, and I am incredibly proud of those efforts. Again, I lament the fact that that is not reflected by Labour. I want to see that change as we go into the next election, so that veterans know that whoever wins it, their interests will be represented properly.
Ashley Dalton (West Lancashire) (Lab)
The Chancellor of the Duchy of Lancaster and Secretary of State in the Cabinet Office (Oliver Dowden)
This week, I signed an agreement on biological security between the United Kingdom and the United States. This strategic dialogue will mean sharing more data, collaborating on research and co-ordinating action, preparing for a whole spectrum of biological threats. I also signed a memorandum of co-operation on cyber partnership with Japan, helping to fulfil a key element of the Hiroshima accord.
This week, the Government are making available a free portrait of His Majesty the King. Available to all public buildings, this portrait will hang in schools, police stations and local authorities, serving as a reminder of the country’s ultimate public service. I am sure the whole House will wish to join me in wishing His Majesty the King and Her Royal Highness the Princess of Wales very swift recoveries.
Ashley Dalton
It emerged this week that Avanti West Coast bosses were recently caught giving PowerPoint presentations bragging about receiving free money from the Government. Is this value for money?
Oliver Dowden
I am not aware of those allegations, but they sound very concerning and I am very happy to look into them on behalf of the hon. Lady.
Dr Luke Evans (Bosworth) (Con)
Oliver Dowden
Yes, the service is available, but it is up to local responders to determine whether to put in a request for it. In this case, they did not do so. I would commend the local responders—whether the Environment Agency, the police or the fire service—for their response. That tool is available to them should they need it.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I echo the condolences that have been given to the family of Tony Lloyd.
Further to the question about flooding, yesterday the Public Accounts Committee said that over 200,000 properties in England were vulnerable to flooding, and the budget for flood protection is now expected to cover 40% fewer properties than the Government originally said it would. We have seen the devastation that flooding can do in recent weeks and the terrible consequences for those affected. Given the Cabinet Office’s responsibility for resilience, can the Secretary of State explain why the plan is so far behind schedule and what the Government will do to protect the 200,000 properties that may now be left without adequate flood protection?
Oliver Dowden
As the right hon. Gentleman highlights, the Cabinet Office has responsibility for resilience under a lead Government Department model, but the Department for Environment, Food and Rural Affairs is responsible for individual flood defences. We have put record sums into flood defences and we have provided record flood defence building. Clearly, there is more to do to allocate those resources, but we have made considerable progress.
Mr McFadden
This week, Gareth Davies, the head of the National Audit Office, said that Ministers could save up to £20 billion a year of taxpayers’ money by modernising IT systems, tackling fraud and better management of major projects such as HS2. He also said that out-of-date IT exposes the UK to a greater risk of cyber-attacks, and we have heard reference this morning to the cyber-attack on the British Library. Why is it that time after time, the Government reach for tax rises—such rises will leave a typical family paying £1,200 a year more in tax—instead of saving money by getting a grip of these IT projects and major infrastructure projects, as has been called for by the National Audit Office?
Oliver Dowden
That is precisely why we have created i.AI—the Incubator for Artificial Intelligence—under my leadership to make sure that we apply artificial intelligence to drive down the cost of public services and to improve outputs. I say gently to the right hon. Gentleman that it is a bit rich to be taking lectures from the Labour party, which wasted over £26 billion when it was in government on failed IT projects—failed IT projects in the NHS, the Ministry of Defence and DEFRA. And where was the right hon. Gentleman? He was sat in Downing Street while that happened.
Harriett Baldwin (West Worcestershire) (Con)
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
I thank my hon. Friend for her question and the work she has done in this area; I know she has thought about it a great deal. I will be writing to her in due course. It is a complicated area of constitutional law, but we appreciate the position from which she is coming.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Oliver Dowden
That is precisely why we set up the Public Sector Fraud Authority and I can update the House that in its first year it met more than double its target. In addition, there are both civil and criminal investigations ongoing to bring every person responsible to justice if they have defrauded the taxpayer.
Dame Caroline Dinenage (Gosport) (Con)
My constituency boasts the highest number of veterans of any in the UK, with about 12% of people having served, but the veterans agency is not assisting me and other MPs like me in serving my constituents, because when I raise issues with it, it insists on responding via ministerial correspondence from the Ministry of Defence. There can therefore be no direct interface with it, making it very time-consuming and frustrating for my constituents. Will the Minister get the veterans agency to introduce an MPs helpline so that veterans’ concerns can be answered quickly and efficiently?
The Minister for Veterans’ Affairs (Johnny Mercer)
I believe my hon. Friend is referring to Veterans UK, which is being retired because I am well aware of the plethora of issues. We have staff there who work incredibly hard but with very poor resource, and consequently the experience of veterans has not been what I want it to be. We are retiring that brand and completely revamping those services. I take on board the point about an MPs hotline, which exists in other Departments, and I can confirm that we are looking to establish the same thing in the new organisation to meet these claims.
Chris Stephens (Glasgow South West) (SNP)
The Minister for the Cabinet Office and Paymaster General (John Glen)
The next stage of the Victims and Prisoners Bill in the other place will be the week after next, and that is where the Government will make clear their response to what the Commons has decided. As I said to my hon. Friend the Member for Worthing West (Sir Peter Bottomley) a few moments ago, the issue of further interim payments will need to be considered in the round as the Government consider the recommendations of the second interim report. We are very aware of the urgency of this. However, as I am sure the hon. Gentleman will understand, there is a lot of complexity with respect to the different cohorts and we are working on those as rapidly as we can with the experts now in place.
Duncan Baker (North Norfolk) (Con)
Ending veteran homelessness and rough sleeping has been an absolute passion of the veterans Minister. Can he give us an update on how this is faring after the festive period?
Johnny Mercer
We made a commitment that this Christmas we would end rough sleeping for veterans in the UK because of a lack of provision, and we met that promise. We housed 407 of the most desperate, most vulnerable veterans across the UK and I am incredibly proud of that. The charge towards ending all homelessness across the UK is clearly something we are all engaged in, but I am incredibly proud of the team at Op Fortitude. I pay tribute to Lee Buss-Blair and the Riverside Group who worked throughout Christmas to achieve that objective. It is a fantastic base to build from and I look forward to the day when these services are no longer required.
Helen Hayes (Dulwich and West Norwood) (Lab)
Alex Burghart
Better competition and better procurement are at the heart of the Procurement Act 2023, which the hon. Lady will have seen go through the House of Commons and the House of Lords last year. The Act creates a world-leading framework for the good use of public money in acquiring goods and services.
Jessica Morden (Newport East) (Lab)
John Glen
As I have said, if the House of Commons has indicated its will by the amendment, that piece of legislation moves to the House of Lords and the Government will respond at that point. That is the week after next. That is the process of the House. I have recognised the need to ensure that we get the clinical, legal and care experts in place. They are in place, and they are working on some of the complex issues the hon. Lady alludes to. The psychological support is now in place, but I am doing everything I can in every dimension of this complicated problem to deliver as quickly as I can.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I have just listened to the Minister’s response, and I appreciate that the situation is complex, but people are dying. My constituent contacted me earlier this week. He has renal failure and cirrhosis of the liver. He wrote asking for
“faster resolution to the infected blood scandal compensation before it is too late for myself and others to see full and final resolution”.
It might be too late for my constituent—he cannot wait two more weeks—but can the Minister outline how many people have received interim payments and how many are still outstanding?
John Glen
A large number of payments were made available quickly in the last quarter of 2022. I fully recognise the absolute tragedy that this is. Every death is a tragedy. This is the biggest scandal in the NHS’s history. I recognise and acknowledge that. The victims’ organisations said that there were 141 deaths last year, and I am doing everything I can to find solutions as quickly as possible.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Arm’s length bodies across Government spend more than £200 billion a year, and my Committee has been looking at that issue. The Government launched the public bodies review programme as part of their latest drive to look at quangos, but there is little in the public domain. Will the Minister commit to publishing the review of individual quangos as it goes through? What will the final publication date be for the outcome of the review?
John Glen
In the spring statement in March 2022, the review of public bodies was announced, as the hon. Lady knows. That will give us significant savings. There are 125 arm’s length body reviews, covering 90% of arm’s length body expenditure. Honestly, I am not familiar with the exact protocols around publication, but I am happy to look into it, and I will come back to her.
Andrew Bridgen (North West Leicestershire) (Ind)
In 2012, the Cabinet Office rejected my request that it fund the forensic investigation into the Horizon IT system by Second Sight. Indeed, the Cabinet Office insisted that the Post Office pay for its own investigation, which ultimately allowed the Post Office to try to control and coerce the lead investigator Ron Warmington, thus delaying justice for the sub-postmasters. Will the Minister look into the reasoning behind this historic decision and write to me about it, please?
Jim Shannon (Strangford) (DUP)
What discussions has the Minister had with the Police Service of Northern Ireland’s cyber protect team in relation to learning the hard lessons that have arisen from the numerous data breaches of office information across the PSNI and throughout the United Kingdom?
Oliver Dowden
This was an appalling incident, as the hon. Gentleman knows, and it highlighted big flaws in how data is handled in respect of freedom of information requests. We have issued further guidance on how such requests should be handled, but I continue to work with officials in my Department and across Government to make sure that that sort of incident never happens again.
Mr Speaker
That completes Cabinet Office questions, and we will soon be going on to the next set of questions. As I said, next week we will be paying tribute to our friend Tony Lloyd following his tragic death, but I have no doubt that the shadow Leader of the House, who took over his previous seat, will have a comment to make. I am just watching the clock tick down—we are nearly there.
Business of the House
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
We head now to business questions. I call the shadow Leader of the House.
Lucy Powell (Manchester Central) (Lab/Co-op)
Beautifully done, Mr Speaker. May I ask the Leader of the House for the business for next week?
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 22 January will include:
Monday 22 January—Second reading of the Offshore Petroleum Licensing Bill.
Tuesday 23 January—Opposition day (3rd allotted day). Debate on a motion in the name of the Official Opposition, subject to be announced.
Wednesday 24 January—General debate on Defence and International Affairs.
Thursday 25 January—General debate on Holocaust Memorial Day. The subject for this debate was determined by the Backbench Business Committee.
Friday 26 January—Private Members’ Bills.
The provisional business for the week commencing 29 January includes:
Monday 29 January—Second reading of the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords].
Tuesday 30 January—Remaining stages of the Media Bill.
Lucy Powell
I thank the Leader of the House. I want to start by paying my own tribute to my dear and hon. Friend Sir Tony Lloyd. The words spoken about Tony since his passing yesterday, which have come from across this House and the political divide, really are a reflection of the special person he was. He was kind, sincere and driven by his deep values and principles. He worked with everyone necessary to further a cause, and always with integrity and humanity.
Tony was also my predecessor as MP for Manchester Central. As I said many years ago in my maiden speech, he was a brilliant man, first elected in 1983, serving Stretford and then Manchester Central for 29 years before being elected as police and crime commissioner for Greater Manchester. He then returned to Parliament to serve the people of Rochdale from 2017. He was an incredibly hard act to follow; I still often find myself in his shadow. For the first few years, I had to accept the frequent complaint that I just was not as good. Some of my constituents still say, “You’re no Tony Lloyd, are you?” He was a proud Mancunian—but we did disagree on football as he was a long-standing season ticket holder for United.
We all knew what Tony stood for and the causes he held dear and tirelessly campaigned for, but in all the years I knew him I cannot remember ever hearing him raise his voice. He went about his politics differently. For him, politics was all about relationships and discussion, whether in this place, internationally, on the street or in his beloved pub. That is what earned him so much loyalty from everyone who knew him—because he was such a thoroughly nice bloke. My thoughts are with his family, his friends and his staff at this difficult time. [Hon. Members: “Hear, hear!”]
Tony was not afraid to champion little-heard or unpopular causes, such as his campaigning on mesothelioma. One of his last acts just this week was to join more than 100 Members and peers and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) in calling for urgent action on infected blood compensation. We have raised that issue many times in business questions, but given Sir Brian Langstaff’s statement, which was issued yesterday, it needs raising again. I just heard questions on it during Cabinet Office questions.
Sir Brian, the chair of the inquiry, has unfortunately delayed publication of the final report until May. However, he also made it absolutely clear that his final report on the compensation scheme has already been published—in April last year—and that that aspect of the inquiry and its findings will not change. Given that, may I ask the Leader of the House once again to arrange for a statement from the Cabinet Office on establishing the compensation scheme? She and the Government cannot keep hiding behind the final report or complexity when the chair has made it crystal clear that his recommendations on the scheme are now published. I must say that the answers I heard in Cabinet Office questions just were not good enough. They felt like dodging, unfortunately, yet the will of the House is clear on this subject.
This week I happened upon an article by the Leader of the House in The News Portsmouth, bemoaning the fact that nothing seems to work anymore. It was remarkably similar to a big speech she made a year ago this week to the Institute for Government, making similar arguments that ordinary people feel the system is rigged against them. I agree with her and, after the Post Office scandal, I am sure many others do, but it left me wondering what her Government are doing about it, and who she thinks is responsible. In a week when Avanti is bragging about “free money” from the taxpayer while rail passengers suffer poor services, whose responsibility does she think that is? In a week when the National Audit Office warned that the Government are wasting tens of billions of pounds on crumbling infrastructure and badly run projects, whose responsibility does she think that is?
The Leader of the House says that she wants to focus on improving the quality, accountability and accessibility of healthcare, so in a week when it has been reported that the NHS is spending a staggering £10 billion a year on agency staff, whose responsibility does she think that is? Whose responsibility is it that millions of people are waiting longer for treatment and cannot access a GP? Before she embarrassingly blames doctors or Welsh Labour for the problems of the English NHS, will she be honest about her Government’s terrible record, and tell us what she is doing to fix it?
Penny Mordaunt
The whole House will soon have an opportunity to pay tribute to our late colleague Tony Lloyd. People may not know, and the hon. Lady may not have had an opportunity to do that, so I thank her for her tribute today. Let me place on record my deepest sympathies for all who loved him. The tributes paid to him already illustrate his gentle and kind nature, and the breadth and depth of his public service. As the hon. Lady testified, he was still doing that right up until the end.
I also thank the families of those held hostage by Hamas for again coming to Parliament this week to talk about their loved ones. We will all keep them at the forefront of our minds and do all we can to bring them home. I remind the House that Kfir Bibas turns one today in captivity. I also wish both His Majesty the King and Her Royal Highness the Princess of Wales a speedy recovery.
I thank the hon. Lady for again raising the important issue of infected blood. This session follows Cabinet Office questions, in which a number of things were placed on record both by the Paymaster General and by Members. I again remind the House that the compensation study was established acknowledging the moral case for compensation, that the study should be concurrent to the inquiry, and that the inquiry and the study could make reference to each other. The reason for that was to ensure that we could arrive as swiftly as possible at a compensation package for all those affected by this appalling scandal. I do not disagree with any hon. Member who believes that we should not have to wait.
As the co-chair of the all-party parliamentary group on haemophilia and contaminated blood, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), said in the Cabinet Office questions, the Government now have all the information to arrive at a compensation scheme in those inquiries, which is why the Paymaster General is making progress on exactly that. We are acutely aware of that moral imperative and what both the study and the inquiry have said on this matter so far. This House has also been clear in its desire to see that appalling scandal resolved quickly. I refer the hon. Lady to what the Paymaster General just said at the Dispatch Box with regard to legislation, but I am kept regularly informed of progress that he, the Treasury and other Departments are making on this matter. I expect more news on that important point in the coming weeks.
The hon. Lady referred to my article, and I thank her for the publicity. I argued that we should ensure that the consumer is king again. We have some challenging new monopolies—the natural monopolies of water companies —and the online giants, and we need to ensure that the customer is king. That is what the Government have been doing, through our legislation to improve competition and the work we are taking forward with regulators on a whole raft of things, from energy bills to other consumer issues. We can do because we have a plan. We have a plan on all the issues facing the public.
I expect praise from those on my own Benches, but I was much encouraged at the praise we heard yesterday from the Opposition Benches. One Labour Member, the hon. Member for Putney (Fleur Anderson), was urging a focus on reducing the backlog and ending hotel use. She said:
“The Conservatives started this work by employing some temporary new officers and it started to work”.
She went on:
“The Tories have also started smashing the gangs through the work they are doing in France.”—[Official Report, 17 January 2023; Vol. 743, c. 972.]
She was right. On that priority, she could have added that crossings are down by 36% this year, the Albanian returns scheme has seen a 93% fall in arrivals, and we have dismantled, alongside the French, 82 organised criminal gangs. We are making progress on that and other areas. The health statistics announced show that the waiting list figures the hon. Member for Manchester Central (Lucy Powell) mentioned are coming down. These are not easy problems, particularly because of the recovery from the pandemic and the global situation on prices and supply chains, but we have a plan and we are methodically working through it with zero assistance from the Labour party.
On any issue and priority, we are sticking to that plan. The reason we can do that and are not being blown off course is that we have some principles backing it up. Unlike the Labour party, we understand our duty to the people of this country, whether that is setting up inquiries into infected blood and the Horizon scandal, or on the people’s priorities, which are also the Prime Minister’s five top priorities. We have never wavered in our duty to the people of this country. We have never wavered in our support to protect our country’s borders and protect the defence of the realm, unlike the hon. Lady’s party which has six current shadow Cabinet members who voted against our continuous at-sea deterrent. We are working to strengthen our borders and stop the boats. The Labour party has voted consistently against that legislation. We believe in supporting minimum service standards on vital public health services, including health and transport. Labour has opposed that. And we have taken tough decisions on helping the economy, including controlling borrowing, which is why inflation is down by 60% since October and the Office for Budget Responsibility forecasts inflation falling to 2.8% this year. Labour’s stated policy on fiscal rules and spending means that it will have to raise taxes if it wants to stick to those fiscal rules, but it has not said what and when.
On all those things, we have a plan and it is working. We are going to stick to it, despite what the Labour party is doing. Labour has no plan, just a big fat bill for taxpayers.
Sir Peter Bottomley (Worthing West) (Con)
I agree with a great deal of what the shadow Leader of the House, the hon. Member for Manchester Central (Lucy Powell) said about Tony Lloyd, and I agree with much, if not all, that my right hon. Friend the Leader of the House said on party politics, having a plan and delivering for the British people.
Next week, the Select Committee on the Holocaust Memorial Bill continues its hearings. It had three sessions this week and transcripts can be made available in the Vote Office. One issue that comes up is the Government’s continued failure to publish the minutes of the UK Holocaust Memorial Foundation from 2015 to 2016. There was a consultation on a site for the proposed memorial and learning centre. The consultants analysed the responses and shortlisted three. Two days later the Government produced an alternative option, which was Victoria Tower Gardens.
No one outside the Department has seen the comparisons between the merits of Victoria Tower Gardens and other possible sites. No one has seen the minutes of discussion changing the specification behind the backs of the public. Will my right hon. Friend look to see the redactions made by the Department for Environment, Food and Rural Affairs and why it is continuing to instruct lawyers to oppose the freedom of information request, which is vital to the work of the Select Committee? Through her, may I recommend to the Select Committee asking for that information and making it public?
Mr Speaker
I presume that the Father of the House is asking for a debate on the matter as well.
Penny Mordaunt
I know that this issue, which my hon. Friend raises almost weekly, is of great concern to him, and that he wants to ensure that the final outcome of the process is as good as it can be. I will again make sure that the Secretary of State for Levelling Up, Housing and Communities has heard what he has said. The next session of questions to the Secretary of State will be on 22 January, and my hon. Friend may wish to raise the matter with him directly. This is the kind of information that should be in the public domain, so that people can make good decisions, although on some matters—relating to security concerns, for example—it may be sensible to redact.
Deidre Brock (Edinburgh North and Leith) (SNP)
Let me start by associating myself with all the remarks about Tony Lloyd, whom I always found to be a very good and decent man.
Once again, I am indebted to the Leader of the House. Her eccentric video last week, in which she joked about Tupperware and the Stone of Destiny, excited quite a response in Scotland. “Why is she always on about Scotland?” people ask. The Tories have given us a joke Minister for common sense, and now it looks as if we have a Minister for clickbait.
Scotland does seem to be just a big joke for the Leader of the House. The brief seems clear: to rubbish and insult Scots every week during business questions. Of course she is not alone—this seems to be Tory policy nowadays—but she is adding value now by producing full-page articles in the papers about how awful Scotland is, along with a new clickbait video every week. All that effort, Mr Speaker! Although, given the very bad news for her party in this week's YouGov poll, perhaps these joke videos are in fact auditions. Perhaps it is not so much “stand up and fight” as stand-up comedian.
Meanwhile, the record of the right hon. Lady’s own Government is absolutely nothing to joke about, with destitution rising, doctors on strike crippling the English NHS, sea coasts foul with pollution, inhumane treatment of asylum seekers and the breaching of international law, unresolved scandals piling up, and the crushing impact of one of the worst Tory jokes of all, Brexit. But before we are treated to—oh, I don’t know, perhaps an attack on the Scottish Government and praise for the bullish actions of the zombie Scotland Office—let me say this. Surely Scotland can find a better use for—what is it now, over 12 million quid?—than funding that ever-expanding propaganda unit beavering away behind the scenes, undermining the work of the Scottish Parliament and, of course, assisting the Leader of the House with her scripts each week.
Closer to this place, however, we have the Westminster joke of the other place, with its 860 or so ermine-clad peers but one notable absentee. The right hon. Lady’s Scottish Tory friend and colleague Baroness Mone is currently not a sitting Member, because she has taken leave of absence by her own choice. It is being reported in the Daily Record that Baroness Mone claims she is still a Conservative as far as she is concerned, because she never had the Whip removed. Can the Leader of the House confirm that if Baroness Mone resumes her position in the other place tomorrow, as I believe she is entitled to do, she can sit as a Conservative? If not, exactly when was the Whip removed? Can the Leader of the House make time to answer that question before reading out this week's hilarious clickbait script?
Penny Mordaunt
The hon. Lady should thank me. I have been giving her publicity that money cannot buy, and I think it is encouraging that we have generated such a following and such an interest in what goes on in the Chamber during business questions. Let me make it clear to the hon. Lady that I am not talking Scotland down. I am talking the Scottish National party down, because it has been an unmitigated disaster for Scotland. The stoicism of the Scottish people in dealing with their inept Government deserves great credit.
Each week the hon. Lady talks about our record on delivery and invites me to make the comparison with the Scottish Government. I shall try to do so this week without mentioning the appalling record of the SNP Government, and just invite people to contrast our record with theirs.
In the UK, we have the largest rail infrastructure investment since Victorian times. We have massive regeneration projects across the UK. More than 1,000 miles of major roads have been refurbished; compare that with the A9, please. We have 20 times as much offshore wind capacity as we had when we entered office. Eighteen million households have full-fibre broadband. How is the Scottish Government’s broadband rollout going? Then there are our hospitals, mental health facilities, 50 new surgical hubs, new nuclear power stations and record investments in home and flood defences, and in the coming financial year our research and development spend will be about £20 billion.
In 2010, the strategic defence and security review greenlit a couple of aircraft carriers and, six years later, one was commissioned. That complex 65,000-tonne warship was built through the carrier alliance, a wonderful example of the UK supply chain working together. After the same six-year timeframe, the SNP is still building a couple of ferries, which are £308 million over budget. For context, the overspend is three times the original budget, and I now understand that these pioneering green vessels will run on diesel.
The SNP Government have been an unmitigated disaster for Scotland. They have been found out. They are incapable and incorrigible, and now they are in trouble.
The hon. Lady’s final question is a matter for the House of Lords, not the House of Commons.
Sir Christopher Chope (Christchurch) (Con)
The Parliamentary Assembly of the Council of Europe will be meeting in Strasbourg next week, which means that Members on the UK delegation will not be here for the tributes to Tony Lloyd. He was latterly an effective and diligent member of that Assembly, and I hope we will be able to pay our tributes in Strasbourg. We miss his charm and humanity. As a fellow Member who first entered this House in 1983, I had the privilege of knowing him for a very long time.
Will the Leader of the House initiate a debate on the effectiveness or otherwise of integrated care boards? The rationale for the boards was to deal with the interaction between health and social care and to reduce the incidence of bed-blocking. Last week we heard that no fewer than 353 hospital beds in Dorset are occupied by people who do not need them, at a cost of over £100,000 a day, let alone the opportunity cost of missed operations and so on. This is intolerable and shows that the system of integrated care is not working. Can we have a debate?
Penny Mordaunt
I thank my hon. Friend for putting on record his beautiful tribute to Tony Lloyd. It would be wonderful if such tributes could also be heard in Strasbourg.
My hon. Friend is right that it is vital that commissioners are held to account. Our NHS will not function properly without accountability and choice. The former Secretary of State for Health and Social Care, my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), undertook work on patient outcomes data and the quality of commissioning in each board and across the UK, which will help to drive accountability. Now that we have that data, I am sure it will make for a very interesting debate. My hon. Friend knows how to apply for a debate, and he may also wish to raise this matter with the Secretary of State on 23 January.
Ian Mearns (Gateshead) (Lab)
I add my condolences to the family and friends of Tony Lloyd. Last night, in the local I frequent in Kennington, Tony was remembered with great fondness by the regulars. The manager, who is also a friend of mine, asked me to make it known that he really respected, loved and missed Tony Lloyd. He will be missed by all in the House. He was probably the nicest Manchester United supporter I have ever come across.
I thank the Leader of the House for announcing the business for next week and the Backbench Business debates for Thursday. There will also be a Select Committee statement from the Procedure Committee on Commons scrutiny of Secretaries of State in the House of Lords. If we are allocated time on Thursday 1 February, we have lined up two debates, one on miners and mining communities, and one on freedom and democracy in Iran.
We are approaching the tabling of supplementary estimates, and the Backbench Business Committee will soon publish information on the application process for a day of debates in the Chamber. The Committee is keen to receive applications for Westminster Hall debates, particularly for Thursdays.
I apologise to the Leader of the House, because last week I raised the subject of the Tyne bridge, which I raised again at Prime Minister’s questions yesterday, but it is a matter of urgency and I will quickly explain why. The Tyne bridge and its surrounding buildings are the furthest inland nesting place for kittiwakes. If we do not get the work started before the kittiwakes return from their wintering, it will become increasingly difficult because it will mean disturbing kittiwake nests. We do not want to do that, so we want to get on with the work. There is urgency from an environmental perspective, but also from a financial perspective. The work really needs to be started as soon as possible. I thank the Leader of the House for writing to the Department for Transport on my behalf last week, but I would like her to understand the urgency of why we need to do that.
I apologise, Mr Speaker, that I miss next week’s business questions, as I will be on Select Committee business.
Penny Mordaunt
I thank the hon. Gentleman for his very helpful advert to all Members for forthcoming debates. I will ensure that the Secretary of State for Environment, Food and Rural Affairs has also heard the hon. Gentleman’s concerns about the bridge and, again, I will ask the Department for Transport to lean in.
Dame Caroline Dinenage (Gosport) (Con)
May I add my tribute to Tony Lloyd? He was a good man, who never underestimated or undervalued the extreme power of kindness.
The Leader of the House will have seen last month’s judgment in the case of the Duke of Sussex v. Mirror Group Newspapers Ltd, which records that witnesses for MGN accepted that, in 2007, the Culture, Media and Sport Committee was misled by the then executives at The Mirror trying to conceal the illegal and unlawful activities that were going on. The individual accused of misleading the Committee died in 2022. Does the Leader of the House agree that any attempts to mislead Committees are unacceptable, but especially those by media organisations, from which the public and Parliament expect honesty and integrity? Will she commit to keep the important issue of Select Committee powers under review, so that Committees such as mine can continue to operate without obstruction?
Penny Mordaunt
I thank my hon. Friend for her question. The powers and privileges of this House are necessary to enable Parliament to function freely and fully, and it is vital that Select Committees are able to obtain full and accurate evidence from witnesses as part of their inquiries. That is critical. The powers available to this House and Select Committees have been under continual review, and they have been investigated numerous times in the past decades. It is, of course, very frustrating when witnesses do not co-operate with Select Committees, and the Government support this House in asserting its powers to ensure that it can scrutinise effectively.
Wera Hobhouse (Bath) (LD)
May I say how sad we on the Liberal Democrat Benches are that Tony Lloyd has passed away? I was a councillor in Rochdale when Tony became the first police and crime commissioner in Greater Manchester. He was such a decent man, and a sincere politician and public servant.
Warm and comfortable homes are crucial to reach net zero and reduce energy bills. People should be encouraged to invest in energy-saving measures, but a complicated certification landscape means that it is difficult to find qualified and reliable installers. A review of this issue has been recommended by the Competition and Markets Authority and supported by Which? Can we please have a debate in Government time on consumer protections in the green heating and insulation sector?
Penny Mordaunt
I thank the hon. Lady for her very important question. The Competition and Markets Authority is doing important work in a number of areas, and that is one of them. We have had announcements on petrol retail, for example, in the last week. I shall certainly make sure that the Secretary of State has heard her concerns about that particular area.
Damien Moore (Southport) (Con)
Southport pier was a significant feature of our town’s life for over 163 years until it was closed by Sefton Council in December 2020. Given the significance of piers to many towns around the country, particularly because of the economic impacts that they can have, will my right hon. Friend agree to have a debate on how can they be restored and maintained for future generations?
Penny Mordaunt
The Government recognise the importance of these often much-loved heritage assets. That is why part of the coastal communities fund was there to renovate heritage buildings, particularly piers and lidos, and we have done that. We have renovated an enormous number of those types of structures across the UK.
Even sadder than the pier closing is the fact that it received £2 million through the coastal communities fund and only a few years ago underwent a £2.7 million enhancement. There are questions about the use of that public money and what my hon. Friend’s local authority is doing.
Alex Cunningham (Stockton North) (Lab)
I want to alert the Leader of the House to action by a private security firm on the Wynyard estate in my constituency to stop legitimate political campaigning. There are thousands of homes on the estate, but Chris McDonald, who I hope will succeed me as the Labour MP for Stockton North, was ordered to leave the area by guards. He was told that they did not allow cold callers, and that was how they categorised Labour activists. The Leader of the House will recognise that as anti-democratic, denying thousands of people the right to hear from those who seek to represent them. I would be obliged if she could use her offices to investigate the silencing of politicians, and make it clear that people of whatever political colour should not be stopped carrying out perfectly legal activities.
Penny Mordaunt
I will certainly ensure that the Cabinet Office has heard about that case. I think there is sometimes a misunderstanding about the function of local councillors and Members of Parliament when they go door to door, trying to identify issues. There are certain areas in local authorities, particularly those with a high volume of quite vulnerable people, where cold calling zones are in place. That is perfectly proper. I will certainly raise the matter with Ministers, but I also encourage Members to address such issues directly and locally. Often these things are misunderstandings. If people say what their business is in a particular area, hopefully such incidents will not arise, but I will ensure that Ministers have heard the hon. Gentleman.
Martin Vickers (Cleethorpes) (Con)
May I add my words of condolence to the family of Tony Lloyd? I served with him on the International Trade Committee. He always made a valuable contribution and will be sadly missed.
The RAC recently published a report calling on the Government to commission an independent inquiry into headlight glare. Members will be aware that headlights on vehicles are now much brighter, with LED lights. In my constituency, the local paper the Grimsby Telegraph has carried a report on the issue, which is clearly of concern to many of my constituents. May we have a statement from a Transport Minister about whether the Government intend to commission such a review?
Penny Mordaunt
I thank my hon. Friend for raising this important matter. I know it is of concern to many people, which is why the RAC has highlighted it. He will know that in the current provisions for vehicle headlamps there is a maximum and minimum light intensity, and specifications for the light pattern and the position of the lights on the vehicle. This is a highly regulated area. My hon. Friend can raise the matter directly with the Secretary of State on 8 February, but I will ensure that he is aware of the survey and what the RAC has said. I thank my hon. Friend for his campaign.
Clive Efford (Eltham) (Lab)
I will be here to pay tribute to my friend Tony Lloyd at the appropriate time.
The Hillsborough inquiry, the Post Office Horizon scandal, Windrush, contaminated blood, and LGBTQ veterans have all been the subject of reports, and they are all examples of how the state treats working-class people when it should be there to support them. Victims of the last three of those scandals—Windrush, contaminated blood and veterans—are still waiting for their compensation to be sorted out and for the outcomes of the reports to be enacted. Can we have some form of cross-party arrangement whereby we can all come to an agreement on how we should respond to the reports and treat those people with the dignity to which they are entitled? The Government are just obfuscating and kicking the can down the road. We know that we are at the fag end of the Government, but these things need dealing with now. Why can we not have some co-operation to bring matters to a conclusion for those people?
Penny Mordaunt
In last week’s session, I spoke about many of the inquiries and issues that the hon. Gentleman raises. I am proud of this Government’s record in bringing forward, for the first time in some instances, inquiries into such matters and in making public apologies on behalf of the state about some of those issues. I will not repeat what I said earlier about the legislation and progress on infected blood, but I will repeat the statement with which I ended my evidence to the infected blood inquiry about why the inquiry is so important, not just to a comparatively small group who have been affected or infected, but to all of us, because it could have been any one of us—anyone in the country could have been affected.
How the state responds to such matters is incredibly important and we all want to see justice done. Last week, I wrote to the Cabinet Office about how we could learn lessons from the series of inquiries we have set up. I know that the Paymaster General is in regular touch with the all-party groups that are primarily concerned with the issues the hon. Gentleman raises, and with the right hon. Member for Kingston upon Hull North (Dame Diana Johnson). In addition, many people in the House and other stakeholders are engaged in consultations and providing their input.
We are determined to get these long-running injustices resolved; that has been our visible track record. When I was Paymaster General, I admitted that there is a moral obligation on infected blood and I set up the compensation study. We will deliver on it with, I hope, the support of Opposition Members.
Dean Russell (Watford) (Con)
I send my condolences to the family and friends of Tony Lloyd. I did not know him well personally, but I knew him well within this place. He was not just well respected but well liked, which is quite hard for a politician of such tenure. He was also known to be very kind, and the immeasurable difference he made to this place will last for generations.
I recently spoke to a constituent who was concerned about fraudsters knocking on doors, dressed as if they worked for a commercial business, with the intention to scam usually vulnerable residents. Will my right hon. Friend advise on how that issue can be addressed to ensure that residents feel safer when opening the door to people who are supposedly selling to them?
Penny Mordaunt
May I start by saying how good it is to see my hon. Friend in his place again, fit and well? Earlier we heard from an Opposition Member about cold-calling zones and measures that are put in place to protect areas with a high volume of vulnerable people, which is one way to address the problem that my hon. Friend raises. That is within the gift of local authorities and may be something his local residents wish to see. I will also ask the relevant Department on his behalf whether there is any good practice that can be passed to my hon. Friend’s office.
Lilian Greenwood (Nottingham South) (Lab)
Time and again, the Government have ignored warnings about the crisis brewing in adult social care, children’s services and homelessness that, combined with rising costs, is pushing local council finances over the brink. The result is that from lunch clubs to libraries, and from art groups to youth centres to supporting bus services, communities are losing the things that bring people together and support their lives. Can we have a debate in Government time on the impact that this loss of social infrastructure is having on communities, and particularly on the old, the young, the sick, the disabled and those who already face extreme poverty?
Penny Mordaunt
The hon. Lady will know how to apply for a debate in the usual way, but I also draw her attention to the local government finance settlement and the offer from the Secretary of State and his Ministers to discuss that with Members. I urge her to take him up on that offer if she so desires. I also point to the work and focus across many Government Departments on the issues that she raises. I am thinking in particular of the Department of Health and Social Care and the work that the Minister for Veterans’ Affairs, my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), has been undertaking with regard to homelessness.
Jo Gideon (Stoke-on-Trent Central) (Con)
Last week, I met my constituent, Kym Ledgar, a former sub-postmistress and former representative of the National Federation of SubPostmasters. I was already appalled but am now incensed by the stories that the victims of the Post Office Horizon scandal have to tell. I welcome the Government’s commitment to complete the process of exonerations and resolve outstanding compensation claims as soon as possible, but those responsible need to be held accountable. Does my right hon. Friend agree that the Government should learn from victims of this appalling miscarriage of justice? Will she find parliamentary time to debate the introduction of a whistleblower Bill to protect brave citizens who speak out against corporate wrongdoing in the future?
Penny Mordaunt
I thank my hon. Friend for her work on that matter. Her question comes in a week when we have also seen reports about previous whistleblowers on other issues, such as Maggie Oliver and her work on grooming gangs, at tremendous personal cost to herself, losing her career and livelihood in the process. We owe those individuals a huge debt of gratitude, and I will certainly make sure that the Cabinet Office has heard what my hon. Friend has said. As I mentioned, I wrote last week to the Cabinet Office asking it to reflect on what it could learn from Horizon and from other inquiries that we have established. My hon. Friend may wish to raise the matter directly at the Business and Trade questions on 25 January.
Jessica Morden (Newport East) (Lab)
There was no transport Bill in the King’s Speech and therefore no opportunity to update legislation relating to e-scooters and e-bikes, and, obviously, we have seen a massive increase in their use. May we have an opportunity, on behalf of constituents who regularly raise with me the antisocial use of e-bikes and e-scooters, to question Ministers on what more they can do to tackle this?
Penny Mordaunt
I thank the hon. Lady for her question; I know this is an issue of concern to many Members across the House. She will know how to apply for a debate, but I will also make sure that the Secretaries of State for Levelling Up, Housing and Communities and for Transport have heard what she said.
Dr Luke Evans (Bosworth) (Con)
The House will know that I have repeatedly raised my concerns about image and performance-enhancing drugs. It is estimated that between half a million and a million people are using these drugs, so may I pay tribute to the sports Minister, who has agreed to join a roundtable discussion with me next week that will bring together academics, clinicians, groups and the police to discuss the matter further? We need more data. One of the biggest problems is that it is a cross-departmental issue, so would the Deputy Speaker mind writing to the Home Office and the Department of Health and Social Care, as well as the Department for Culture, Media and Sport, so that this issue gets the attention that it deserves?
Penny Mordaunt
I am sure that Mr Deputy Speaker would mind writing to those Departments, but I do not at all. I thank my hon. Friend for his really important campaign in this policy area, which did not have a lot of focus prior to his taking it up. I am pleased to hear what the sports Minister is doing and I will certainly make sure that, via him, this will be co-ordinated across Government.
Chris Elmore (Ogmore) (Lab)
On 12 April, Barclays will close its doors in the county town of Bridgend, leaving 145,000 constituents in my constituency and in the constituency of Bridgend with one fewer bank. In my own constituency, there is now one bank left. In Bridgend, older people and charities are finding it increasingly difficult to get access to cash. Will the Leader of the House find time for a debate in which a Minister comes to the House and sets out what the Government will do to stop this desert of banking services, so that we can ensure that people have access to cash and that our hard-pressed charity sector is able to bank and have support from towns right across the United Kingdom?
Penny Mordaunt
I am sorry to hear about the situation in the hon. Gentleman’s constituency. He will know that the Department for Levelling Up, Housing and Communities has a number of programmes to ensure that vital services, such as those he outlined, are co-ordinated locally and can still be accessed. He is right that for the charity sector in particular, but also for businesses and individuals, these are necessary services that people should have access to. He will know that just because bricks and mortar may be going, those services can be continued in other ways, as happens in many other places across the UK. I will ensure that someone from the Department gets in touch with his office, shares the good practice that is going on and gives some advice on how he can ensure that those services are available to his constituents.
Andrew Bridgen (North West Leicestershire) (Ind)
In Tuesday’s 90-minute Westminster Hall debate on trends in excess deaths, Back-Bench contributions were limited to three minutes each. Given the huge and growing public interest in, and concern about, excess deaths, and given the growing awareness across this House, may we now have a debate in Government time on excess deaths? Also, will the Government instruct the Medicines and Healthcare products Regulatory Agency to release anonymised the doses, dates and deaths data that it holds, which it has already disclosed to AstraZeneca, Pfizer and Moderna—public data that the public have no right to, and data that would very quickly verify whether those experimental covid-19 vaccines are, in fact, safe and effective?
Penny Mordaunt
I thank the hon. Gentleman for his question. The fact that he has held a debate in this place and that it was well attended shows that there is great scrutiny of and interest in these matters. He will know that he has other options for applying for a debate. He is sitting next to the Chair of the Backbench Business Committee, the hon. Member for Gateshead (Ian Mearns), and I am sure that some of the things he said in his question would be considered favourably—meaning that his application would be considered favourably. I would encourage him to apply for a debate. He knows that he can secure a debate on that subject, because he has just recently done so.
I will also just emphasise that there is no evidence linking excess deaths to the covid-19 vaccine. Analysis from the Office for National Statistics, published in August last year, shows that people who have had a covid-19 vaccine have a lower mortality rate than those who have not been vaccinated. The issue of excess deaths is important to scrutinise, and clearly the covid inquiry is looking at those issues too, but we need to be careful in our messaging to ensure that—it is individuals’ choice—people have the facts about vaccines of all kinds.
Stephanie Peacock (Barnsley East) (Lab)
Barnsley East has missed out on all levelling-up funding. The local council has put in an excellent bid to support and develop Elsecar Heritage Centre, but in the latest round of announcements we were told that it would be decided separately from the national funding round as a culture and heritage bid, yet DLUHC makes the decision. Will the Leader of the House inform us when the Government will make this announcement?
Penny Mordaunt
I wish the hon. Lady and her colleagues in her constituency good luck with the bid. She will know that if a bid has not been scored to be particularly good in a round of funding, officials from that Department will quite often work with the local authority and other stakeholders to improve the bid and ensure that it is robust—I am not saying that that is the case for the hon. Lady, but it is good that she is still in the process. I will do all I can to assist her in ensuring that the bid is in good shape. I shall ask the Secretary of State for Culture, Media and Sport to give her an update on timing, as the next oral questions for that Department have not yet been given a date.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
As has been amply demonstrated this week, the highlands and islands have the coldest climate in the UK. We have the highest levels of fuel poverty and pay the highest bills, despite generating six times the electricity that we use. Energy policy is entirely reserved to the Westminster Government. May we have a debate in Government time on establishing a highlands energy rebate, along the lines of what the Chancellor has proposed for those in new electricity-generating equipment areas for those living among the existing electricity-generating equipment?
Penny Mordaunt
I thank the hon. Gentleman for his question. I shall certainly ensure that the Secretary of State for Energy Security and Net Zero has heard his suggestion and, given that the next oral questions have not yet been given a date, ask the Department to respond to him.
Ashley Dalton (West Lancashire) (Lab)
Given that there is a debate later today on HS2 compensation, and that Skelmersdale in my constituency has repeatedly been denied any support for a train station—infamously, it still has none—will the Leader of the House share her thoughts on the Department for Transport’s Network North advert that boasted of rerouting £235 million of HS2 funds from the north to fix potholes in London?
Penny Mordaunt
I am not sure I have seen that Government advertisement, so I cannot comment on it. However, if that is a matter of concern to the hon. Lady’s constituents with regard to HS2 compensation, I encourage her to attend the debate this afternoon.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
My constituent is one of six British Sikhs on an “enemies of the state” hit list of 20, broadcast on certain sections of the Indian media. We have seen shocking revelations by the Canadian Prime Minister of the assassination of a Sikh activist and an indictment submitted in a United States court of a foiled alleged plot to assassinate a Sikh activist there, and the family of a Birmingham Sikh activist, who have their own suspicions, are calling for an inquiry into his death. All three were on that hit list. Given that many Sikhs have been handed “threat to life” notices by UK police, does the Leader of the House agree that, whether or not we agree with someone’s views, everyone has the right to freedom of expression in our democracy without the threat of violence? Can she outline what steps the Government are taking to ensure the safety and security of British Sikhs?
Penny Mordaunt
I am sorry to hear about the situation of the hon. Gentleman’s constituent. He will know that the Home Office and the Foreign, Commonwealth and Development Office take those matters very seriously and that, where there are issues with foreign Governments, the Foreign Secretary and his Ministers will raise them directly in bilateral meetings. The Home Office, working often with local authorities, will put in place measures to protect people who have had such threats. We have sadly seen interference in some cases from a number of state actors from China and from Iran in particular, as well as the cases to which he refers.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
May I add my condolences to Tony Lloyd’s family? He was a dear friend and colleague, and he was particularly kind to me when I was first elected in a by-election, 13 years ago.
My constituent’s partner has been awaiting evacuation from Gaza for months now. Her partner has evidence that others in exactly the same circumstances as him are being prioritised over him. Although my office and I have been in almost daily contact with not only the Foreign Office—I thank Lord Ahmad for his support—but the Israeli and Egyptian embassies, I would be grateful if the Leader of the House could liaise with the Foreign Office and identify exactly when my constituent’s partner can be brought home.
Penny Mordaunt
I am sorry to hear about the situation with the hon. Lady’s constituent, and I thank my noble friend Lord Ahmad for the work he is doing. I know he is focused on the protection of British nationals, ensuring that people can be returned to the UK and offering them all assistance. I will certainly ensure that Ministers hear what the hon. Lady has said today. As with cases regarding hostages, I have helped facilitate some services being stepped up for Members of Parliament. I think I am perhaps not able to assist her in quite the way she wishes me to, but I will ensure that the Foreign Office has heard what she has said and, although I know that she is in contact with them already, I will raise her concerns with FCDO officials to see whether anything further can be done. I know she appreciates that these are very difficult circumstances.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The House will recall that on 2 January the Prime Minister posted on X:
“I said that this government would clear the backlog of asylum decisions by the end of 2023. That’s exactly what we’ve done.”
In fact, it was pretty soon apparent that they had done nothing of the sort, with more than 4,500 legacy applications still awaiting a decision. Accordingly, I took the matter to the UK Statistics Authority to seek its guidance, and this morning I received this reply from its chair, Sir Robert Chote:
“The average member of the public is likely to interpret a claim to have ‘cleared a backlog’—especially when presented without context on social media—as meaning that it has been eliminated entirely”.
He goes on:
“This episode may affect public trust when the Government sets targets and announced whether they have been met in the other policy domains.”
Will the Leader of the House make time for the Prime Minister or the Home Secretary to come to the House and explain why, yet again, they have had their knuckles rapped for their use of statistics?
Penny Mordaunt
It is a good thing in our democracy that we do not mark our own homework. We have independent bodies that review statistics. We also have bodies that look at how statistics are presented, so that they are presented in the clearest possible way to members of the public. The right hon. Gentleman will know that massive progress has been made in that area. Off the top of my head—he will forgive me—the processing of applications in the Home Office has increased by 250%. It is now working through those applications at pace. However, I will certainly ensure that the Home Office hears what he has said, as its question time has not yet been tabled.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I raised this issue last week. The Leader of the House may be aware of the open letter signed by actors, musicians and campaigners, including Adrian Lester, Annie Lennox, Martin Forde KC and Baroness Doreen Lawrence, urging the Government to go faster on the Windrush compensation scheme. More than 40 people have died while awaiting compensation. May we have a debate in Government time to consider taking Windrush compensation out of the Home Office and into an independent body, so that we get a speedy resolution for the many people still waiting?
Penny Mordaunt
I thank the hon. Lady for her diligence in raising this issue again. She will know that last week I wrote on her behalf to the Department, as well as to the Cabinet Office, to see what more they could do to learn from this and other matters. I will do so again.
Kevin Brennan (Cardiff West) (Lab)
Will the Leader of the House have another go at improving written ministerial answers? I recently asked the Department for Levelling Up, Housing and Communities a very simple question about what meetings Ministers had had with Welsh and Scottish counterparts on the implementation of the new ombudsman scheme. The answer from the Minister for Housing, Planning and Building Safety was:
“Ministers and officials have regular engagement with the devolved administrations on a range of issues.”
That passes the Lloyd George test: it was short, accurate and told me absolutely nothing I did not know already. In this day and age, can we not at least have a culture among Ministers of answering perfectly straightforward and factual questions in a perfectly straightforward and factual way, and will she help to facilitate that, please?
Penny Mordaunt
The hon. Gentleman will know that a great deal of time and effort is taken in the drafting departments in Government Departments. My noble Friend Lord True and I run regular training sessions, as do the officials in my office. We are always on the lookout for good and bad practice so that we can ensure that people know what Members of Parliament need, and we inform those individuals of what is helpful to us in dealing with casework and in which format we might need information. I am always open to example of good and bad practice being passed to my office, and I will certainly raise it with the relevant Department.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Twice in questions today, compensation schemes have been raised, and I am heartened that the Leader of the House herself championed this issue as Paymaster General and has been in contact with the Cabinet Office. However, could she help me and my constituent who was in the secret services? He was dismissed because of his sexuality alone, and is one of a group of people who cannot talk about the matter publicly. Despite my hammering on doors in Whitehall, we are making very little progress. As well as the gay veterans’ scheme and other compensation schemes, would the Leader of the House take up this issue for people who served their country well and were dismissed simply because they were gay or lesbian? It is not fair, it was not right, and it needs redress.
Penny Mordaunt
The hon. Lady raises a very important point. Quite often, because of the nature of someone’s service, they are not able to participate in particular inquiries or reports that are produced on historic wrong- doing and miscarriages of justice. Clearly, the agencies have evolved over the years, and the heads of those agencies are now public figures, so I will certainly write to the Cabinet Office and ask it to consider this matter, copying in both the Home Office and the Foreign, Commonwealth and Development Office, which are primarily the sponsoring Departments for those agencies.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Tony Lloyd was shadow Secretary of State for Northern Ireland when I had my first Front-Bench role as SNP spokesperson for Northern Ireland. He was extremely welcoming, collegiate and helpful, for which I will be forever grateful. I offer my sincere condolences to his friends and family.
I received a letter on Monday from the Minister for Legal Migration stating that the Home Office’s use of the Muthu Erskine Bridge hotel, which is currently home to 114 asylum seekers, would cease by the end of April. The problem is, that was nearly a week after the news had become public, and after I had already had a meeting with Mears to discuss winding-down arrangements —all this after no real engagement, consultation or even basic communication with the local community at the outset, leaving it to local representatives like me to try to answer questions I had no answers to, with the abuse and threats to me and my staff that went along with it. Can we have a debate on Home Office communication with Members of this place and, when necessary, directly with members of the public?
Penny Mordaunt
I am sorry to hear about that situation, and I will raise it with the Home Office. From my own experience, the Home Secretary’s Parliamentary Private Secretary has been very diligent in making sure that Members on all sides of this House are kept informed about things that are going on in their constituencies, so I am sure that if there has been a delay in sending a letter to the hon. Gentleman, it will have been an error. However, I will make sure the Minister and the Department have heard his point.
Andrew Western (Stretford and Urmston) (Lab)
I associate myself with the comments that have been made about my friend and predecessor as Member for Stretford, Sir Tony Lloyd. I will reserve my comments for the appropriate time in the forthcoming weeks, but in light of the comments made by the shadow Leader of the House, I wanted to express my solidarity with her in having experienced unfavourable comparisons with Tony. She is more fortunate than I am; she had those comparisons for only the first couple of years, but I continue to experience them some 27 years after he ceased to represent Stretford.
My constituent Colin is a retired senior police officer awaiting pension adjustment under the McCloud remedy. He and many others have made important life decisions on the basis of a promise made by XPS, the Government’s pension administrators for the scheme, to remediate all retirees by July this year. Without notification—with a website update alone—XPS has now pushed that date back to November this year. Colin and thousands of others have made life-changing decisions on the back of information previously provided, and years’ worth of hard-earned pension are still outstanding, yet I understand that, to date, not a single retiree has been remediated, or one letter been sent to any recipient. Could we have a statement from the Policing Minister on the progress that XPS is making on the remediation of affected police pensions, and the steps the Government are taking to assure themselves that the legal deadline for adjusting those pensions will be met?
Penny Mordaunt
I thank the hon. Gentleman for his question. As the date of the next Home Office questions has not been tabled, I will write to and make sure the relevant Minister has heard the hon. Gentleman’s request.
Christian Wakeford (Bury South) (Lab)
I would also like to put on record my sadness at the loss of our dear friend and colleague Sir Tony Lloyd. As the shadow Leader of the House said, he was a thoroughly decent bloke. He was kind and a great conversationalist over a pint, especially when we were talking about the losses of Manchester United these days, about which we shared our depression. More importantly, this place and politics are much poorer without him.
This week, I met the Environment Agency on behalf of concerned residents regarding the odour coming from the Pilsworth South landfill site in my constituency. The Environment Agency serves an important function for all our constituencies, particularly on issues such as flooding, balancing the needs of people and the environment. Could we have a debate in Government time on the appropriate level of funding for the Environment Agency to ensure that it has enough teeth to monitor and potentially punish operators that breach licences?
Penny Mordaunt
I am sorry to hear about that ongoing issue in the hon. Gentleman’s constituency. He will know that that is the purpose of the Environment Agency. It has quite considerable investigatory powers and, with other bodies, the ability to sanction particular people. The next questions to the relevant Department are on 1 February, and the hon. Gentleman may wish to raise that issue then.
Mary Glindon (North Tyneside) (Lab)
Hon. Members who visited Iraqi Kurdistan with the all-party parliamentary group on the Kurdistan region in Iraq know that it is a firm ally against extremism, and they will be disgusted that the Iranian regime has targeted the capital, Irbil, with missiles, killing a prominent businessman, his baby daughter and others in a vile and illegal act. May we have a debate in Government time on how the Government can best assist our allies and support Iraq’s complaint at the United Nations about Iranian aggression? Could the Leader of the House prompt the Foreign Secretary to discuss the issue with the Kurdish Prime Minister in Davos?
Penny Mordaunt
I will certainly make sure that the Foreign Secretary has heard what the hon. Lady has said. She will know that the next Foreign Office questions are on 30 January, and she may also wish to raise it then. I thank her for shining a spotlight on that particularly brutal attack. Again, it is highly consistent with the Iranian regime’s standard operating procedure in many places around the world.
Richard Foord (Tiverton and Honiton) (LD)
The former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss) has recently been trying to sell de-mining equipment to the People’s Republic of China, including ground-penetrating radar capability. The sale was blocked by the Government, but it brings into view a proposal made this time last year by the four Committees that make up the Committees on Arms Export Controls to make it a dedicated Select Committee of the House. This proposal was supported by the Chairs of the Defence Committee and the Foreign Affairs Committee, both Conservative MPs. If they support making the Committee a dedicated Select Committee of this House, why does the Leader of the House not do so?
Penny Mordaunt
I thank the hon. Gentleman for his question, and for advertising that the systems the Government have put in place to ensure that sales that should not be taking place are blocked is alive and well and working. Sitting next to me on the Front Bench is the Security Minister, who has stood up new infrastructure in Whitehall to ensure that we have full situational awareness of particular sales or takeovers that might be against the public interest. That has come on leaps and bounds in recent years, and I thank the hon. Gentleman for the endorsement and advert for that.
There are many issues to be considered when new Select Committees are stood up. They are ultimately a matter for the House, but I can tell the hon. Gentleman from my experience of serving on the Committees on Arms Export Controls—for those who do not know, it does not decide on arms exports; it scrutinises the decisions taken—that the input and expertise from the four Select Committees of this House on live issues and the geopolitical situation that needs to be considered when scrutinising such decisions are incredibly valuable. Ultimately, however, these things are a matter for the House.
Jeff Smith (Manchester, Withington) (Lab)
It is now over two years since the hon. Member for Chatham and Aylesford (Tracey Crouch) produced her fan-led review of football, and the Government have accepted most of the recommendations. In that time, several communities have faced losing their local club, and the longer we wait, the more that will happen. When will we finally see the football governance Bill, or are we going to have to wait for a Labour Government to take action on this issue?
Penny Mordaunt
Given that the Labour Government did not take action on this issue, the hon. Gentleman should not hold out for that prospect. We have taken the decision to focus on this matter. We set up the football governance review, which the former Sports Minister my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) took forward, and we are bringing forward legislation. I am expecting that legislation to come to the House very soon and I thank Members from all sides of the House and supporters of all clubs for all their input into the review and the legislation that has come from it.
Richard Burgon (Leeds East) (Lab)
I want to put on record that, like others, I miss our friend and colleague Tony Lloyd so much. He was a public servant of the highest order and a socialist of wit, wisdom, integrity and public service, and we will miss him.
People out there in Leeds and across the country are really struggling, through no fault of their own, to get by. This Government say they are proud of their record on living standards despite the reality out there being very different. If the Government are so confident, will the Leader of the House arrange for a debate in Government time on living standards after 14 years of Conservative Government? Can we have it as soon as possible, before the general election that we need very quickly so that people out there can give their verdict?
Penny Mordaunt
The hon. Gentleman will know how to apply for a debate, and if he did so I am sure it would be very well attended, certainly by Members on the Government Benches. He will know that the cost of living package we put in place recently, because of what we have gone through with the pandemic and the shocks to fuel prices particularly, in part because of the war in Ukraine, is now worth over £104 billion.
I am very proud of our record and not just because of the support that we have given directly; I draw the hon. Gentleman’s attention to the uplift in housing allowance, other benefits, and the triple lock for pensions that were announced in the autumn statement, and also to what we have done to double people’s personal tax allowance. We believe that the best way we can support people, as well as providing a strong welfare system and that targeted support, is by ensuring that more people get into work and are able to have more high-value jobs. That is sitting behind our trade deals; the comprehensive and progressive agreement for trans-Pacific partnership in particular will increase wages in this country in particular sectors. It is also fundamental that we get people into work. We have managed to get an additional 4 million people into work; 2 million are women and 1 million are disabled people who would not have had the dignity of a pay packet had we not brought through welfare reforms. We have lifted many people out of poverty, including 500,000 children.
Hywel Williams (Arfon) (PC)
I join in the early tributes to Tony Lloyd, who was a sincere, decent and kind man, and a model to us all in these hardened times.
Independence is a viable option for Wales’s future and the status quo is not. Those are two of the most striking conclusions of the independent commission on the constitutional future of Wales led by former Archbishop Rowan Williams and Professor Laura McAllister whose report is published today. Whatever the views across the House and of the Leader of the House, any sensible UK Government with sincere concern for the governance of my country would engage with the change that is already afoot. Will the Leader of the House demonstrate that sincere concern by arranging a full-scale debate on the commission’s report, perhaps around the time of St David’s day on 1 March?
Penny Mordaunt
I fully understand the hon. Gentleman’s interest in this matter. We on the Conservative Benches will always defend the Union of the United Kingdom. Many services are devolved, and it pains me to see many services run very badly by the Welsh Government, to the detriment of Welsh citizens, as I know he will appreciate. Waiting lists are four times what they are in England, to give just one example. We will always defend the Union, and if the hon. Gentleman applies for a debate, I am sure many on my side will turn up and do precisely that. It is a sad and sorry state that the most vibrant separatist party in the UK now is not the Scottish National party, but the Labour party.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Last week, in response to my comments, the Leader of the House said that people in England pay lower tax than people in Scotland, even though 55% of people in Scotland pay less tax than people in England, including council tax. She added that her Government delivered a balanced budget, even though they have never done so since they came to power. The Scottish Government must, by law, deliver a balanced budget every year. Those are matters not of opinion but of fact, and I am sure she had no intention of misleading the House. Will she make a statement to correct the record?
Penny Mordaunt
I would be happy to correct the record now. A nurse earning £34,000 would pay £4,348 in Scotland, compared with £4,286 in England. A doctor earning £50,000 would pay £9,038 in Scotland, compared with £7,486 in England. A headteacher would pay £17,436 in Scotland, compared with £15,430 in England. The hon. Lady needs to go and check the facts before she comes back next week. That is before I even start talking about the money that the UK Government have given the Scottish Government for businesses in Scotland, which the SNP is hanging on to instead.
Jim Shannon (Strangford) (DUP)
I thank the Leader of the House for this opportunity to ask some questions on freedom of religion and belief and about persecution across the world. One example just in the past week is the Baha’i farmers who have suffered land seizure by the Iranian Government. That is another indication of the Iranian Government intensifying religious persecution against the Baha’i. Secondly, there have been recent actions against Christians in Sudan. On 12 January, the evangelical Presbyterian church in Wad Madani, Al Jazirah state was burned down. The Sudanese army has been accusing civilians of spying for the Rapid Support Forces paramilitary group based on ethnic grounds, leading to arrests, torture and killing. Will the Leader of the House join me and others in denouncing these arbitrary actions against Christians in Sudan and against the Baha’i in Iran?
Penny Mordaunt
I thank the hon. Gentleman for what he does every week to draw a spotlight on some appalling situations that do not necessarily get a lot of media attention. These have been themes this week. Many Members have spoken in these business questions, but also throughout the week, about the conduct of the Iranian regime. I thank him again for shining a spotlight on the ongoing situation in Sudan. As he knows I always do, I will make sure that the Foreign, Commonwealth and Development Office has heard his concerns.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Leader of the House for responding to questions for more than an hour.
May I say that Sir Tony Lloyd, a north-west MP— I called him Mr North-West—was caring, honest, decent and a gentleman? Everybody got on with him. He worked with everybody. He was a fantastic man. I was on the Council of Europe with him. He was a true internationalist. We worked hard together. We had the odd pint together in Strasbourg. Politics and Parliament are the poorer for his passing.
Prevention and Suppression of Terrorism
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Security (Tom Tugendhat)
I beg to move,
That the draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2024, which was laid before this House on 15 January, be approved.
I am grateful to the House for considering this draft order, which will finally see Hizb ut-Tahrir proscribed. The events of 7 October will be permanently ingrained on our minds. What Hamas did that day was barbaric. It was evil. Who can erase the images that we saw of mothers crying over their blood-soaked beds with their children missing, of teenagers gunned down at a festival of peace, or of women abducted, raped and slaughtered? Who among us could fail to be appalled by such depravity or to still feel the pain of those whose loved ones are hostages? Who could stay silent in the face of the worst pogrom against Jews on any day since the holocaust?
In the aftermath of 7 October, communities across the United Kingdom came together to condemn these vile acts and to stand with British Jews in their hour of grief. Not everyone, however, reacted with sorrow. Instead of horror, Hizb ut-Tahrir responded to the murder of civilians with elation. Instead of condemnation, it lavished Hamas with praise.
I want to make something very clear: I am a champion of freedom of speech, and I have no issue with people saying things that I regard as insensitive, uninformed or wrong, but this is different. Free speech includes neither the promotion of terrorism nor the celebration of terrorist acts. It is not acceptable to describe Hamas as the “heroes” of Palestine or the events of 7 October as a “long-awaited victory”. It is not acceptable to refer to the killing of Jewish tourists by an Egyptian police officer as
“a simple example of what should be done towards the Jews”.
It is not acceptable to call for so-called Muslim armies to rise up and carry out similar acts.
Hizb ut-Tahrir has antisemitism at its very core. It rejects democracy and engages in vile homophobia. As an organisation, it does not just reject British values; it seeks to undermine them. We will not let groups such as Hizb ut-Tahrir abuse our freedoms. We will never tolerate the promotion or encouragement of terrorism. We have zero tolerance for antisemitism. Hizb ut-Tahrir must be proscribed.
Before I come to discuss the specifics of the order, I will set out some background on the proscription power. Currently, 79 terrorist organisations are proscribed under the Terrorism Act 2000. For an organisation to be proscribed, the Government must believe that it is concerned in terrorism as set out in section 3 of the Act. If the statutory test is met, the Home Secretary must consider the proportionality of proscription and decide whether to exercise their discretion.
Proscription is a powerful tool with severe penalties, criminalising membership and invitations of support for organisations. It also supports other disruptive activity including immigration disruptions and terrorist financing orders. In short, the resources of a proscribed organisation are terrorist property and therefore liable to be seized.
A decision to proscribe is taken only after great care and consideration, given its wide-ranging impact. It must be approved by both Houses. Part 2 of the 2000 Act contains the proscription offences in sections 11 to 13. An organisation is proscribed if it is listed in schedule 2 to the Act. Article 2 of the order will add Hizb ut-Tahrir to the list in schedule 2 as a new entry.
We have carefully considered all the evidence. Hizb ut-Tahrir is concerned in terrorism. With the House’s consent, it will be proscribed, including all regional branches such as Hizb ut-Tahrir Britain.
Although I am unable to comment on specific intelligence, I can provide the House with a summary of the group’s activities. Hizb ut-Tahrir is an international political organisation with a footprint in at least 32 countries, including the United Kingdom, the United States, Canada and Australia. Its long-term goal is to establish an expansionist caliphate ruled under Islamic law, with no fixed borders, seeking new territories to occupy in the name of jihad. That is its stated aim. Hizb ut-Tahrir’s headquarters and central media office are in Beirut, and its ideology and strategy are co-ordinated centrally.
The British branch, Hizb ut-Tahrir Britain, was established in 1986. It is afforded autonomy to operate in its local environment, but it is important to emphasise that it is part of a coherent international movement, and recognises the leadership of Hizb ut-Tahrir. The decision to proscribe therefore relates to Hizb ut-Tahrir, including all its regional branches. Any distinction between them is artificial.
There is evidence that Hizb ut-Tahrir is concerned in terrorism. Its central media office and several of its middle eastern branches have celebrated and praised the barbaric terrorist attacks on Israel and other nations’ citizens carried out by Hamas, which, as Members will be aware, are already a proscribed organisation.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Is the Minister aware that Zeyno Baran of the Hudson Institute has observed that the British chapter of Hizb ut-Tahrir is the “nerve centre” of the international movement? As is so often the case when dealing with terror organisations, the responsibility to protect our own citizens extends to citizens in other countries as well.
Tom Tugendhat
The right hon. Member is absolutely right that the unity of this organisation means that one branch cannot be separated from another. The UK branch is important when taking down the network around the world. That is why, as I will come to, this action is supported not just here but around the world.
As I mentioned earlier, recent activity includes an article attributed to Hizb ut-Tahrir’s Egyptian branch, which referred to the killing of Jewish tourists by an Egyptian police officer as
“a simple example of what should be done towards the Jews”.
The British branch is supportive of—and indeed, subservient to—its global leadership and policy positions. It demonstrates a hatred not just of Israel but of all Jews. Its promotion and encouragement of terrorism is inspired by an abhorrent antisemitic ideology.
Hizb ut-Tahrir has frequently referred to Hamas as the heroes of Palestine. Hamas are not heroes. Those who perpetrated the attacks on 7 October are monsters. Hizb ut-Tahrir Britain published an article on its website that described the 7 October attacks as a long-awaited victory that
“ignited a wave of joy and elation amongst Muslims globally”.
It is the Government’s view that the content included in that article and others like it betrays Hizb ut-Tahrir and Hizb ut-Tahrir Britain’s true ideology and beliefs. Hizb ut-Tahrir has regularly engaged in homophobic and antisemitic discourse. It rejects democracy, and its aims bear similarities to those of terrorist groups, including Daesh, which is already proscribed. Internationally, Hizb ut-Tahrir plays the mood music to which other terrorists dance.
This proscription will serve as a reminder that the United Kingdom does not and will never tolerate the promotion or encouragement of terrorism. It will send the message that promoting or encouraging Hamas’s sickening attack on 7 October is utterly unacceptable and at odds with the values of this country. By proscribing, we will reassert our unwavering commitment to fighting antisemitism, which has increased unacceptably in the United Kingdom and globally in recent months.
To the Jewish community in the United Kingdom, I say this: “We will always protect British citizens. We will do whatever it takes to protect you.” To British Muslim parents and to many mosques across the country, I say this: “We will remove this menace that claims to act in your name. Hizb ut-Tahrir does not represent Islam or Muslims. You are a crucial part of our nation and your Government is on your side.”
Before I conclude, I will make a couple of further points. First, the decision to proscribe is supported by our international partners. Hizb ut-Tahrir is banned in many countries around the world, including in Germany, and restrictions are placed on its activities in Austria. This is an organisation that does not believe in borders or the nation state, and that calls for the overthrow of every Government in the Islamic world. It has declared the custodian of the two holy places in Saudi Arabia, the Khadim al-Haramayn, an apostate, and has been banned in Turkey, Saudi Arabia and the United Arab Emirates. Following coup attempts in Jordan and Egypt, it has been banned in those countries as well. Its call for the caliphate is a colonial imperialist ambition from another age and gives legitimacy to others, including ISIS and al-Qaeda. When al-Nabhani split from the Muslim Brotherhood to found this organisation in 1953, it was to a great extent because he did not believe in its incrementalist policy of using democracy, but instead turned to violence and radicalising Muslim militaries to establish a single expansionist Islamist empire. This is an organisation calling for the conquest of India, Greece, Spain and France—anywhere, in fact, where Muslim armies once trod, even if that was over 1,000 years ago.
Let us not forget the impact of Hizb ut-Tahrir in the United Kingdom. One of its original leaders subsequently went on to set up al-Muhajiroun, a pernicious organisation, now also proscribed, with links to many of the perpetrators of Islamist-inspired attacks in recent years. We are taking this action to stop the pain and loss caused to countless families across our country who have lost loved ones to this cult. This proscription is important to protecting all communities across our country, and to standing with our allies and partners in nations from Indonesia to Morocco.
Proscription is a powerful tool. It will significantly hamper Hizb ut-Tahrir’s operations in the United Kingdom, and damage its activities and support for branches in other parts of the world. The United Kingdom must not be a hub for global terrorism: not today, not tomorrow, not ever. It will now be a criminal offence for a person to: belong to Hizb ut-Tahrir; invite or express support for Hizb ut-Tahrir; arrange a meeting in support of Hizb ut-Tahrir; and wear clothing, carry or display articles in public in such a way as to arouse reasonable suspicion that the individual is a member of, or a supporter of, Hizb ut-Tahrir. The penalties for conviction of proscription offences can be a maximum of 14 years in prison and/or an unlimited fine.
The first duty of Government is to keep our people safe, to guard the homes of our friends and fellow citizens, and to discourage any from going down the path of radicalisation that destroys lives. Nothing matters more. It is a tremendous responsibility and one that we approach with the utmost seriousness. The fight against terrorism demands constant vigilance. When there is a clear need for action to support that vital mission, we will not hesitate. I therefore urge the House to support this proscription order. It is a proportionate response to the promotion and encouragement of terrorism. It is a justified response to calls for violence and disorder, and it is necessary to defend our values and to protect all the communities of our great country.
Dan Jarvis (Barnsley Central) (Lab)
I thank the Security Minister for what he has said, and his colleagues at the Home Office for briefing the shadow Home Secretary and me ahead of this debate. Today’s proscription order is underpinned by the exceptional men and women who serve in our intelligence and security services in Government and in our police. They work tirelessly to keep our country safe. We are extremely fortunate to have them.
Keeping our country safe is the first duty of Government and a common cause that we share and treat with the utmost seriousness. On that basis, it is vital that the Government and the Opposition work together in the national interest on these crucial issues. As the Minister laid out, the order will amend schedule 2 of the Terrorism Act 2000 to add Hizb ut-Tahrir to the list of proscribed organisations. Doing so will make it a criminal offence to belong to Hizb ut-Tahrir, to engage in activities such as attending meetings, to promote support for the group, or to display its logo. After years of serious and increasing concerns about Hizb ut-Tahrir’s activity both internationally and in the UK, the Opposition strongly support its proscription. It is a necessary and proportionate step to effectively counter its hateful extremism and divisive rhetoric which threatens the safety and security of our country.
Proscription of this international terrorist organisation comes after other countries, including Germany, had already banned it. Hizb ut-Tahrir is being proscribed now because of escalating activity in the aftermath of Hamas’s barbaric terrorist attack on Israel. Unlike other Muslim groups in the UK who condemned these attacks, Hizb ut-Tahrir Britain glorified as “heroes” the Hamas terrorists who revelled in acts of indiscriminate violence against civilians. In the aftermath of 7 October there was deep sorrow and outrage among the British people, shared with the Israeli people; but Hizb ut-Tahrir boasted of its “euphoria” on the news of that appalling and tragic loss of life. There is no place on Britain’s streets for vile antisemitism. There is no place on Britain’s streets for those who incite violence and glorify terrorism. There is no place on Britain’s streets for Hizb ut-Tahrir. This terrorist group peddles hate, glorifies violence, and is not only hostile to our values but hostile to the common tenets of humanity.
There is nothing new about the divisive and poisonous rhetoric of Hizb ut-Tahrir, which has been widely recorded for over two decades in the UK, long before the attacks of 7 October. Organisations such as the Community Security trust, the Antisemitism Policy Trust and the Union of Jewish Students have long raised serious concerns about Hizb ut-Tahrir’s antisemitism, alongside its misogynistic and homophobic hate speech, which provide a channel for extremism. That is why previous Prime Ministers, Home Secretaries and Security Ministers have considered proscribing Hizb ut-Tahrir, but its activities were not recognised as sufficient under the definition of terrorism in section 3 of the Terrorism Act 2000 until now.
Given the amount of time for which these matters have been debated and considered, I should be grateful if the Minister, when he responds, said whether he thinks there are lessons to be learned about the length of time that it has taken to proscribe Hizb ut-Tahrir. Will he also say whether he believes that the current proscription process is agile enough to counter threats to our national security robustly, and whether he agrees that a bespoke proscription mechanism for state-sponsored organisations—which Labour has already called for—is now required? Countering threats to our national security requires joined-up, cross-Government working, but the counter-extremism strategy has not been updated since 2015, with important elements of policy involving community cohesion now the responsibility of the Secretary of State for Levelling Up, Housing and Communities. Given the significance of these matters, I should be grateful if the Minister told the House when the Government will provide a new definition of hateful extremism. Can he also tell us when his Department will update the counter- extremism strategy, an update that has been called for by the shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper)?
Proscribing Hizb ut-Tahrir is the right thing to do for our national security. For too long the public have been exposed to its extremist ideology, its glorification of terrorist activity, and its core aim of overthrowing our democratic system of government to replace it with an Islamist theocracy. If left alone, extremism can and will spread insidiously and seep deeply into our national conversation. No Government must ever relent in their determination to ensure that we are always one step ahead of those who seek to harm us or to undermine our way of life. This House must always be on the side of the public whom we strive to serve and protect, and that is why we strongly support this proscription order.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I note that there is some interest in this debate. It must end by 1.18 pm, so I ask Members to be mindful of the contributions that they make.
Andrew Percy (Brigg and Goole) (Con)
As I speak in this debate, I will have in mind the 136 hostages who are still held by Hamas, including Eli Sharabi. Several colleagues and I met his brother-in-law, Steve, in the House yesterday.
I welcome what both the Minister and the shadow Minister said on this subject, and I disagreed with nothing. I thank the organisations that have campaigned on this issue over the years, including the UJS and the Antisemitism Policy Trust, which is ably led by Danny Stone—he has long campaigned on this and I congratulate them all on their efforts, which have now paid off.
My only slight point of disagreement with what has been said is that, once again, I voice my support for the proscription of the Islamic Revolutionary Guard Corps, which is behind Hezbollah, Hamas and, of course, the Houthis. This is a debate of consensus, so I will leave that for another day.
As the Minister said, Hizb ut-Tahrir is an antisemitic, racist organisation that promotes and encourages terrorism. As both Front Benchers said, it openly celebrated the appalling pogroms of 7 October and has described Hamas as “heroes.” They are not heroes; they are murderers and rapists, for which they should be called out by everyone. Hizb ut-Tahrir is an explicitly antisemitic group and has targeted gay people, women and Muslims who do not share its perverse interpretation of Islam. It is right to ban this group, but will that ban include its pernicious online activities?
I will now look at some of the individuals involved with Hizb ut-Tahrir. Omar Khan Sharif, one of the British bombers of Mike’s Place in Tel Aviv, was found with Hizb ut-Tahrir literature. The bombing took place in the second intifada, so let us remember what an intifada is, for those who have been marching in the streets with signs calling for an intifada. At the weekend, people held signs calling for a “socialist intifada.” I am not sure what a socialist intifada is—perhaps it means murdering people more fairly—but that is what people have been calling for.
The second intifada involved the bombing of pubs and civilian buses, and it involved the murder of countless innocent civilians. That is what people have been calling for on our streets, and they have been allowed to continue calling for it without any police action.
Christian Wakeford (Bury South) (Lab)
It gets even worse, because this weekend we heard people not only on the march but on the stage saying that massacres should now become the norm. There is no place for that in society, which is why such motions should be welcomed not only by every Member but by everyone in this country.
Andrew Percy
I could not agree more. Doubtless the majority of people who attend protests are peaceful, but that behaviour is making Jewish people in this country frightened of wherever the protests take place. The Jewish community in my region has expressed to me its concerns about the small marches we have had in my area, and of course Jews in London are afraid to come into central London when the marches are taking place, precisely because of that behaviour, which I believe is by a minority.
The leader of Hizb ut-Tahrir in Denmark was convicted of racial hatred for distributing a leaflet that said:
“Kill them, kill the Jews wherever you find them.”
The organisation tells its followers that they should not be close friends with non-Muslims. In fact, one of its leaflets says:
“We maintain that the clash of civilisations is not only inevitable but imperative.”
Of course, it shares that view with neo-Nazis. It is absolutely right to ban this organisation, and I agree with everything that the Minister and the shadow Minister said. Welcome though it is, however, the ban will not end the continued targeting of the Jewish community and Jewish people in this country, which has led to a 1,000%-plus increase in antisemitism.
This week I was informed by the police force in my area that pro-Palestinian activists might come to protest one of our Holocaust Memorial Day events. I am sure they will protest peacefully, but that event is being targeted for no other reason than Jews will be present. That is absolutely appalling and disgraceful behaviour, just as it would be for a person to protest Hamas or Hizb ut-Tahrir at a Muslim community event. It is completely unacceptable. In fact, it is perverted.
A Jewish charity that supports disaffected young men and young boys in the north of London was targeted this week by activists, who screamed and shouted abuse outside. What does a Jewish charity working with disaffected youth have to do with this conflict? It was targeted for no other reason than it involves Jews.
We have seen continued denial of the events of 7 October in online spaces and on the streets of this country. Although this proscription will do a great deal, it will not prevent the continued targeting of Jews. Indeed, in just the last few days, because of a smear someone posted online after I dared to say in this place that people who do not contextualise the Israeli response to 7 October with the events of 7 October are giving the terrorists a “free pass”, I have received the most appalling antisemitic communications, including describing the hostages as, “Them Zionist rat hostages.” Someone messaged me to say, “Nobody cares about the Jews.” Another messaged me to tell me that I should be flogged because of my beliefs. I have been targeted with emails directly quoting the comments made about me on social media and telling me that they were false-flag operations, that the hostages do not exist and that it was the Israelis who killed people on 7 October—all the various conspiracy theories. The comments on social media have enabled antisemitism of the most awful kind, and I am afraid it will continue, which is why we have to do so much more.
I know that both the Government and the Opposition have done incredible things in calling all of this out and putting extra money into the CST, but the continued targeting of Jews in this country is deeply disturbing. Although this motion is welcome, it will not prevent that from continuing. We need tougher action.
As I said in a Westminster Hall debate, it has seemed on occasion as if the Metropolitan police force is acting as the public relations arm of some of the protests, instead of doing what it should be doing and protecting British Jews from such hate speech. We are such a small community, just 0.5% of the population.
I thank the Minister and the shadow Minister for what they have said, and I welcome this move. I hope the Minister will answer my question on whether the order will apply to Hizb ut-Tahrir’s online activities.
Kirsty Blackman (Aberdeen North) (SNP)
The SNP absolutely supports the proscription of Hizb ut-Tahrir. We stand with Jews and Jewish communities against antisemitism.
I particularly thank the Union of Jewish Students for its work in Aberdeen, and I am grateful for the comments it has brought to me about its experiences in the wake of 7 October. The hon. Member for Brigg and Goole (Andrew Percy) told us about some of the incredibly explicit and horrific comments he has received, and I feel for all those who receive such comments, whether or not they are in the public light. Receiving such comments is awful, and we are happy to commit to working with everyone in the House to do everything we can to oppose antisemitism, wherever it occurs in our communities. We must stamp out antisemitism wherever we can.
We recognise the horrifying, dangerous comments and attitudes of Hizb ut-Tahrir, and agree with the reasons the Minister set out for its proscription. At a time of unprecedented violence on so many fronts, we call for, and we support those who call for, unity in the face of the forces of hatred that try to divide us.
Can the Minister assure us that, after proscription, he and the Government will take further action to remove Hizb ut-Tahrir’s ability to operate in the UK and, together with international partners, its ability to operate around the world, where we can do so? Will he update the House on the Government’s action and its impact, afterwards if necessary? I understand the need for some of that action to be taken without giving a heads up, but we would like to see the outcome and whether it has had an effect, so that we can support future action and be clear that it will achieve what the Government intend.
I wholeheartedly agree with the comments made by the hon. Member for Brigg and Goole about the Antisemitism Policy Trust and Danny Stone. Danny is an absolutely dedicated public servant who does a huge amount of good in supporting his community and bringing advice and information to parliamentarians, ensuring that we are all far more knowledgeable as a result.
Will the Minister update the House on whether the Government have made a further assessment of whether to proscribe the Islamic Revolutionary Guard Corps? It continues to be the SNP’s position that sanctions are not enough and that proscription of this organisation is required. If he can assure us that this is being kept under a watching brief, that would give us at least some reassurance that the Government have not entirely ruled it out and that it could be considered in the future. We ask that that organisation be proscribed too.
I thank the Minister for introducing this order, and I agree with the timescale. It is relatively unusual to have legislation come forward this quickly, but in this case we are happy to support it because of the speed and haste with which this has to be done in order to ensure that Hizb ut-Tahrir can be proscribed. We support the UK Government’s proscription of the organisation. We hope that the action taken by the Minister, his Government and everyone mentioned by those on the shadow Front Bench, including the security staff and the police, will ensure that such organisations cannot continue to operate. We support the work that they are doing, and we hope that it pays off. We hope that we have positive results as a result of the action that the Government, the security services and the police are taking. As I say, we are happy to support the proscription in this case.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I rise to support the Government. The proscription of Hizb ut-Tahrir is overdue, but it is always good when it happens. I continue to welcome my right hon. Friend the Minister to his position. Both of us, of course, have been sanctioned by the Chinese Government, and I may touch on this in a second.
The proscription of Hizb ut-Tahrir is overdue because it has been well known for quite some time here that the UK has been at the centre of operations. I am always concerned about how long it sometimes takes us in the UK to openly recognise that there are forces at work within this United Kingdom, using our freedoms and our judicial system to protect themselves while they promote the most ghastly behaviour and attitudes. After all, Hizb ut-Tahrir is an antisemitic organisation, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) and my right hon. Friend the Minister have already made clear. Antisemitism is at the core of its whole being. It is not an organisation that is passingly antisemitic; antisemitism is its core belief.
Let us be clear that the killing of Jews is a priority for Hizb ut-Tahrir, and its activities here in the UK, as a result of the protection it is no longer to have, have influenced a lot of people who do not really understand what is going on in the middle east and who settle on the idea that Hizb ut-Tahrir is somehow espousing the views of a people who are persecuted abroad. It is not; Hizb ut-Tahrir is talking about the persecution and eventual eradication of the Jewish people.
Hizb ut-Tahrir is antisemitic and racist, as my hon. Friend said. It has also supported other groups in their attacks on Israel, as has been said already. Hizb ut-Tahrir celebrated the October murders and the taking of hostages, and it has encouraged terrorism globally, but it has also provided excuses for some of the nonsense being said at the moment on some of the marches. People do not seem to understand what the organisation is saying. I support my hon. Friend’s call to make sure that its online activities are sought out and shut down, and that those involved in them are prosecuted under the criminal code. That is critical, so I welcome my Government’s decision to proscribe Hizb ut-Tahrir.
It is worth bearing in mind—I want to come back to this in a second—that, as my hon. Friend said earlier, there are 79 terrorist organisations proscribed here in the UK, and this will now add to that. I want to come to the other bit here, which is to do with the IRGC. I will not spend too long on this, but I want to make this point, because these organisations are linked. We are proscribing an organisation that is dangerous, vile, antisemitic and abusive, but there is another organisation whose fingers extend into all these organisations around the world and here in the UK: the IRGC. It makes possible much of what goes on in terms of the attitudes towards antisemitism, the attacks on people in a democracy, and the misogyny and homophobia within these organisations. It is not just one element; it is complete.
We know now that, since the attacks in October, Iran has accelerated its executions of those who have protested against the current regime. An astonishing number of executions is now taking place, under cover of what is going on in Gaza. It is quite appalling. We know that the IRGC is behind Hezbollah. It directs, it arms and it makes sure that Hezbollah acts as its arm in Lebanon and beyond. It is attacking Israel right now to keep Israeli forces tied up in northern Israel for tactical reasons.
The second part is that we are now engaged in trying to protect our shipping in the Red sea. Who is supplying the Houthi rebels—the terrorists—with arms and direction? It is Iran, which has upped its supply of rockets to the Houthis. When the Foreign Secretary says to Iran that it has some responsibility for this, as I think he did quite recently, Iran’s response is, “Mind your own business and leave that alone.” It is still supplying the Houthis with weapons and, if we do not get our action right, they could shut down the Red sea for all trade.
When I was approached by somebody who had been protesting, I asked, “Are you aware of what is going on here?” They said, “What does it matter? These people in Israel are persecuting the Palestinians in Gaza, so they’re right to do this.” I replied, “So you don’t mind massive inflation hikes and huge extra costs. You don’t mind the fact that trade cannot travel down the shorter route and all the other considerations.” They just looked at me blankly, because they had not understood what we were talking about. Right now, Iran is directly involved in what is going on in the Red sea to try to shut down the free world’s business arrangements and affect the cost of goods.
Another part of it is that Iran was quite clearly involved in the attacks that took place in October on peaceful Israeli citizens and others, the murders and the hostage taking. How does it benefit from this? Iran knew that Israel would have to respond. That was exactly what the whole plan was: to launch a vile attack, murder enough Jews and make sure that Israeli territory was invaded, so that Israel was bound to attack.
I am not going to spend time debating exactly how far Israel should have gone or any of that, which is a separate issue. My personal view is very clear: Iran is linked to Russia, and what is going on takes the attention off Russia and divides America’s ability to supply arms and weaponry. It creates a major debate, which is going on in the United States at the moment, about giving supplies to the Ukrainians to defend themselves, and it also takes the attention away from China’s aggression towards Taiwan.
Iran is part of the axis of authoritarianism which also includes China, North Korea, Russia, and now Syria and others in the middle east. Iran is very dangerous, and the IRGC is the arm of the Iranian Government. Not only is Iran behind all the attacks, but it continues to persecute Christians to a degree that we simply cannot understand. Executions, incarcerations and abuse are taking place, as we heard yesterday in a report delivered here in the House of Commons.
What do the Government plan to do about the IRGC? America has asked the British Government to proscribe it, and we simply have not yet responded. I asked a nameless individual who is involved with this, and with the Government, why they have not proscribed the IRGC. They said, “It keeps a back channel for us to get America through to Iran.” I said, “What? We now have to act as a back channel for the Americans? Don’t we think the American Government are quite capable of finding ways to engage Iran if they have to?” They then said, “Well, of course we would lose our ability to influence Iran.” I asked them, “Exactly what influence have we had over Iran in the last five years?” They said, “The release of hostages.” I said, “No, you didn’t. You paid for those big time, and they were hostage-taking for that.” We have no influence over Iran. Iran is dangerous, and the IRGC is the arm of that threat around the world.
With two Iranian banks sitting in the City of London, we know how the money is transferred to support some of these organisations, creating some of the nonsense on the marches. Most people do not understand what “From the river to the sea” means, notwithstanding the fact that Hassan Nasrallah made it very clear that the chant means clearing the Jews out of Palestine, and Israel being gone. It is as simple as that. He said that that is what it means, yet people chant it and the Metropolitan police still does not seem to understand that it is an aggressive, antisemitic chant.
I have a Jewish sister-in-law who told me the other day that she has never felt more under threat and less safe in this country in her whole life. What a statement to make in this United Kingdom, which upholds freedom of speech and the rule of law—that a Jewish person now feels desperately under threat just getting up and going to work in the morning. That is simply not right and we need to deal with it. Who is behind all this? The IRGC.
In his concluding remarks, will the Minister please address this issue? It is more than high time. This is a cross-party issue; I know that those on the Opposition Front Bench have called for it. We have to face this. The IRGC must now be proscribed and the banks of Iran shut down in the UK. The IRGC can no longer continue to use the UK as a base for further operations. I congratulate the Government on their decision on Hizb ut-Tahrir, but we should go a lot further. We need to protect our citizens.
Christian Wakeford (Bury South) (Lab)
I congratulate the Government—I will not say that too many times—on taking the important and welcome step of banning the extremist antisemitic, misogynistic and homophobic group that is Hizb ut-Tahrir. I echo the comments of the hon. Member for Brigg and Goole (Andrew Percy) about the 136 hostages still in Gaza. One message that we can all get behind is to bring them home now.
This group poses a threat not only to democratic institutions but to people, including the vast majority of the Muslim community here at home. Hizb ut-Tahrir, or HUT, as I will refer to it, has blighted our shores and specifically our university campuses for years. It has run meetings and distributed leaflets, including one that described Jews as “cowards” and called on Muslims to
“purify yourselves against the deceptions of the Jews”.
On the Israel-Palestine conflict, it has called for
“the elimination of the monstrous Jewish entity, restoring all of Palestine to the lands of Islam”.
If that is not an organisation preaching hatred, I do not know what is.
Anti-racism campaigners including the Union of Jewish Students have been particularly alive to the threat, and its officers have run campaigns over many years, including, successfully, to have the group outlawed by the National Union of Students as early as 1994. Despite that, UK HUT activists have sought to circumvent such efforts. Reports have emerged that between 2022 and 2023, keynote speakers from HUT spoke to 10 separate campuses over 18 months, including in Bradford and Birmingham, and at the London School of Economics. The speakers included Luqman Muqeem, a prominent figure on the HUT website, who spoke five times at the University of Birmingham, despite having posted videos online in which he said that Muslims must fight Jews to the death and voiced support for the attack on Sir Salman Rushdie.
HUT has a long history of using front groups on campuses. For example, radicals from the group have sought to pass themselves off as the One Nation Society, the Democracy Society, the Islamic Front, the Muslim Media Forum, the Muslim Current Affairs Society, the New World Society and the 1924 Society. In changing the legislation, will the Government also look at those organisations to ensure that HUT can find no further loopholes to preach its hatred on university campuses? Such groups were observed at universities across the country, including in Nottingham, at Queen Mary and, locally to me, in Manchester. Concerns have been raised about how the group might have continued to undermine our legal and official systems using those front groups.
The Antisemitism Policy Trust’s Danny Stone, who has rightly been mentioned several times in the debate, highlighted to the Public Bill Committee for the Higher Education (Freedom of Speech) Act 2023 the danger of HUT, in its many guises, misusing the new free speech protections in order to solicit compensation. It is therefore extremely welcome news that that potential loophole is now firmly closed, but I ask the Minister to confirm that front groups, aliases and other masks will not be enough to prevent HUT’s members from being identified and prosecuted.
This move will be welcomed not only by me: numerous others—individuals such as Sir Anthony Glees, and groups such as the CST and HOPE not hate—have called for HUT to be proscribed. Although I welcome today’s move we need, as the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, to go further and proscribe the one group that is not only providing funding but destabilising entire regions: the IRGC. That is more important now than ever, considering the last 100 days or so. Both groups are antisemitic; they blatantly repeat those tropes time and again. I have mentioned that in this Chamber, on the streets, in Westminster Hall and online, and will continue to do so, because we need to highlight what an evil organisation the IRGC is.
Both organisations perpetuate homophobia, suggesting that both Labour and the Conservatives should not be trusted because of our work to protect LGBT communities. Again, that is not welcome in a modern, tolerant society. The IRGC rails against what it defines as the “secular, democratic, liberal system”, and in favour of a global caliphate. These are freedoms and rights that we have worked hard to earn, and we will protect them with every ounce of our being, because that is the right thing to do.
Worldwide, HUT has reportedly been behind attempted coups in Jordan, Syria and Egypt, again with the backing of the IRGC. The IRGC is also in Yemen, backing the Houthis, in Lebanon with Hezbollah, and in Gaza with Hamas. Those activities are not limited to foreign countries: we see them on the streets in this country, which is why we really need to tackle the threat of the IRGC seriously. When we see Hamas operatives here in the capital, that is a step too far. This move from the Government is important and correct. It is slightly overdue, but it is welcome. I thank the Minister for coming to the House to highlight it, but we need to go further.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I place on the record my support, and that of my party, for today’s measure. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) gave a lot of important international context, particularly in relation to recent events in the Red sea and in Yemen. I will spare the House a repetition of what he said. I simply place on the record the fact that I very much endorse his analysis of what is going on there, not least because it brings into sharp relief the role of the IRGC. As others have said, it seems as if the focus of our attention must now turn in the direction of the IRGC. If it is any consolation to the Minister, I think it has emerged from today’s debate that a consensus to proscribe the IRGC would be easily constructed.
Whether to proscribe Hizb ut-Tahrir is not a new debate; it has been going on for a considerable time. I think it was back in 2011 that David Anderson, the Government reviewer of terror legislation, advised against proscription on the basis that the group was not advocating violence. Clearly, we are in a different situation today, but I mention that because I feel slightly conflicted about the speed with which we have moved. We should be slow to ban any organisation because, as a society, it is not something we should do lightly. However, once the evidence is there, as it clearly has been for some time and as it has been in relation to the IRGC, then, as the hon. Member for Barnsley Central (Dan Jarvis) said, that raises questions about whether our processes for making such decisions are adequate.
Obviously, it is important to take this step as part of our domestic legislation at the moment, because not to do so would send the worst possible signal to those in the Jewish communities who have felt so embattled since the events of 7 October. I hope they will take some comfort from the fact that action of this sort has been taken against those who have preached, and done more than preach, antisemitism.
However, there is a wider legislative context. As important as it is to proscribe organisations like Hizb ut-Tahrir, that is only part of a bigger plan. It seems that many of the other tools in that fight, such as the Prevent strategy, are not achieving the goals we need them to achieve. They are overdue for a proper root-and-branch review. Let us not forget that a spiral emerges here: we see the growth in antisemitism and antisemitic hate crime, but that in turn produces a growth in Islamophobia. So we do not proscribe Hizb ut-Tahrir in the interest only of Jewish communities, but in the interest of Muslim communities as well.
The tackling of extremism, of which that is just part, has to be at the heart of finding a long-term and sustainable way of approaching the issue. I encourage the Minister to speak again to his colleagues in the Home Office, in particular about the Prevent strategy. We know what we want it to achieve but, as we view it today, I have serious concerns about its ability to deliver what we need it to do.
Jim Shannon (Strangford) (DUP)
Truly, the world is becoming a hostile place. The more we watch what happens across the world, the more we are convinced of the evil intent of many. I thank the Minister for his statement, clarity and strength of intention. I know that my party will fully support him, as we always do when it comes to these matters.
The reasons for the proscription have been clearly outlined by others. It is important that we do something in relation to the Hamas murders of 1,200 innocent Israelis, the taking of hostages, the continuing war of aggression and their view about the annihilation of the Israelis. In the UK, we want to play our part. The Minister has outlined how we can take on the terrorist activities and intentions of those who march in the streets and think they have a status above the law of the land. Today, quite clearly, they do not, and we welcome that.
The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) always speaks with much wisdom and brings forward issues that we all endorse in their entirety. The proscription of the IRGC is critical because it funds, trains and gives weapons to many terrorist organisations across the world. We need to take that proscription a stage further, on top of this one, and do that with a zest. I am ever mindful that 79 organisations have been proscribed already.
As a Northern Ireland MP, I am obviously aware of the issues, as is the right hon. and gallant Member for Tonbridge and Malling (Tom Tugendhat), from his personal point of view, having served in the Army and now as the Minister for Security. The Real IRA and the New IRA have been most active, and the threat level in Northern Ireland is at a height we have not seen for some time. There have been a number of demonstrations across Northern Ireland and we are ever mindful of international terrorism, as those who want to murder, destabilise, kill, maim and destroy come together, wherever they may be from.
I am conscious that it is not always appropriate for the Minister to answer certain questions in the Chamber, but I want to put on the record my concerns about the connections between IRA republicanism and international terrorism. During the demonstrations that have taken place across Northern Ireland, things were said and done that should never have been done in this great United Kingdom of Great Britain and Northern Ireland, where I am great believer in unity and being better together.
On commitment by police forces, has the Minister had the opportunity to speak to the forces here on the mainland and to the Police Service of Northern Ireland, to ensure that they collectively take on Hizb ut-Tahrir, the terrorist organisation proscribed today? I am sure he has, but it would be nice to have that on the record. It is important that we are unified on the issue, as we are in the Chamber, especially when it comes to intelligence gathering and working collectively. Police forces need to be able to exchange their points of view and the intelligence that they gather to ensure that they protect our citizens across this great United Kingdom of Great Britain and Northern Ireland, which we all have a duty to do. The proscription today is a step in the right direction, but I hope the Minister can provide some reassurance on my final points.
Tom Tugendhat
I pay tribute to Members for the tone in which the debate has been conducted. I place on record my thanks to the hon. Member for Barnsley Central (Dan Jarvis); it is a pleasure to stand with him again in protecting our country’s interest, this time a little closer to home. I also pay tribute to the hon. Member for Halifax (Holly Lynch), who was with him on the Opposition Front Bench earlier. She was an extremely able predecessor in his role and a great help.
I repeat the hon. Gentleman’s thanks to the intelligence services, who have done so much to prepare the evidence in various different ways which has enabled us to support these various actions, although much of the information has been public, so it has been able to prepare it in the usual way. I thank him for his comments about the way in which this work has been done. As he recognises, it has been a little quicker than we would normally go, but I am grateful that the Scottish National party and the Labour party recognise that there is an urgency to this matter and have supported it.
I will briefly answer the hon. Gentleman’s questions about the timing of the proscription. This is, quite rightly, detailed legal work. The judgment has to be made extremely carefully. It must be not only lawful but proportionate, and we must get that balance right. As others have mentioned, proscription is an extremely powerful tool. It is not a political tool or to be used at the whim of a Government or Minister to silence critics or debate. This tool should be used only to protect the British people from terrorism—that is its purpose. We need to make absolutely clear that we are using it appropriately and only when necessary. All of us in this House, I hope, support freedom of views and freedom of expression. We have all heard things we may not like, but we would defend the right of people to say them, and we must ensure we are extremely careful about that.
The hon. Gentleman raised a question about the definition of extremism. As he knows, we are working on that. I pay a huge tribute to those working on that and to the Government’s countering extremism adviser, Robin Simcox, who has been an extremely important voice in much of the debate. I thank Members on the Opposition Front Bench for their support.
I turn to my hon. Friend the Member for Brigg and Goole (Andrew Percy), who has been a good friend of mine, but more importantly a good friend to his community for a very long time. He is tireless in the campaign against antisemitism. He rightly identifies what we are seeing today as being in the mould of the fascist movements of the 1930s. We could easily mistake some of the words on the works of Hizb ut-Tahrir as coming from the voices of some of the fascist leaders of the 1920s. They bear a stark resemblance to them. He is absolutely right that the online activities must be banned, and he will be pleased to hear that they are: all activities by this group are banned.
My hon. Friend is also right to say that Jews should not be afraid to be in London at any time, and certainly not on a Saturday or a Sunday, when many people want to go out shopping or just to be with friends and family. These protests, sadly, have not only been vile demonstrations of some of the worst parts of our community, but radicalising moments in themselves. I know the police are aware of that; the Home Secretary and I have both spoken to them about that.
Christian Wakeford
I thank the right hon. and gallant Member for giving way. He joined me on the march against antisemitism several weeks ago when tens of thousands of people were saying no to Jew hatred. May I use this moment to say that there is a similar march in Manchester this weekend? If any Member wants to join us to say no to antisemitism, they would be more than welcome.
Tom Tugendhat
The hon. Gentleman will see me again on Sunday, as I will be there with him.
Sir Desmond Swayne (New Forest West) (Con)
May I suggest to my right hon. Friend that his Department look into the possibility of confining marches to a static location? The fact is that all people are currently being inhibited from attending central London at weekends and that is having a significant impact on commerce and shopping in the west end. I would not want to see demonstrations inhibited by having costs imposed on them, but it seems a perfectly reasonable compromise after so many marches to have static locations.
Tom Tugendhat
I thank my right hon. Friend for his suggestion. I shall certainly take that away and I am sure that my colleagues in the Department will come back to him.
May I just turn to the remarks of the hon. Member for Aberdeen North (Kirsty Blackman)? She rightly praised the Union of Jewish Students in Aberdeen and the work that it has done. The union has done some incredibly important work around the United Kingdom in our universities, which have seen a rise in antisemitism on their campuses. I have already spoken to Universities UK and the Russell Group about that. We simply cannot tolerate this. It is simply unacceptable to see students excluded from education because of the vile hatred of others. It is wrong. It is unBritish and it will not be tolerated.
The hon. Lady will understand—I hope that she forgives me—why for very obvious reasons I will not go into the actions that the police and other organisations may be taking, but she can be assured that conversations have been had that will lead to actions as soon as possible to ensure that this proscription, once authorised by both Houses, will not be sitting idly on the books and will be enforced as she would rightly expect.
Kirsty Blackman
Just before the Minister finishes on that point, will he commit to updating us, even if it is some time down the line, about the impact that those actions have had, to assure us that they have worked?
Tom Tugendhat
Absolutely, I will do that. I hope the House forgives me if I sound slightly coy in the way that I put this, but I will update the hon. Lady as soon as I can in the most appropriate way possible.
I now turn to the comments of my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who noted that we were both sanctioned by the Chinese state. I can add both the Iranian and Russian Governments, and after today, I think he will be joining me in at least one of those. What we are seeing is a pattern of violence, as he rightly identifies. It has spread out of Tehran over many decades and has had an influence on many different groups, including, as he correctly identifies, in the Red sea in this latest episode of Houthi piracy. We are incredibly aware of that, which is why the Government have rightly taken action. The Prime Minister was absolutely clear immediately that we should stand not just with our American allies, but with many others around the world in making sure that we defend freedom of navigation and that we protect those people working on ships, who are from very diverse backgrounds and have been targeted by this violence in recent months. Sadly, we have seen the murder of crews and ship workers by Houthi rebels in the Red sea, and it is right that we take action. I am grateful to the Prime Minister for his clear and determined response.
My right hon. Friend the Member for Chingford and Woodford Green also raised the question of dealing with state actors in this matter. This is something that he and I have discussed in the past. I draw the House’s attention to the recent introduction of the National Security Act 2023, which gives extraordinary and extra powers to our intelligence and police services to make sure that they may take action not just against intelligence services but against any who are supporting them and working with them. It is not, I admit, the same as proscription, but it does give a huge range of authority to our community to make sure that it is properly defended against the threats that we see.
It would be wrong of me to comment further on proscription options that we may be holding in reserve. As Members will know, for very clear reasons these are matters that we do not discuss until we are ready to announce them. None the less, it is absolutely right to say that we are taking the state abuse of our citizens, or the intervention of states in our Government or economic processes, extremely seriously. That sits alongside the National Security and Investment Act 2021 and hopefully demonstrates clearly to the whole House that we will not tolerate foreign interference or foreign aggression on our soil, or illegitimate uses by foreign intelligence services of organisations within the United Kingdom that are designed to do us harm.
The hon. Member for Bury South, who I will be seeing on Sunday, also spoke about front groups, and he was absolutely right to do so. If there are aliases or name changes, provisions can be changed quickly. That is covered under the Terrorism Act 2000. Should it be necessary, we will update the House, but Members can be assured that simply changing a name does not avoid proscription.
The right hon. Member for Orkney and Shetland (Mr Carmichael) spoke about advocating violence and the challenge of radicalisation in what we are seeing. I draw the House’s attention to the fact that the independent reviewer of Prevent, Sir William Shawcross, has just published his report. He has done what I think is a magisterial piece of work, which highlights areas where we need to update and change policies. We have accepted his recommendations and are in the process of making sure that the Prevent duty, as it applies to this country, is there to help and protect families across this country not just from the effects of violence, but from the effects of radicalisation. The pain that many families must feel when their children are torn away into these cult-like organisations is horrific, and it is quite right that we protect families from every community across this country.
That is where the hon. Member for Strangford (Jim Shannon) is right as well. Of course this action applies across the whole of the United Kingdom and of course we will be having conversations with police forces across the whole of the United Kingdom. I regularly communicate with the PSNI, which is a very important part of our national police presence and a very effective police force. I am grateful to the hon. Member for his comments and support. This action is about protecting the whole of the United Kingdom against terror. Sadly, his part of the United Kingdom has experienced far too much of that, although I remember very clearly, as a child here in London, the effects of Northern Irish terror being felt on the underground and on the buses, where, sadly, too many people were also killed and maimed.
On that, I thank the House for this debate. I hope that this motion will go through as intended to ensure that this country is better protected.
Question put and agreed to.
Resolved,
That the draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2024, which was laid before this House on 15 January, be approved.
Backbench Business
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text
Loan Charge
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Sammy Wilson (East Antrim) (DUP)
I beg to move,
That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes; further notes that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of HM Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the Government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act.
Before we start the debate, on behalf of my party, I pass on our condolences to the family of Tony Lloyd. He served for a short time as the shadow Minister for Northern Ireland. I always found him to be very courteous and well informed, and he wanted to be well informed. He asked the right questions and was always prepared to engage, even though he often did not agree with some of the stands we took. He was always happy to engage with all the parties in Northern Ireland, and we pass on our condolences to his family.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am slightly concerned that there is something wrong with the sound. Let us start again.
Sammy Wilson
Thank you, Madam Deputy Speaker. I hope that the point I was making about Tony Lloyd was picked up. I want to pass on the condolences of our party to his family, and I pay tribute to the work he did as shadow Minister for Northern Ireland.
I thank the Backbench Business Committee for granting the debate. It is a timely debate and I know that the many thousands of people across the United Kingdom who have been affected by the loan charge in a very detrimental way will be glad that it is being considered in this House. Over the past two weeks, we have been looking at the dramatic fallout of the Horizon scandal at the Post Office and, quite rightly, we have been focusing on what belatedly can be done to repay and to deal with that great injustice. I say to the House—I do not think that I am being overdramatic when I say this—that we are looking at another Horizon scandal, and the parallels are frightening.
First, because of the actions of a Government Department, 10 people in the United Kingdom have committed suicide and many others have attempted to take their own lives because of the pressure they were put under by officials and by statute passed by this Parliament. We have heard time and again in evidence to the loan charge and taxpayer fairness all-party parliamentary group of the disruption and disaster this has caused in many families.
Secondly, despite the fact that alarm bells should be ringing in the Treasury, no action has been taken. Indeed, some Ministers have even refused to meet the group. Others have simply put out the party line and regurgitated the excuses of His Majesty’s Revenue and Customs for what is happening.
Wera Hobhouse (Bath) (LD)
Does the right hon. Gentleman agree that it seems to be the case yet again that people acting in good faith are being prosecuted and pursued, whereas the people who absolutely knew what they were doing are getting away scot-free?
Sammy Wilson
That is a point I want to come to.
We are seeing that once again Ministers are turning a blind eye, and these lessons should be learned. Apart from two examples of Ministers that I can think of, one of whom—a former Minister—is present, Ministers turned a blind eye for years. We then had the result, but it was not until an ITV programme brought this matter to the nation as a whole that action was taken.
We have had attempts by HMRC to justify what it has been doing. In the past, postmasters and postmistresses who had unblemished records for years were accused of being thieves. We are now being told that the people who HMRC is chasing today are—to use its words—“serial tax evaders”. Minister, I have to say that when I read the letter that you—
Madam Deputy Speaker
Order. The right hon. Gentleman knows that he does not address the Minister directly, but through the Chair.
Sammy Wilson
When I read the letter that the Minister sent to the joint chairs of the all-party group, he started by once again reminding us that
“As you are aware, disguised remuneration schemes are contrived tax avoidance arrangements that seek to avoid Income Tax and National Insurance contributions”.
It is almost like a warning: “Don’t be taking up these cases, because these are bad people that you are talking about.” That is exactly parallel to what we found with the Horizon scandal.
Chris Stephens (Glasgow South West) (SNP)
I agree with how the right hon. Gentleman has introduced the debate. He mentioned the scale of how HMRC is going after people caught up with the loan charge. Is that not in stark contrast with how multinational companies are entering into sweetheart deals with HMRC, such as Google and Vodafone?
Sammy Wilson
Indeed, it is, and I will come to the issue of HMRC chasing the individuals, rather than the promoters.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Will the right hon. Member give way?
Sammy Wilson
Let me just make this point: it seems that HMRC is going after those whom it regards as easy targets. The promoters of the scheme have not paid one penny, despite the fact that they have made hundreds of millions of pounds from the schemes, have mis-sold them and have disappeared when there is any attempt to get at them. The promoters are not being pursued and, indeed, HMRC has admitted that it does not intend to chase after the promoters, and yet individuals are being harassed to the point where many of them have taken their own lives.
Mr Dhesi
I congratulate the right hon. Member on having secured today’s debate, especially given that at least 10 people have sadly committed suicide. It is of course essential that disguised remuneration schemes are dealt with fairly and effectively, but why does he think the Government and HMRC have not actively pursued the architects and promoters of the scheme, rather than the victims who have been led into the schemes?
Sammy Wilson
The answer is easy: the victims are easy targets. They are the ones who are easy to chase. The promoters of the schemes have all kinds of means of defence. Many disappeared when they realised that they may well be pursued. This is the baffling thing, and maybe the Minister can explain it: if these schemes are designed as contrived ways of avoiding tax, why is HMRC not pursuing even some of the new promoters who are establishing themselves today and who will have disappeared by tomorrow, once it is seen that their schemes are being challenged?
Sir Robert Buckland (South Swindon) (Con)
I am grateful to the right hon. Gentleman for his courtesy on this occasion. I share his comments about Sir Tony Lloyd, who was a member of the Northern Ireland Affairs Committee, which I chair.
The right hon. Gentleman makes an important point about the regulation of promoters. Where is the regulation of those individuals? This is an ungoverned space. Surely, as they are trying to sell financial service products, they should at least come under the control of the Financial Conduct Authority. We have to not just focus on what has happened in the past, but look at what is happening now, where innocent people are being exploited.
Sammy Wilson
I intend to come on to that point.
The parallels, as I say, are frightening. I ask myself this question and the Minister should be asking it of himself, too. In one, two, four, five or 10 years’ time, will we see the same embarrassment and see Ministers who parroted the Department’s line being asked the question, “Why did you not raise the alarm at the time? Why were the explanations not challenged, and why were the calls for help not heeded?” That should be a salutary warning to Ministers.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is very unusual that I agree with every word the right hon. Gentleman says—[Interruption.] I am being generous. The simple truth is that HMRC failed to police this issue. Many people made HMRC aware of their involvement in the schemes and it took HMRC years to get back to them or even to look into the issue. That is one of the real crimes here.
Sammy Wilson
I am glad the hon. Gentleman agrees with everything I have said today. I think he has even dressed to show that agreement, with his red, white and blue outfit, and I appreciate that very much. Maybe he has become a Unionist as well—even for a day, that would be something of a miracle.
Let us look at the role of HMRC and the approach it has taken. It has been rightly pointed out that there should have been much more supervision within HMRC of what was going on. HMRC is now saying that it believes that many of the people who used payroll loan schemes should have been paying pay-as-you-earn, but at the time HMRC was not challenging the schemes, and the promoters were able to say they were legitimate. For years, people were acting in the belief that they were legitimate and were no risk. And here is the ultimate irony: HMRC employed people on contracts to do work for it, knowing that those people were being paid in that way, and never challenged it. That being the case, we have to ask what the level of supervision was, or whether HMRC changed its mind and then, having done so, decided to go after the individuals who had undertaken those schemes.
Some people will argue, “Well, it’s their own fault. After all, they knew that when they went into one of these schemes their tax liability may have been reduced. If people did that, they took that risk.” The fact is that many people did not volunteer to go into those schemes. Many people were forced into them. Some people were put into those schemes and did not even know they were in them. As far as they were concerned, they were employed by a contractor and their tax was being deducted, and they only found out later on that that was not the case.
By the way, this was not rich people employing fancy accountants to tell them how to avoid their tax. Many of the people caught up in the schemes were ordinary workers—nurses, teachers, cleaners—and some were people who wanted to set up a company and, because of the flaws in IR35, this was the only way of dealing with their tax affairs. People did not always volunteer to go into the schemes. One of the ways we discovered that HMRC was involved in this was that one lady came to us and said, “I was employed by an IT consultancy, the contractor was working for HMRC and the only way I could get the job was to be paid through one of these schemes. I did not particularly want to, but I wanted the work, so I had to enter into the scheme.”
HMRC, apparently, was quite happy for that contractor to pay its workers in that manner. In many cases, if people wanted to work, they were forced into these kinds of schemes. For years, although it was quite clear that there was an employer-employee relationship and they were under the direction and supervision of a company, they were treated as if they were separate stand-alone employees or individual self-employed people who could pay tax in that way.
The result was, of course, that when it was decided that the schemes were not tax compliant and there were years and years of back tax, Ministers were persuaded to introduce the loan charge in the Finance Act 2017. It was very convenient for HMRC to have that arrangement in place, because using the loan charge enabled it to decide what tax an individual was liable for and people could not challenge it in the normal way tax disputes can be dealt with, through either tribunals or courts. That was ruled out for them. In many instances, HMRC did not even have to explain how the tax bill was reached. If people do not have any redress to a court or tribunal, they really have no chance of negotiating whether or not the tax they have been deemed liable for is a liability and a correct liability.
Added to that was the fact that many employers saw the schemes as an advantage, because they could employ people without paying employment taxes or having to deal with pensions or holiday pay. That is why many employers forced individuals to be paid in that way. Those who argue, “Look, these people tried to avoid paying tax, so slap it up them now, they have reaped the consequences and they should just grin and bear it.”. should bear in mind that thousands of people are affected by this because they were impotent to stop that method of payment being used and were told by the promoters that it was all compliant and that there was no risk. In fact, 93% of those in the schemes were assured there was no risk and that they were compliant.
Indeed, they probably were compliant until, in later years, HMRC decided they were not compliant. People were left with tax investigations going back to 2010, which have resulted in many of them finding it impossible to pay. I want to mention a couple of case studies, because the confusion in HMRC made it very difficult for people to settle. HMRC did not seem to have the capacity to tell people. In one particular case, an individual was told after six years, “You owe £91,000.” He wanted to settle rather than be put in the loan charge. He was told, despite the fact that that was not in the criteria, “We don’t believe you can afford to pay £91,000 on the terms you have given.” So no settlement was granted and he was put in the loan charge, and the man who could not afford to pay £91,000 was then hit with a bill of £124,000. He could not afford to pay £91,000 in a settlement, but he was pushed into a loan charge where he had to pay £124,000.
We have the back charges, tax years that people thought were closed have been reopened, the confusion and some people now have to pay more in tax than they actually earned. HMRC does estimates; I think one person was told, when an explanation was sought of why they owed so much, that it was because everybody else paid that amount—and of course there is no redress.
Ashley Dalton (West Lancashire) (Lab)
I congratulate the right hon. Gentleman on bringing such an important debate to the Chamber. I have been contacted by several constituents who have described themselves as victims of this situation. Does he agree that those people who are being asked to pay what my constituents describe as incomprehensible amounts of money, while their employers and the people who provided those schemes are not being pursued for one penny, are victims, but are assumed to be criminals? Does he agree that they must be treated as victims and that this must be covered by a truly independent inquiry?
Sammy Wilson
That brings me to the very last point— I promise it is my last, Madam Deputy Speaker. I will simply list the points and other people can take them up and expand them later on. There are a number of issues the Minister must consider. First, while I have no evidence of this, we have been told that HMRC officials, just as Post Office officials were, are on commission for the money that they bring in through the loan charge. The Minister must confirm whether that is the case, because if so, it would act as a huge incentive for them to pursue individuals relentlessly.
Secondly, I trust that the Minister, in his new position, will challenge the Department’s lines on this matter. We need a greater challenge than we have had so far. Thirdly, I believe that the loan charge needs to be repealed because it is not fit for purpose and is having a detrimental effect. Fourthly, the employers and promoters must be pursued. Under the law, they were responsible for collecting tax from the employees. That is the basis on which tax demands are now being made of people—that they were employees, not self-employed.
Fifthly, of course we recognise that the Government have to collect tax when it is due, but the current method of pursuing this will not bring in tax revenue because people are going bankrupt. A group of professionals has proposed that the Government could claim back an affordable proportion of the tax that is owed. They would get at least some tax revenue out of it while stopping this relentless pursuit of individuals. In the longer run, I think we need a Bill of rights for taxpayers, and for tax fairness to be built into legislation, but that is a matter for a longer debate.
There are people who are suffering today because they are being battered by the cosh that HMRC officials are using on them to extract money that they do not have and which many of them do not believe they owe. I ask the Minister to grasp this nettle and ensure that we do not have another Horizon scandal.
Madam Deputy Speaker (Dame Rosie Winterton)
As colleagues can see, this is a very well-subscribed debate, with another debate to follow. In order to give equal time to Back Benchers throughout the afternoon, my advice—I would rather not put a time limit on—is that colleagues stick to about seven minutes. I am sure that Greg Smith will lead the way.
Greg Smith (Buckingham) (Con)
I will do my best, Madam Deputy Speaker. I congratulate the right hon. Member for East Antrim (Sammy Wilson) not only on securing the debate but on the incredibly powerful and eloquent way in which he opened it—I entirely endorse his speech.
Indeed, alongside the right hon. Gentleman and the noble Baroness Kramer, I serve as co-chair of the all-party parliamentary group on the loan charge and taxpayer fairness. It is through that lens, and given the many constituents of mine who are victims of the loan charge, that I have become profoundly troubled by what I can only describe as one of the most significant crises faced by British taxpayers, certainly in my living memory.
The loan charge has haunted, and is still haunting, thousands of our constituents throughout the country, bringing with it a train of despair and destruction that should weigh heavily on HMRC and all of us in this House. To date, an estimated 60,000 people have been affected by the loan charge. Tragically, as has already been said, 10 of those people have come to the tragic conclusion of ending their own lives. I invite the House to reflect on a retrospective HMRC tax policy that has led to 10 people—I pray no more—ending their lives.
Those are not numbers on a page; they are human tragedies. Each one is a poignant reminder of the injustices felt by individuals who are still grappling with the devastating consequences of the amount of money asked of them—in some cases, more than they earned in the first place—as the right hon. Gentleman mentioned. The profound impact of the loan charge extends its reach far beyond mere statistics and financial repercussions. It is a devastating narrative that encompasses contractors, freelancers and agency workers from all walks of life. Those professionals, seeking compliance under IR35 legislation, took and followed professional guidance in good faith.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
On the point about taking advice and being led by agencies and promoters, does the hon. Member agree that it is simply scandalous that none of those agencies has been pursued by HMRC for their part in this, and that that further heightens the injustice felt by those who are being pursued?
Greg Smith
That is a point on which we have consensus. It is outrageous that promoters have not been pursued. The all-party parliamentary group has considered and taken evidence on that, and I will certainly continue to push that point in this debate and for the weeks, months and years ahead, in trying to get justice for all the victims of the loan charge and holding to account those who gave that advice, who, I suggest, knew what they were doing.
Dean Russell (Watford) (Con)
I thank my hon. Friend for giving way and the right hon. Member for East Antrim (Sammy Wilson) for securing the debate. Does my hon. Friend agree that protecting the coffers of the state should never take precedence over protecting the lives of our constituents?
Greg Smith
My hon. Friend makes an incredibly powerful point with which I entirely agree. Part of the ask of this debate and of the all-party parliamentary group on the loan charge and taxpayer fairness is a fair settlement that people can actually afford to pay; that takes into account—dare I say it—reality; and that understands what people actually earn and that they acted in good faith and took the professional advice that I mentioned a few moments ago.
Wera Hobhouse
The hon. Gentleman is being generous. Is it not the case that what we need is proper transparency in how Government bodies operate? When so many people see these problems again and again, that really undermines trust in Government.
Greg Smith
I agree with the hon. Lady. Of course we need transparency across all walks of life—Government or otherwise. The right hon. Member for East Antrim referred to the Horizon scandal and the Post Office. There is a clear similarity, and there needs to be an inquiry and serious action. How can a body of the state—the Post Office in the case of the Horizon scandal, and HMRC in the case of the loan charge scandal—be autonomous in being judge, jury and executioner at the same time? We simply have to take that away. Checks and balances must be built into HMRC if we are to see justice for the loan charge victims, as well as for victims of any other scandal that might well come about.
I could say much more on this subject, but I am mindful of the time limit that you have set, Madam Deputy Speaker. I am incredibly grateful to my hon. Friend the Minister for his letter yesterday offering a meeting with the all-party parliamentary group. I hope that we can get that meeting in the diary as soon as humanly possible so that we can have meaningful dialogue on how to get to a settlement, a review of HMRC practices and justice for the loan charge victims. Given the colleagues whom I have seen bobbing, particularly from the Conservative Benches, I suspect that we will hear many more powerful stories and testimonies from victims of the loan charge, whose lives we should see as totally valuable and deserving of our attention and of justice.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
I am grateful for the opportunity to speak in today’s debate, and I congratulate the right hon. Member for East Antrim (Sammy Wilson) on having secured it. I thank the Backbench Business Committee for granting the debate. I declare my membership of the loan charge and taxpayer fairness all-party parliamentary group.
As we have heard, this is a long-standing issue that continues to have an impact on the health and wellbeing of thousands of people right across the country, including residents of Merthyr Tydfil and Rhymney. Among them is my constituent, Geraint Owen, whom I have met on a number of occasions over a long period of time. He and other victims of this scandal have experienced considerable frustration in attempting to deal with HMRC.
The way HMRC has dealt with this issue has caused unbelievable hardship, distress and anxiety for large numbers of the people we serve. This sorry saga bears striking similarities to the Post Office/Horizon scandal, which we have heard so much about in recent weeks. Ordinary people up and down the country are being asked for unrealistic payments, which is causing huge financial hardship, bankruptcy and worse, such as the risk of losing their home and an increased risk of suicide. There are real concerns that this is another scandal where the Government have ignored the alarm bells and cries for help, so I urge them to revisit it and ensure a fairer and more effective approach.
This debate is a huge opportunity to highlight the injustice of the loan charge scandal. At a recent meeting of the all-party group, we heard more harrowing stories about how people’s lives had been ripped apart by the loan charge. The Government’s approach has meant that ordinary people who were victims of mis-selling are facing huge bills, which is causing them untold distress and personal harm. Tragically, the number of suicides linked to this scandal has reached double figures. Clearly, Labour supports attempts to tackle tax avoidance schemes, but that is not what we are talking about in this case. The fact that there have been so many shocking accounts of harm and distress suffered by people liable to the loan charge, including those we heard at meetings of the all-party group, demonstrates how the Government’s approach has gone badly wrong.
Labour has consistently called for a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes. We are clear that the 2019 Morse review cannot be the final word on this matter. We tabled an amendment to the Finance Act 2020 that would have forced the Government to review the impact of the scheme and the fairness of HMRC’s implementation of the policy, and a proposed new clause to the Finance Act 2022 that would have required the Chancellor to commission an independent review to consider HMRC’s approach to the loan charge scheme and make recommendations on how it should be altered; it would also have required the Government to explain to the House of Commons what efforts they had made to guarantee the review’s independence.
We need a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes, but weaker on their architects. As the all-party group previously suggested, the tax burden should not fall solely on the individual users of the schemes, but should be shared by the employers and agencies and also, ideally and appropriately, the operators and promoters of the schemes. On that basis, the Government should change course and announce a fairer approach.
We must remember the human impact of the loan charge: as we know and as I touched on earlier, HMRC has confirmed that there have been 10 suicides of people facing the loan charge; it has also confirmed that there have been 13 suicide attempts. That in itself should be enough reason to stop this cruel retrospective policy. I urge the Government to accept that there is something deeply wrong with their current approach to the loan charge scheme.
Reports to the Treasury Select Committee last October stated that around 40,000 people still face the loan charge, meaning that four and a half years on, there are still many unresolved cases. The current approach has not worked: HMRC is still trying to resolve tens of thousands of cases, and 10 families have lost loved ones to suicide. This whole sorry saga is cruel and unacceptable. Action is needed now. The Government must think again. When ordinary people who are the victims of mis-selling face financial ruin and personal harm because of the way the loan charge has been pursued, action must be taken urgently. I hope that in summing up today’s debate, the Minister will address the points I have made.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will try not to repeat everything that has been said, but it is very difficult not to. One thing relevant to this debate that I discovered in government, and that I have constantly observed, is that HMRC is a very peculiar Department. HMRC is unaccountable; it is the only Department that does not publish accounts every year, so there is no scrutiny of moneys lost or failed to be gained. HMRC acts independently, with many civil servants going on radio and television, not reliant on Ministers to take the responsibility for them. That has been one of the biggest problems: the backdrop to this issue is that HMRC operates almost with impunity. I have seen Ministers come and go at the Dispatch Box who are told one thing by HMRC, leave their position and then come back and say, “I did not know half of the stuff that was going on.” I simply say that there is a problem with HMRC.
Drew Hendry
Regarding the way that HMRC works, campaigners have often asked to see draft documents that are hidden from them—for example, they are not able to see a draft of a report. One of the things evident in the Post Office/Horizon/Fujitsu scandal is that holding back information is detrimental to justice. Does the right hon. Member agree that that information should be made available wherever it is practical to do so?
Sir Iain Duncan Smith
Absolutely, which brings me back to the point I was just making. I mean no insult to the civil servants, who work very hard; it is simply that the culture of HMRC is one of impunity. It does not behave like many other Government Departments. We have problems with other Departments—I ran one, so I know what that is all about—but HMRC acts very differently from them, and ultimately it is protected by the Treasury. That is where one of the biggest problems arises, and it is why it is so difficult to get any information out of HMRC, because even the Ministers who are in charge of it seem unable to command or direct it to provide that information. I make that observation from having worked in government.
Sir Robert Buckland
My right hon. Friend is making a very powerful point about HMRC. It was the product of a forced merger of the Inland Revenue and Her Majesty’s Customs and Excise by, I think, Gordon Brown and the Labour Government. The merger was rushed—they were pushed together—and HMRC has never enjoyed the proper scrutiny and ministerial involvement that it should have received. Does my right hon. Friend agree that now is the time for a root-and-branch review and a change to the nature of HMRC—retaining its independent functions, of course, but allowing for greater ministerial oversight?
Sir Iain Duncan Smith
I agree. I did not intend my speech to head off down this track, but I will observe that it has now become clear that HMRC is unable to find any legal basis to justify its claim that it has to pursue individuals, but not those who promoted the schemes. HMRC has tried to deny that for some time, but it has now become very clear; even its head, the permanent secretary, has stated that
“In recent months I have repeatedly tried to obtain legal analysis to understand the strength of our claim with very little success. For yesterday’s hearing we were initially given a summary of avoidance wins, some of which seemed to have nothing to do”
with the schemes. I simply say that HMRC still cannot justify the legal basis for pursuing individuals and not going after those who promoted the schemes.
Sir Iain Duncan Smith
I am conscious of time. If my right hon. and learned Friend will forgive me, others have to speak, and I am going to try to stick to Madam Deputy Speaker’s prescription. I apologise to him.
I will quickly raise the cases of three of my constituents —Gareth Lloyd, Joe Green and Karen Duberry—all of whom have been facing terrible impositions. I am sure many colleagues have seen similar cases. Gareth Lloyd says that
“Facing and now paying the loan charge has meant years of stress with a constant stream of demands and letters from HMRC…when I should have been enjoying watching my young family grow up I’ve been constantly at fear of potentially losing our home.”
Joe Green says
“Nine years of worry, nine years of anxiety, nine years of not knowing what to expect from HMRC other than continual bullying tactics to try and extort monies from me”
with threats. Karen Duberry says that she was
“Shocked and alarmed when I learnt of the loan charge. I felt alone, scared, threatened and worried for me and my family…The mental stress on me and my family has been immense”.
We know that because at the far extreme of these cases, people have committed suicide, but there are many other problems between the extremes. All these people deserve a process that is better, fairer, open and reasonable and that goes after those who originally promoted the schemes. These people were under the impression—as was the case—that the schemes were quite legal.
The important point is that HMRC conjured up a retrospective process to deal with this, which is appalling. Historically, that has not been done—you deal with where you were at the beginning—but HMRC felt it had lost a whole load of taxation and did not want to blame itself. What it did was to go after those individuals, threaten them and cajole them.
An inquiry took place, but it now appears that the Morse review was not entirely independent. I gave some evidence, as many did, to the original inquiry, and I assumed at the beginning that it was completely independent. In fact, it turns out that it was not. HMRC got to see elements of the report before it was even published, which is astonishing to me as we were given a clear understanding that it was to be independent. There is much more that needs to be done, and that review is by no means the end of it.
I was surprised when my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who was the Minister at the time, said:
“We…have plans under way to crack down further on the promoters of these avoidance schemes.”
It turns out that he did not. Why is a Minister allowed to stand at the Dispatch Box to make a statement drafted by civil servants, which we then find out is not right? He was not right: HMRC was going after the individuals, not those who promoted the schemes. As we have discovered, HMRC has no legal basis for doing that, so the whole thing has become a terrible mess.
I congratulate those who brought forward this debate, because there is so much more here that needs to be said. I just want to conclude by saying that this has been going on for too long, with laws changed retrospectively, denials about what HMRC was doing, bullying and intimidation, and a failure to come clean about the processes engaged in all of this. It is so familiar; as the right hon. Member for East Antrim (Sammy Wilson) said, we are in the middle of the problem over the Post Office, and we see the same things in that process. We have been seeing the same denials, protections and pretences with the loan charge for a long time. It is very clear now, and I hope the Minister agrees, that we are long past the point where we need to start recognising that this is not the way for any Government Department to behave when dealing with an issue such as this that has clearly created a huge problem.
My constituents and many others who have faced this issue should not be pursued in a way that treats them from the start as a criminal, rather than as somebody involved in something that HMRC never said was illegal at the time, but is now pretending that it is. I hope the Government will now recognise that we do not want to see a repeat of what happened with the Post Office scandal as a result of HMRC’s bad behaviour.
Sarah Green (Chesham and Amersham) (LD)
I start by thanking the right hon. Member for East Antrim (Sammy Wilson) for securing this important debate, and by acknowledging the many thousands around the country affected by the loan charge. I know that some of them are in the Gallery today, including some of my own constituents. I pay tribute to their dignity and determination in pursuing their cause. I will focus first and foremost on the fundamental unfairness of the loan charge, but also, as has been mentioned, on the Morse review and the need for greater transparency.
I have been contacted by a number of people whose lives have been turned upside down by the charge. While it is not possible for me to give voice to all of them today, I would like to share one story that I think speaks to the experience of many.
“I have been forced to raise huge sums, including borrowing from my mother and by borrowing huge sums against my home, leaving me in a position where I cannot plan for my own or my family’s future. The impact on my mental and physical health and my relationships has been huge and I am in genuine fear for my future wellbeing if HMRC is allowed to continue unencumbered.”
Another constituent in great distress told me how she made the difficult decision to have an abortion, based on concerns about affordability stemming from the loan charge. Combined with the number of suicides that have taken place, this paints a truly harrowing picture of the impact this unfair charge is having.
The report by the loan charge APPG published in 2020 found that there was direct interference in the Morse review by both the Treasury and HMRC, and that both organisations made clear attempts to direct the review from the outset. Given the tragic impact of the charge and the public interest in this matter, surely it is time the Government set up a genuinely independent review that achieves a fair and final resolution for all.
I shall end by raising a final point about the need for greater transparency. Late last year, one of my constituents was successful in overturning the Information Commissioner’s decision to allow the Treasury not to release the final draft of the loan charge review. The original freedom of information request was made in December 2020, yet over three years later the material has still not been released. My constituent tells me that their attempts to obtain the documentation have been met with what they consider to be “deliberate attempts” to avoid FOI obligations, including being told by the Treasury that the information had been destroyed, then that it could not be found and eventually that it was prohibitively expensive to locate it. Such lack of transparency undermines trust in our institutions and must be addressed. I hope the Minister can assure me that the Government will look into this particular matter and take all reasonable steps to ensure that the information is released as soon as possible.
With over 50,000 people directly impacted and the tragic death of 10 people, it is vital that we do everything we can to find a fair and final resolution to the loan charge scandal. To gain public trust, far greater transparency from HMRC and the Treasury is needed. Most importantly, we need a new and genuinely independent review to take place.
Sir Desmond Swayne (New Forest West) (Con)
If, as Ministers insist, the law was clear in 2010, it would have been entirely unnecessary to have the 2017 legislation open up previous tax years, because my constituents who have been affected by this mis-selling scandal—for that is what it is—made their tax arrangements entirely clear in those years and were unchallenged by HMRC within the proper windows available. It was entirely unnecessary, and the reality is that the vendetta that HMRC is now pursuing, notwithstanding the obfuscation of the written answers to parliamentary questions, is exclusively against the victims of that mis-selling scandal.
Happy are those Members of this Parliament who were not here in 2017 and did not vote in favour of the Finance (No. 2) Bill of 2017, which contained the measure that is now torturing so many of our constituents. We are culpable for not having spotted, not having asked about and not having examined the consequences and implications of the measure that was brought before us. It is a measure that cries foul against every tenet of proper legislation with, first, its retrospective aspect, and secondly, its taking away from our constituents the right to appeal to a tribunal with an administrative or quasi-judicial process to have their case fairly considered. It made HMRC both judge and jury in their case—and what a judge and jury it turned out to be!
We now come to another of these debates in which we recount the latest injustices and enumerate the rising tally of suicides, and the Minister will in all probability make the same speech as his predecessor made the last time. I ask hon. Members: what is the point? The point, as I see it, is that it affords a recurring opportunity for hon. Members to recant what the House did when it created this injustice. Drip by drip and Member by Member, the tally will increase, and ultimately it will reach the public consciousness.
The right hon. Member for Kingston and Surbiton (Ed Davey) served on the all-party group, and we are indebted to him for his chairmanship when he was in the chair of the group. He has been hounded over the last few weeks and found himself in a very unfortunate position for being the postal affairs Minister at the height of the Horizon scandal, notwithstanding the fact that he was lied to on an industrial scale. Nevertheless, it has been very uncomfortable for him to have the charge that he did not ask the right questions, he did not pursue it enough and he did not spend time with the victims. Let that be an object lesson to us and to all those Ministers who stood at the Dispatch Box giving us flannel and peddling the fiction that the limited inquiry was in some way independent.
My advice to my hon. Friend the Minister today is this: set aside the brief that you have been given, and end this debate by just saying that you have sat here, you have heard what we have said and you are going to go away and ask the awkward questions and spend time with the victims. Because ultimately this will reach the public consciousness—we may even have our own TV drama; the reality is that there is plenty of scope for such a drama—and when it does reach the forefront of public consciousness, we will rue the day that we did not take the action when we could.
John Mc Nally (Falkirk) (SNP)
That was a phenomenally good speech. I also congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this debate and for his powerful and passionate speech, which was very impressive. I also thank the all-party group on the loan charge and taxpayer fairness and the Loan Charge Action Group for their diligent work on this very serious issue, and indeed my own constituents who have suffered greatly from this total injustice.
On 7 July 2021 I stated in this House that the loan charge was going to be the next Post Office scandal, and just look where we are with that today. Will it take another modern form of the stocks by way of a further ITV drama to expose and publicly humiliate HMRC or the Government into some action on the loan charge scandal? Unfortunately, it would seem so, but I certainly hope not.
As others have said, a vitally important part of the loan charge scandal is that these ordinary people were contract workers doing a job of work for somebody or some organisation that simply needed their services. Most importantly, they were workers, and as workers they were entitled to protection under the agency rules. The agency rules determine that their employer—be that the agency, the umbrella company or another body in the supply chain, or the end client itself—was liable to deduct the correct amount of PAYE and pay that to HMRC at the time, before paying the worker their salary. These companies simply did not do that. HMRC was well aware of the arrangements and, as has been said, did not pursue for tax any of the entities as the workers’ employer. HMRC was also well aware many years down the line that it was legally out of time to do so.
HMRC had, and still has, a duty to establish who the employer was and who was directing, controlling and supervising the worker who had been supplied. It has not done so; it has failed time and again to do so. Hence the invention of the retrospective loan charge to get around that very inconvenient and uncomfortable fact. It is entirely unacceptable to continue to hound ordinary workers with no rights or funds for legal defence against such a powerful Government body as HMRC.
This has all the hallmarks of the Post Office scandal. What is really vexatious and concerning is that HMRC continues to hoodwink MPs into believing that it is going after the promoters who put the workers into this abominable position, when we all know it is not doing so. A further issue is that these groups of companies—these promoters—that sold arrangements to freelancers have not only not been asked to pay a penny of the disputed tax, but their arrangements—“arrangements”—have caused the death of poor souls who were so distressed by the way they had been hounded and criminalised by HMRC that they took their own lives. We all know that HMRC has stated that a total of 10 people have taken their lives over this scandal; the figure is likely to be far more in reality, in this awful and unravelling scandal.
The number of people affected by the Post Office scandal is likely to be dwarfed by the number affected by the retrospective loan charge scandal, purely and simply because of the number of people affected—between 60,000 and 70,000 at the last count by HMRC, with the figure likely to rise far higher. Too many ordinary people are facing huge bills, and many of them have been suffering untold distress for many years, and in some cases personal harm and indeed suicide because of this ongoing retrospective loan charge scandal. The whole thing is an absolute mess.
I am sure that Ministers must by now be mindful of all these serious issues, so will the relevant finance Minister and the Government now speedily commit themselves to finally commissioning a truly independent review to deal with this mess wholly of HMRC’s own making, and thereby allow us as MPs and parliamentarians to help to right this grievous wrong?
Sara Britcliffe (Hyndburn) (Con)
This is such an important issue for our constituents and I am very grateful to the right hon. Member for East Antrim (Sammy Wilson) for bringing it to the House. It has been mentioned that, given the recent examples that have exposed excesses of power in public bodies, it is only right that the loan charge and the way it is infringing on the rights of individuals is debated in this House. One particular case in my constituency brought this issue to my attention, and it highlights several problems with the way HMRC has tried to combat disguised renumeration schemes through the loan charge.
The way in which HMRC is retrospectively trying to obtain income tax and national insurance contributions raises important questions. The first of them is that the law on tax should be knowable and accessible to the people to which it applies. Based on the case that I have seen in my constituency, that was clearly not the situation. Many individuals who worked for agencies simply did not know that their pay would one day be subject to a disputed tax argument with HMRC, because the loan charge did not exist or because they were mis-sold such schemes by hiring agencies. Added to this fundamental trespassing on the rights of individuals is the fact that we cannot continue with the situation whereby a public body is pursuing retrospective actions against our constituents with them having no right to due process.
Paul Scully (Sutton and Cheam) (Con)
First, I thank the right hon. Member for East Antrim (Sammy Wilson) for his kind words about my time as postal affairs Minister.
My hon. Friend is making the point that this is a really good example of why retrospective policy is not a good idea. There is the fact that HMRC needs to use its investigatory powers, which outstrip those of policemen, proportionately; the fact that it should be going after the practitioners and promoters of these schemes, which it can do under the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 that I passed a few years ago; and the fact that it should not be going after contractors, consultants and self-employed people who the Government and many Government institutions treat as tax evaders as the default, as was seen with the 3 million excluded during covid who felt they did not get the support that others did.
Sara Britcliffe
That brings me to one of my main points. These are ordinary workers. These are our constituents. They are not fat cats; they have not got offshore bank accounts. They are not like that. These are ordinary members of the public who desperately need our help.
That brings me on to another point, which is how HMRC is handling these cases. It is not unfair to say that it is hardly a lesson in how to handle dispute resolution or customer service. One of my constituents received a letter some four or five years ago telling them that HMRC was withdrawing the information notice it had sent in the post. As far as my constituent was concerned, that was the end of the matter and they could get on with their family life. There was no contact for a further three years, but now HMRC has informed my constituent that withdrawing an information notice is not the same as withdrawing its concerns and that, in any event, it is not aware of the reason for the withdrawal in the first place and it would like to revisit the matter. I say to Ministers that the situation is untenable. HMRC cannot have the power to suddenly request tens of thousands of pounds from individuals, appear to drop a case and then revive it on a whim, without any explanation at all. That is an exercise in excessive power by a public body.
We should be going after the disputed tax from those who promoted and operated the schemes and who made huge amounts of money doing so. I understand that might be more complex, but that should not be a barrier. We should be protecting ordinary workers from abuses of power and pursuing those opaque and monied bodies that sought to game the system. I will end on that note. I echo the point that these are ordinary people we are trying to assist. It is time that the Government acted.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
I begin by thanking the right hon. Member for East Antrim (Sammy Wilson) for bringing forward this incredibly important debate. The issue has been live for far too long, and the damage that has been inflicted on thousands of ordinary workers—whether freelancers, contractors or temporary workers—and their families by the loan charge is distressing. The comparison that he drew with the Horizon scandal is real. This is a serious injustice, but what is different from the Horizon scandal is that at least the Horizon victims had the appearance of justice. It may not have been justice, but they had the appearance of it.
As the hon. Member for Buckingham (Greg Smith) made clear, HMRC has persisted and acted as judge, jury and executioner with a ruthlessness that I cannot believe. I have been in meetings with HMRC and it has advised me, “We will never put people under enormous pressure. We will not take more than 50% of their disposable income to recover the costs,” but that is simply not true. The ferocity with which it has gone after my constituents and the amounts of money it has demanded are eye-watering—it is completely impossible for my constituents to meet its demands.
Sir Iain Duncan Smith
A simple point occurs to me: the real similarity between the Horizon programme and this situation is that those who were prosecuted under Horizon and put in jail and so on had it put about by the Post Office that they were greedy people who had stolen money, so the public at first did not have any sympathy. Similarly, in this matter, HMRC has basically said that they were greedy people evading tax that other people then had to pick up and pay. The public still have not picked up on that. These people were not doing that—that is the key point—and breaking through that will get public support for something to change.
Neale Hanvey
I thank the right hon. Gentleman for that point. Not only were the victims of the loan charge victims of mis-selling; they are now the victims of HMRC’s pursuit of them for every penny they can possibly earn. That is not just now, but for future years, so that point is incredibly important.
It is important to remember that we had an opportunity a number of years ago to write off the retrospective element, with new clause 31 to the Finance Bill, which was supported by the loan charge and taxpayer fairness all-party parliamentary group. Unfortunately, because of the timidity of some Members, that new clause was not put forward for a vote. That is deeply regrettable.
It is important that I speak about my constituents, who are my main concern in all this. Four years ago, I spoke about the horrific plight of my constituent Doug Aitken, who was facing a bill of £500,000. To pay that off, he would lose his house and his car. As a self- employed person, he would lose his business, because he would be bankrupt. The Government simply did not listen. He was one of those who had successive completed and closed tax years that were reopened by HMRC, and he was being charged exorbitant, unjustifiable and unjustified rates for all the supposed earnings he had secreted away.
Today I want to speak about another constituent of mine, Alan Geddes, who has a disposable income of £360 a month. The payment demanded by HMRC from Mr Geddes is £783 a month for the next 12 years. That is not the only charge it is asking him to pay; it is also asking him to pay £50,000 up front.
Andrew Bridgen (North West Leicestershire) (Ind)
The hon. Gentleman and many other colleagues across the House have made analogies in their excellent speeches between the horrors of the Horizon Post Office IT scandal and the scandal around the loan charge, which has affected so many of our constituents. I will share with him and the Chamber another analogy: is he aware that HMRC also uses an apparently bombproof system from Fujitsu?
Neale Hanvey
The hon. Gentleman makes a very interesting point to which I think Members from all parts of the House will pay close attention. I thank him for doing so.
Not only is HMRC asking for £50,000 up front, but it has put a £50,000 lien against Mr Geddes’s home. Although his disposable income has now dropped below £360 a month because of the cost of living crisis, HMRC has suggested that perhaps they should renegotiate his terms to bring the rate down to £361.13. However, to get that new rate, he needs to give HMRC another £50,000. Those other charges would then continue for a further 12 years. The question is: what planet is HMRC on? These shocking figures exclude interest being added to allow the payments to be spread over 12 years. It is clear daylight robbery.
Ministers in the Department have previously advised me that approximately 80% of the £3.4 billion that HMRC has recovered through disguised renumeration settlements between the Budget of 2016 and the end of March 2022 has been from employers. Am I therefore correct in presuming that that figure is £2.72 billion? Given that the sum that HMRC expected to be brought into charge from employers has already been exceeded, why did it need to pursue loan charge customers for 100% of the tax plus interest, plus accelerated payment notice penalties and plus inheritance tax, particularly when it was fully aware that customers had already suffered a 15% to 20% deduction on their earnings through the mis-sold schemes?
Additionally, I would like to learn why HMRC continues to pursue customers with loans from before December 2010, given that Morse already pardoned those with no open inquiries on the basis that the law was not clear. Those key factors could all be addressed, because HMRC has the facility to amend its settlement terms. It requires no legislation or change in the law. I hope that the Minister will ask HMRC to apply the same treatment to those who have already settled.
Members across the House have been screaming on this issue until we are hoarse. We have sent repeated letters, including ones sent by 120 MPs. We have had publications put out by the APPG and debates in this Chamber, but it is simply not enough. People are on the brink and in despair. If we are to prevent any more constituents from resorting to suicide, we must urgently deal with this issue and grapple with it in a way that was not done with the Horizon scandal.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Because some colleagues have taken slightly less than seven minutes, I have a bit of leeway. I do not want speeches to be extended massively, but if colleagues wish to speak for perhaps a couple of minutes more than seven, I would be content with that.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
May I join the congratulations to the right hon. Member for East Antrim (Sammy Wilson) on securing this important debate? This is why Parliament exists: we are here to seek redress of grievance from an overmighty Executive who abuse their power. This is a classic example of the state abusing its power through aggressive tax collection.
Why is it that in the Bible the tax collector is seen as the villain on almost every occasion the tax collector is referred to? It is because the tax collector seeks to extract more than is by law allowed. In our system, it has always been the case that the job of the tax collector is to raise the tax set out by Parliament—not a penny more, nor a penny less. It is not for the tax collector to squeeze out extra from people if that was not intended.
We know from this discussion that HMRC did not think there was anything wrong with these schemes early on. How do we know that? As the right hon. Gentleman pointed out, it employed people using these schemes. So we are saying either that HMRC is so incompetent that it has no idea about the basis on which it is employing people, or that actually, because it saved some money, it thought these schemes were licit. The other thing we know is that constituents of ours sent in tax returns acknowledging that they were using these schemes, and HMRC did not question them.
Then, in a panic, worried about the tax receipts that were coming in—2010 is an important date when tax receipts were very low and the country had an enormous deficit—a squeeze gets put on, and that squeeze becomes retrospective. But retrospective legislation is basically unconstitutional except in extraordinary circumstances. Whenever there is any retrospective part of legislation, it has to be specifically approved and cleared by the Attorney General before it can be brought before the House. Why is that? It is to safeguard the constitutional right that people know the basis of the law under which they are operating. That is surely proper, because with retrospective legislation people who have behaved properly and honestly and followed the law that Parliament had passed suddenly find that they had not. That is entirely unfair and unreasonable, and it could criminalise any of us for actions we committed years ago.
Dean Russell
Does my right hon. Friend agree that in all these scandals, the presumption of innocent until proven guilty has been turned on its head, and we see the presumption of guilt and one being unable to prove one’s innocence? To use a biblical analogy, this is not so much David versus Goliath; it is David versus an army of Goliaths, and David has had the slingshot taken away from him.
Sir Jacob Rees-Mogg
My hon. Friend is absolutely right. HMRC, through the amalgamation of the Inland Revenue and Customs and Excise, has extraordinary powers. Customs and Excise historically maintained extraordinary prerogative powers—much greater, actually, than those of the Inland Revenue—and the coming together of those two bodies has brought a more aggressive culture to our tax system. It is a culture that assumes that taxpayers, following the law as they understand it and indeed as HMRC understood it, may be doing something wrong. That is a bad principle under which to operate. Members need, as we are, to look after the interests of constituents who are being affected in that way.
We need to allow people to know that their tax affairs are cleared after an inquiry has not been opened. That is set out: there is a 12-month period in which tax returns remain open and a seven-year period under which people have to keep records, and yet we have passed retrospective legislation that overturns all of that. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) was absolutely right that those of us who were here in 2017 should be appalled that this got through without being noticed and without being stopped. What he said to the Minister was absolutely right: we should look carefully at the ministerial responses.
HMRC is in the odd situation of being a non-ministerial Department. It is not properly accountable. With most Departments, the Minister says “Go” and—at least theoretically—they goeth. With HMRC, its independence is such that it can effectively ignore ministerial control. But that should work two ways. If the Minister cannot control HMRC, he should not read out the rubbish that it provides for him to read out from the Dispatch Box, and he should be well aware of the warnings given of Ministers who have either been willing to read out things that turn out in future to be untrue, or not asked the right questions.
I very much look forward to the speech by the shadow Minister, the hon. Member for Bristol North West (Darren Jones), because he has the advantage of independence. Not having gone native by virtue of being in the Treasury, he can bring—I hope—an independent mind to this. Bearing in mind that there will be an election this year, and who knows what may happen in that and what responsibilities may fall upon his shoulders, it is really important to know that the Opposition are on the side of proper constitutional practice.
The whole point of our system is that we come here, as we have done since the 13th century, to seek redress of grievance for our constituents when they are badly treated. This is a classic example, and Governments are absolutely appalling at answering it. People have mentioned the Post Office, but it is not just that; it is Hillsborough and infected blood. For some strange reason, Governments have a desire to defend the mistakes of long since past Administrations, and they do that to the disadvantage of constituents today. I hope that on this occasion it will not happen, or at least it will not continue to happen.
There is an ability to set it right, and there is an ability for the House to do more. If HMRC is not producing documents, we have things up our sleeves that the House can do to continue to exert pressure—the Backbench Business Committee can allow Humble Address motions to be tabled—but it would be so much better if the Minister at the Dispatch Box, who is one of the most able and intelligent Ministers in this current Administration, were to grasp this and deal with it to save our constituents from further pain—and, frankly, put HMRC in its box.
Hywel Williams (Arfon) (PC)
It is a pleasure to agree with so many right hon. and hon. Members, which I must say is a novel experience for me. Looking at the history of this scandal, it reminds me of the time when many of our constituents were claiming working tax credits. Sometimes those credits were overpaid, and they would receive letters from the Revenue, which were standard letters but had individual clauses stitched together to give the semblance of having been personalised. One such sentence is etched on my memory. It goes like this:
“Even though we told you that your assessment was correct, it was not reasonable for you to believe so.”
[Laughter.]Thank you. This, though, is an extremely serious matter. As I thought about how I would approach the debate, I thought that I would tell the story of my constituent, Rob Cowen, who was a victim of the loan charge scandal. I do, however, speak today for other colleagues in Plaid Cymru, and particularly my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts), who cannot be here, though she would wish to be.
While some people gained financially through the use of umbrella organisations and services, Rob Cowan was using the scheme on advice as a simple accounting service so that he could be paid legally and conveniently, as so many other people found. He had sought advice from accountants, who assured him that the product he was using was legal; only later did he find out that it was not.
Rob has suffered immensely since then. Back in 2011 when he was in his early 50s, he was considering winding down his business, changing his work pattern, moving from full-time to part-time work and enjoying the fruits of his work over many decades. He then started receiving communications from HMRC, informing him that he was liable to pay back thousands of pounds due to the loan charge. That forced him back into full-time work, but that aggravated a repetitive strain injury that he had developed over the course of his working life. Eventually, that led him to becoming disabled, so he could no longer work and make an income to pay back the money due under the loan charge.
At the age of 63, Rob found himself unable to work and unable to pay back the money that allegedly he owes, and he faces a very bleak future. He now has no savings and no ability to work. He cannot pay HMRC the money that it says he owes. He has suffered psychological and physical trauma from this ordeal, as have so many. To give just one example, which I am sorry to say is common, he told me recently that he was unable to switch on the heating during this very cold period. He cannot afford it, as so many people have found.
Hannah Bardell (Livingston) (SNP)
I thank the hon. Gentleman for sharing that powerful example. I have constituents in my Livingston constituency who have suffered and who have come to see me. As the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg) spoke about the other scandals that we have faced and challenged in this place, I was reminded of the Primodos scandal, and the words of Baroness Cumberlege, “First do no harm”. It should be the duty of the Government of the day, and of this place, to first do no harm to our constituents. When harm is done and policies are wrong, as this one has been proven to be, surely it is the duty of Government and HMRC to take some responsibility, and not to put the hon. Gentleman’s constituents, my constituents and others through hell before they get the justice that they need. How many more folk need to die before this will be sorted out?
Hywel Williams
I thank the hon. Lady for that powerful point. It is an old saw, but justice delayed is justice denied, which is quite obviously the case in this matter.
My constituent also points to the stigma associated with what has happened to him, as other right hon. and hon. Members have pointed out. He feels that he is in the wrong; he is being made to feel that he did something wrong but he acted in good faith throughout, sought expert advice and followed the advice that he was given, because he had no intention of doing anything wrong. In contrast, as has been pointed out—I will finish on this point—the owners of the companies that ran these schemes have made considerable sums of money. Rob feels that he has been denied a fair hearing, while other people have got away with it.
As the hon. Member for Buckingham (Greg Smith) said, HMRC is judge, jury and executioner in its own case, which is obviously wrong. People are receiving retrospective punishments even though they acted in good faith. There must be justice for Rob Cowen and the other victims of these schemes and of HMRC’s behaviour. I join the calls on the Minister to act quickly.
Sir David Davis (Haltemprice and Howden) (Con)
In the interests of time I will try not to repeat all the self-evident truths that have been stated throughout this debate. The right hon. Member for East Antrim (Sammy Wilson) made a characteristically fluent exposition of the case. Everyone, from him through to my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg), reiterated essentially the same point: all of a sudden, in the last few weeks, the public have become aware that huge state or quasi-state organisations put their own interests ahead of the interests of the public and, unfortunately, that is not abnormal behaviour. The right hon. Member for East Antrim quite rightly characterised that as being repeated in a high-handed and insensitive way by HMRC but, frankly, I think he understated the point.
Why do I think that? Because HMRC has referred itself to the Independent Office for Police Conduct over those 10 suicides and some other attempted suicides and self-harm. When dealing with Government Departments, that is as close as we get to a confession. Those at HMRC know they have done wrong, and they have known it for some time. They have known that the consequences of this have led to death and enormous harm to people, yet they have continued to do the same thing over and again. How on earth do they justify that when they look at themselves in the mirror?
The only thing I can come up with is that HMRC thinks this is a deterrent. Clearly, it will not raise that much money—three quarters of people will go bankrupt —so maybe it is a deterrent. If it is, that brings us to the next question that the right hon. Member for East Antrim raised: why does it not go after the promoters? The promoters exacted 18% to 20% of the incomes of these people in carrying out this scheme, so there is a large sum of money there—someone said hundreds of millions. It may even be that the victims of the scheme—that is the right word—thought that was the tax deduction, because it was of that order of magnitude. Why has HMRC not done that? We know that many of the organisations using those promoters and contractors were state organisations, including HMRC itself. That might be a reason—it does not want to embarrass itself. It might be because of that that it is complicit in covert advice to those contractors at the beginning. It is entirely possible that HMRC approved it, and those documents are hidden away in HMRC.
What is the answer? My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) was not quite right in saying that HMRC is completely protected. There is one body—the Public Accounts Committee—that can get at this. One of the things that should come out of this debate is that the Public Accounts Committee should look at the documents —not the numbers—associated with those early contracts and see why they were done. That would be one way to get past the assertion made by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) that we cannot deliver a practical outcome. That is one practical outcome that we can deliver.
The second practical outcome we can deliver among ourselves is to address the fact that this is retrospective taxation. As my right hon. Friend the Member for North East Somerset rightly pointed out, our country does not believe that people who undertake behaviour that is not illegal at one point in time should be prosecuted if it becomes illegal in future. That applies in spades to taxes.
One of the things I wanted to do early on in our collective campaign was to move a motion in the House at the beginning of the Budget, under the general motion that is normally put, explicitly to ban retrospective taxation. Let us guess what happened: since then, the Treasury has not moved a general motion. We always get narrow finance motions, which makes it difficult to change anything. I wrote to the Procedure Committee, which I gather is still concerned about this, to ask it to request the return of the general motion at the beginning of the Budget. Then, we could actually put it to the House. Back in those days, we probably did not have the 100-plus supporters that we now have. Today, we could probably carry that motion. I ask everyone taking part in this debate to support that—I might write around and ask everyone—and to write to the Procedure Committee to try to get that corrected. We can use our right of initiative, which we do not have much of anymore, to stop this explicitly.
Kirsty Blackman (Aberdeen North) (SNP)
I agree entirely on the amendment of the law resolution. In fact, whenever I have spoken on a Finance Bill since it stopped being common practice to use it, I have said that we should have an amendment of the law resolution. I appreciate what the right hon. Gentleman says about the Procedure Committee. As a member of the Committee, I can tell him that we have looked at this but, ultimately, it is the responsibility of the Government to make the change—they need to table the amendment of the law resolution. The previous Chancellor was clear that it was a small, technical change that he would not make.
Sir David Davis
Forgive me, but I have been here a long time. The Procedure Committee can do it—it can put it to the House and seek a Back-Bench motion. Guess what? We can move Back-Bench motions that instruct the Government. Some may remember that we did it on prisoner votes, and we won that day. It is about time that we exerted our own rights in this House on this matter.
The last point I want to make is that this whole thing was, if not precipitated, then certainly made worse by the 1999 move by the Government with what is now known as IR35. The complex rules associated with the IR35 triggered part of this behaviour pattern. What is interesting is that the behaviour of HMRC on IR35 pretty much mirrors its behaviour on the loan charge.
A large number of people out there, one of whom is in the Gallery today, have been oppressed by HMRC, frankly. They have an argument over money, let us say £70,000. They win in the first tribunal, so HMRC appeals. They win in the upper tribunal, so HMRC appeals again and takes them to court. The court, of course, then sends them back to the beginning and they do it again.
The House will remember a previous Backbench Business debate when we started the action against SLAPPs—strategic lawsuits against public participation—in which oligarchs use their huge financial power to destroy people. What is HMRC doing? Precisely the same thing. The Government are now moving to stop oligarchs doing what they do themselves, so we need to look at that too. IR35 is a disgrace. When a state organisation with infinite resources—actually, your tax money and mine—uses that power to overrule and reduce the ability of ordinary citizens to protect themselves, I am afraid it is behaving in a way similar to how countries behind the iron curtain used to behave.
Greg Smith
My right hon. Friend’s powers of forensic analysis are second to none, but does he agree that it is actually slightly worse than that? He is entirely right in what he says, but there are also cases, particularly for those affected by the loan charge, where people have allowed themselves, against their better instincts and judgment, to make a false confession of guilt. They have gone through the process and ended up having to pay an extortionate amount of money and think the matter settled; then, HMRC has come back and gone after even more.
Sir David Davis
Yes, my hon. Friend is right. I am afraid that one of the characteristics of miscarriages of justice—I have forgotten who raised this point earlier, so please forgive me for not referencing them—is that the victim at the beginning is probably the most unpopular person in society. They are thought to be guilty and may even doubt themselves over whether they have made a mistake. These people, by and large, have been compelled to do what we are talking about. They have been offered a job on these terms only, so they have had no choice, but then they think, “Well, maybe I should have known.” Then, like the sub-postmasters, they are persuaded by the people dealing with them that they are the only one.
Until our campaign started, all these people felt that they were the only one, or one of a few nasty tax evaders—not tax avoiders—so they gave in. Of course, it is like the Gestapo: confession never saves you; it is a step to execution. That is how it works, I am afraid. That is true of all big organisations full of people who are well-intentioned, but who defend the institution. That is why, answering my right hon. Friend the Member for North East Somerset, it goes on through Government after Government after Government. It is not the Ministers who do this, but the members of the institution.
Sir Iain Duncan Smith
I get all of that and my right hon. Friend is right, but there is a peculiarity about HMRC, with its powers and lack of accountability. It does not publish accounts, and Ministers come and go; they do not really run that Department. That really is the issue. Bad as it might be elsewhere, it is astonishingly bad now because of HMRC’s behaviour.
Sir David Davis
My right hon. Friend the Member for North East Somerset listed a few of the other cases, from Hillsborough onwards, so it does come back to that. Even the Department for Work and Pensions, the Department my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) used to run, has its own police force, in effect, and its own prosecutors. That is one of the clues. This will come back time and again with HMRC and others. He is right that we need to hold this organisation to account. It serves the people, not the Government of the day. This Parliament is the institution that serves the people and, starting with the Public Accounts Committee, we should be holding HMRC to account, but there are many others who should get involved.
I have given a completely different speech from the one I intended to give, because everybody else said everything before I rose, but I will finish with a point I certainly wanted to make. The BBC once referred to me as an old war horse, so I will give the Minister some old war horse advice, having been there once or twice myself. One of the lessons of the last few weeks is that Ministers—junior Ministers in particular—are very easily led to give dead bat answers in the Chamber. They are the answers handed to them by their officials, and they have no other answers to give, unless they want to end their career on the spot—I have done that twice, but never mind. This is not about his answers today, but the simple truth is that unless he wants to be seen in the same light as Ministers in the past—maybe he wants to be a future leader of the Liberal Democrats—he needs to go back to his Department and say, “I want to see the truth. Here are the things you’ve done. Why did you not tell the House of Lords why you are not pursuing the promoters of these schemes? Why did you tell people you only go for half their disposable income when you’re not doing that?” Get the answers, Minister. Then, when you next come back to the Chamber—and you will have to come back to the Chamber again—you can give us the truth.
John McDonnell (Hayes and Harlington) (Lab)
Like everyone else in the Chamber today, I have constituents who have been affected in a way that is incredibly distressing, so I understand completely the howls of outrage sounding across the House today. I want to deal with process, though.
Some hon. Members here took part in the debate in 2018. I would like people to read the speech made in that debate by my hon. Friend the Member for West Ham (Ms Brown). I was the shadow Chancellor then, and she was in my shadow Treasury team. Speaking from the Opposition Front Bench, she set out exactly case after case, as hon. Members have done today, but there was one additional case we drew on which has not been mentioned today—a case in which, because of cuts to local councils and elsewhere, staff had been laid off and then rehired on this basis by public bodies, which was particularly shocking.
Let me read the ministerial response that was given then, because I think we should learn from it. The then Economic Secretary said:
“Although…I have tremendous sympathy for those facing large tax bills, it is unfair to let people get away with not paying the tax they owe. There is support for people who have used the schemes and now find themselves in difficult situations, which require those affected to approach HMRC and bring the matter to a close.”—[Official Report, 20 November 2018; Vol. 649, c. 295WH.]
That was the ministerial response. I do not think we can tolerate a similar ministerial response today, because that led to immense human suffering, including, as some have said, some people losing their lives. Many of them did approach HMRC and they did try to negotiate deals, but there was no element of clemency and no understanding of the individual plight of those people. As a result, many of our constituents suffered badly.
I just want to move on and try to get some resolution. I hope that we and the Government can agree today on review. That review should be immediate and time-limited in months, not years. It should be truly independent, with its independence assured by the victims. It should propose a specific range of resolutions, which will have to include some element of compensation for what people have suffered. The review should look at where the compensation should come from. I think it should come not from from other taxpayers, but from a levy on those who promoted the schemes, and perhaps some elements of the finance and accountancy sector that were involved up to their necks, to be frank. That is my first point.
I also think that we need to review our own role in this, and in what has happened over time. I agree with the right hon. Member for Haltemprice and Howden (Sir David Davis) that not only should the Procedure Committee examine the House’s role, but the Public Accounts Committee should look into how we have arrived at current situation.
Let me give two examples of the background to all this. HMRC has come in for considerable criticism today, and I agree with much of it. What I say now is not in mitigation of HMRC’s role, but an attempt to gain some element of understanding of what has been going on there. HMRC is, rightly, under pressure from all of us, on both sides of the House, to tackle tax avoidance and evasion. Some of us have led campaigns over the last 20 years or so to try to get HMRC to work on that effectively, and I pay tribute to the Government for putting it under pressure to tackle the tax gap. They were the first Government to identify a tax gap of £38 billion, or whatever the amount is; I disagree with the figure, but at least we have a target to aim for. However, at the same time, over those 20 years, both parties have excelled in a Dutch auction to establish the extent to which HMRC’s staff levels can be cut.
I can understand a wish to reduce staffing, but there are better ways of doing it, and for a while the way in which it was done at HMRC was fairly brutal. That resulted in redundancy schemes whereby a whole wave, a generation, of expertise was lost, and it had an effect on the culture of HMRC. According to my understanding, HMRC looked for short cuts and a way of meeting the demand for it to tackle tax avoidance and evasion and the tax gap, and I think that this was one of the short cuts that it invented. In latter days, there would probably have been wiser heads in HMRC itself to suggest that this was not the route to go down because it would bring about more problems than solutions. However, a culture of secrecy and protectionism has developed in HMRC, and we need to understand that if we are to tackle this properly as an institutional failing.
Secondly, we need to look at the role that the House played. I have been going back to the year 2017, and trying to remember what was happening in the House at that time. Some Members will recall that there was not a normal process for the Finance Bill, because the right hon. Member for Maidenhead (Mrs May), who was then the Prime Minister, having assured us all that there would not be a general election—I think she assured us of that five times in the House—went for a walk in Wales, came back, and declared an election. So the finance measures were thrown into the wash-up procedure, which, as Members will know, means political parties sitting down to decide what measures are urgent and must be passed. It was agreed that the Finance Bill would go through in a single day, and as a result of that, this measure was introduced. I should like the Public Accounts Committee and others to look at how that process worked and how it did not work.
The right hon. Member for Haltemprice and Howden made an extremely valid point, which we made about every Finance Bill, or Budget Bill, that came forward. When the Government introduced the “no amendment to law” procedure, that tied the hands of the House when it came to what it could open up, what debates it could have and what amendments it could table. That was introduced by—
John McDonnell
Yes, by Lord Hammond. I think it was almost unprecedented. As I say, it tied the hands of the House, even when it came to further investigating issues relating to the Budget and Finance Bills.
I also think that we need to look at the process whereby Ministers and Opposition are able to question impact assessments and how they are developed, as well as the independence of those assessments. I still find it problematic that impact assessments are prepared largely by the Department and the ministerial team that are promoting the legislation involved, rather than its being done independently. Had there been an independent impact assessment in this case, and time for a proper debate and for amendment as well, the House would probably not have agreed to take this course. When I look back, I think that the implications should have been drawn to the attention of the whole House. The impression given was that this would be focused on a small number of “hard case” tax avoiders or evaders, and their scheme promoters.
Sir David Davis
I agree with nearly everything that the right hon. Gentleman is saying, but why can we not address it now? Why can we not go back and put it right?
John McDonnell
The point I am making is about enabling us to do that. I hope that some of the lessons being learned are learned not just by the whole House but by the Government as well, whichever party is in power. As soon as we introduce measures to fetter the role of individual Members of the House or the House as a whole, we open up the opportunity for mistakes to be made, because policies are not tested effectively in democratic debate in this Chamber.
I welcome the fact that reviews are to happen, but believe they should happen as a matter of urgency, if for no other reason than because I do not want to be here again in a few years’ time—we are now in 2024, and I do not want to be here again in 2026, 2027 or 2028—and find that we are in the same situation as we were in 2019. I do not want to find that more people have suffered and, worryingly, that more people may not be with us as a result of this because they have taken their own lives.
There is an element of urgency about rectifying this issue, and doing it with compassion and, in many instances, with clemency. That will enable us to focus properly on tackling tax avoidance and evasion, and also the institutional arrangements that exist to enable that to happen. We need to have a thorough debate in the House about our regulatory mechanisms, especially with regard to the accountancy and finance sector.
Duncan Baker (North Norfolk) (Con)
It has been referred to many times this afternoon, but the number of times in the last few weeks that I have spoken here about the Post Office scandal is well known, and it has rightly dominated our headlines. However, the question that we have probably not addressed enough is “Why?” There are clearly parallels between why we have addressed the Post Office scandal and the reason for the encouraging speeches we have heard this afternoon. If there is one thing that the British people hate more than anything else it is injustice, and it is the injustice of the loan charge scandal that makes it so important. The stark reality is that the people who were affected by it have had their lives ruined at just the same levels, in terms of financial as well as personal and family impacts, as those affected by the Post Office scandal.
I have been a member of the loan charge APPG since I was elected and have spoken about it in the House. When the APPG ran sessions, back when I was first elected, I heard harrowing accounts of people who are innocently caught up in this situation, including some of my constituents. My constituent Peter Phillips fell into a loan scheme on the advice of tax professionals, as a means to be clear of and compliant with IR35—you could not make it up. There was never any intent to avoid tax: it was simply a means to keep up the income and standard of living that his work as a contractor afforded him.
I have got to know Peter over the four years since my election. There was a time when I probably did not wake up in the morning without an email from Peter—he is watching this debate, too. He is a good, decent, kind and law-abiding man, like so many of the constituents we have spoken about this afternoon. If he had been aware of HMRC’s view on these schemes, he would never have chosen that route, but it was never made plain to him, either by the tax professionals or by HMRC. In addition, he knew many other contractors who had been working through loan schemes for many years without any issues with HMRC.
Peter has settled his scheme with HMRC and, quite rightly, he is utterly aggrieved by the unfairness that, because he told HMRC of what he had done, he became an easy target, whereas the others, who did not tell HMRC, are getting away with it, so to speak. That is grossly unfair and unjust.
In the loan charge scenario, HMRC is treating the loans as both income and loans to the individual’s estate, and is therefore forcing Peter to pay income tax and inheritance tax on the amounts. We have been talking about this issue for a while, and many of the victims are older. As they get older, they are thinking about planning for their family, so these issues become even more of a worry and even more pertinent.
I do not think he should, but Peter is prepared to accept that he made an error of judgment. Of course, he did not make an error of judgment. In my view, this is retrospective penalisation by HMRC. At the very least, HMRC is equally at fault in the well-known retrospective penalties that it imposes. It seems wrong that Peter is paying a penalty for his honesty in disclosing the scheme. If Peter understands that he has to accept some responsibility, why is HMRC not doing the same and, at the very least, offering better settlement terms to all those affected?
Again, the parallel with the Post Office scandal is that many loan charge victims are not believed. These were complex tax arrangements in many cases, and they were simply mis-sold to people. The individuals who took out these arrangements are not tax professionals. They just went along with what they were told and, as we have heard, they have been financially crippled, way beyond any sensible, proportionate rationale. They need help.
I agree with other Members who said we have an opportunity to put this right. At the very least, these individuals could be better supported in three ways. For a start, the loans should be exempt from IHT. Where victims are subject to accelerated payment notices, which occur when HMRC thinks it has detected a tax avoidance scheme—the disputed tax is paid to HMRC—why is proper discretion not applied to the circumstances? Minister, go back and look at the cases and help the victims.
Finally, we should scrap or, at the very least, extend the residual tax waiver, which has been thoroughly unjust time and again. Remember, if a person did not settle before 30 September, HMRC applied the penal loan charge and calculated the settlement, giving a higher figure. That, again, has disadvantaged many, many people.
We took decisive action last week, and many applauded us for that. Were the extent of the loan charge exposed, I think there would be a willingness in society to act. Something should be done, and it can be done. Remember that so many people are innocently caught up in this scandal. It has huge parallels with the Post Office scandal, and it should be put right.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I thank my right hon. Friend the Member for East Antrim (Sammy Wilson) and the hon. Member for Buckingham (Greg Smith) for setting the scene, securing the debate and bringing this matter to the Chamber.
I believe that the job of this House is to act on behalf of our constituents. Although HMRC is independent, it is a tool of the Government, so there has to be some accountability. With great respect, I believe that the ball will lie at the feet of the Minister, whom I am very fond of, at the end of this debate. He will tell us what is going to happen.
The loan charge is a controversial tax policy that has affected thousands of employees, freelancers and contractors who were persuaded or, in many cases, coerced into using loan schemes to reduce their tax bills. The policy, introduced as a tax-related measure in 2019, gives HMRC the ability to collect taxes going back to April 1999. Some people have faced bankruptcy or depression, or even committed suicide, because of this. I ask the Minister how it is possible for HMRC to investigate individuals for unpaid taxes going as far back as 20 years, given that its limit for holding information on taxpayers is only seven years. I cannot quite get my head around that. How does a person challenge a 20-year-old tax demand? Does HMRC breach the GDPR by holding such information for this length of time?
The loan charge policy is unjust and unworkable. It is a retrospective tax that violates the principle of legal certainty and the rule of law. It is a punitive measure that targets innocent taxpayers who acted in good faith and followed professional advice. It has resulted in disastrous consequences, causing immense hardship, distress and tragedy for thousands of people across the country. It is a retrospective tax of an insidious nature, because it changes the rules after the game has been played. Imagine winning a football match 3-0 and then someone comes and says, “By the way, you didn’t win 3-0. You lost 3-0, and here’s how it happened.” That is what has happened with the loan charge. It ignores the fact that many people used schemes because they had no choice, as they were forced to do so by their employers or clients. It disregards the fact that many people who used schemes did not benefit from them, as they paid fees, interest and taxes on their loans.
We all seek professional advice daily in our jobs. If we follow it because we believe that it is legal and correct, we expect to be protected. In this case, people have not been protected. The loan charge is a retaliatory measure, and imposes disproportionate and unreasonable demands on taxpayers who have already paid their fair share. It calculates the tax liability based on the total amount of loans, regardless of the actual income or profit derived from them. It adds interest and penalties on top of the tax, inflating bills to astronomical levels. It denies the right to appeal, challenge or settle tax disputes at a fair and independent tribunal. It forces people to pay the tax in one lump sum, with no regard to their current financial situation or ability to pay.
HMRC employs a process that has caused immense hardship and distress for thousands of people across the country. It has pushed people into debt, poverty and homelessness. It has ruined careers, businesses and reputations. It has damaged mental health, wellbeing and relationships. It has driven people to despair and suicide. According to the Loan Charge Action Group, at least 10 people have taken their own lives because of the loan charge—a sobering figure. It has also identified 13 suicide attempts and 11 cases of serious self-harm. We need to remember that these are not just numbers, but human lives. These are constituents, colleagues, friends and family members. How many more lives will be lost before the Government listen and act? There is an immense responsibility on the Minister and I hope, on behalf of our constituents, that he can give us reassurances on this issue.
Perhaps the most striking feature of all this is the brutality of HMRC’s ruthless approach, which extends to cruelty. It is no stretch to say that people are effectively pursued to the grave and beyond, because bereaved families are ruthlessly pursued by HMRC for its demands. HMRC continues to be unyielding and relentless. It defends its actions by claiming that it has a duty to collect tax that is owed, and that it offers support and flexibility to those who are struggling. I believe that, above else, HMRC has a duty to be competent and to uphold its charter, which states that it will always act to “get things right”. HMRC is in breach of its own charter, and the Minister needs to come clean and give us some reassurance on that.
The loan charge policy has failed on every level—fiscal and human. It has failed to collect the tax that it claims is due. It has failed to uphold the principles of justice and fairness that underpin our tax system. It has failed to protect the rights and interests of taxpayers who have done nothing wrong. It has failed to prevent the harm and suffering that it has inflicted on thousands of people. It has failed to acknowledge the errors that have been made in implementing and enforcing the policy. It has failed to respond effectively to the recommendations and criticisms that have been made by various bodies, including the House of Lords Economic Affairs Committee, the loan charge and taxpayer fairness APPG, and the independent review led by Sir Amyas Morse.
To conclude in adherence to the timescale that I was given, the loan charge is a policy that must be abolished. It is not too late for the Minister and the Government to do the right thing. It is not too late to end this injustice. It is not too late to save lives. I urge the Minister and the Government to listen to the voices of reason, compassion and conscience, and to abolish the loan charge once and for all. The quicker it is done, the better.
Wera Hobhouse (Bath) (LD)
What I am going to say will echo what has already been said this afternoon, but I want to add my voice to those of all Members, and particularly to those of my constituents, because Bath constituents have been affected, and I want to help them as much as I can.
The loan charge has destroyed lives. Of course businesses and individuals should pay their fair share in tax; however, much damage has been done to people who acted in good faith. They have been punished in an entirely inappropriate way, while those who were behind the schemes have got away scot-free. We must defend individual taxpayers, even if we think that they might have been ill advised in the first place. As we have heard, many were forced into the schemes and did not have a choice.
The Morse review concluded that the loan charge was not an appropriate or fair response to the use of payroll loan arrangements. It focuses on loans made many years ago. They were not taxable under the law as it was understood at the time, and HMRC did not act against them. As enacted, the loan charge means that income tax must be paid as if the outstanding amount were part of the income taxed in the current tax year. That does not account for changed financial circumstances, which is particularly relevant for freelancers. Those taxpayers pay much more than they would have if they had paid tax on the loan at the time.
The loan charge’s stated aim is to end tax avoidance schemes, which is understandable. We all want to ensure that people pay their share; however, the central injustice is that HMRC has pursued only the users of the schemes, who acted in good faith, instead of those who recommended, promoted and operated them. As a result, the loan charge is not even a deterrent. There has never been a conviction of those promoting loan schemes that are now subject to the charge. The people who were compliant and disclosed information on their tax returns have been hit the hardest. Nearly all respondents to a survey by the loan charge and taxpayer fairness APPG reported that the risks of payroll loan arrangements were not explained to them. Now some face tax bills as high as £400,000.
Families have broken down, and there have been suicides. People were made to feel like criminals, despite having entered into the arrangements following professional advice. Many have said that as contractors they had little or no choice but to enter the schemes. Many small and medium-sized company owners and directors were also impacted after following professional tax advice. Their staff now face redundancy. As well as the awful mental health impacts, which the hon. Member for Strangford (Jim Shannon) mentioned, tax bills of hundreds of thousands of pounds leave some with no option but to go bankrupt. In many cases, being declared bankrupt will prevent people from working again or paying tax.
None of that would have happened had HMRC identified the issue earlier, publicised the risks of payroll loan schemes and penalised those behind them. The nightmare now unfolding has echoes of the Post Office scandal, where individuals with no intent of wrongdoing were left with impossible choices. Livelihoods and lives are being destroyed while those running the schemes, who knew what they were up to, are getting away with it. In addition, Government bodies are magnifying the injustice, pursuing people with intimidation and making them fearful. We should put that right, rather than making this wrong even more wrong.
We urgently need a genuinely independent review of the whole loan charge, and a fair and final resolution for all. It is clear there is huge cross-party interest. It is in everyone’s interest to finally resolve this, not just for those facing overwhelming tax bills but for HMRC and the Government. The loan charge has not even achieved its intention. Instead, it represents a policy failure that has left thousands suffering. It is for all of us to act, and act quickly.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the spokesperson for the Scottish National party.
Kirsty Blackman (Aberdeen North) (SNP)
I congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this important debate and I thank the Backbench Business Committee for making time for it.
To paraphrase the hon. Member for Strangford (Jim Shannon), this is an absolute mess. It is not an ethereal mess or something that is not happening to real people; it is happening to real people and affecting their lives today. We have a situation where the promoters and operators have faced no recourse. Tens of thousands of people have had their lives changed and torn apart, but HMRC has not been held to account for its behaviour. We must get to a point where there is a resolution. An end must be found, so that people do not have the sword of Damocles hanging over them.
First, on the promoters and operators, as has been said, there have not been any arrests or prosecutions, never mind convictions, of anybody who has been promoting or selling the schemes. Looking at debates from that time, the then Minister made it very clear that they were cracking down on schemes, not the individuals who use those schemes, and gave commitments that they were chasing promoters and operators. Whether Ministers were lied to by officials or knowingly came and told us something that was incorrect, I do not know, but we should never have been given those assurances, which were patently false.
There has been a consistent and concerted campaign of disinformation. MPs talking on behalf of their constituents, as well as MPs talking about the general issue, have been faced with disinformation. Whenever we have tried to find out information, we have been told stuff that is untrue, so I agree with the right hon. Member for East Antrim that we need to redouble our efforts. In fact, it is not even that we need to redouble our efforts, because doubling nothing still makes nothing; we need to make efforts to actually go after the promoters.
It is not only those promoters who promoted schemes back in the day, but the new ones that are springing up, along with other individuals and organisations that are taking advantage of people who are caught up in the loan charge scandal. People are being told, “Oh, you’re involved in the loan charge stuff—I can help you with that.” The person offering the help is then taking their money and running for the hills. That is still happening today, but those folk and those organisations are not facing any sanctions for their behaviour. The Government need to ensure they are taking action.
In many cases, the lives of individuals have been irrevocably damaged. Communication has been terrible and there have been contradictions throughout. Every Member who has talked about individual cases has said that people have been given conflicting information by HMRC. People were told, “If you pay this much, it will be fine,” but then they were told, “Actually, we’ve discovered we want another 50 grand from you,” or, “We need this,” or, “We are going to serve an APN,” or, “We’ve reopened tax year 2003.” As constituency MPs, we have all heard reports that people have been told conflicting information. Either every one of our constituents who has come to us about these issues is lying to us, or this is actually happening. I tend to assume that this is actually happening and that people have been mistreated by HMRC. That is a major concern.
It is impossible even for MPs to find out how much HMRC thinks people owe. There are times when I have had a settlement figure and an amount on behalf of a constituent, and then HMRC has chased that person again for other money later. As I said, it is a sword of Damocles hanging over people. They cannot ever get to the stage of resolution, because even if they settle, HMRC can come back and say, “Sorry, we miscalculated. We are going to chase you for another year.”
There is no point at which people can get out of this trap. I have spoken to so many constituents who—whether it was because of the loan charge or other things—reached the stage where they were terrified of opening envelopes that came through the door. Those of us who are dealing with constituents who are caught up in this know that they are terrified of opening any official-looking envelope, because it might be another demand for tens of thousands of pounds. It might be another demand for money that they do not have.
Michael Fabricant (Lichfield) (Con)
I am following the hon. Lady’s arguments and agree very much with her. Does she not agree that this is almost contrary to jurisprudence? There is no double jeopardy, so a person cannot be tried more than once for the same offence, yet HMRC, on those occasions, seemed to be doing just that.
Kirsty Blackman
I am concerned that we will not get to the end of this and that our constituents will never feel comfortable opening letters again. They will never get out of it.
The Minister needs to look not just at this issue as a whole, but at each individual case. It is very clear that there has been a disparity in the way that people have been treated. We were given the utmost reassurance that nobody would lose their home and nobody would be made bankrupt as a result of this. That was made utterly clear to us. I remember being in Westminster Hall when the Minister stood up and made those promises. Those promises have dematerialised completely. I have a constituent on universal credit whose only asset is his home, and he has been asked for tens of thousands of pounds—not tens of thousands of pounds over a 12 or 20-year period, but tens of thousands of pounds today. The only way that he can get that money is to sell his house. That is directly opposite to what the Minister told us at the time. We need to ensure that these changes are made.
Finally, a resolution to this is the most important point for me. This needs to end, so we need to get a resolution for individuals or for the whole group. People need to be absolutely confident that they will never again get through the door a terrifying demand from HMRC about something that they thought had been sorted out. If we get a proper resolution for each of those individuals —our constituents—we will have done our jobs as constituency MPs.
Darren Jones (Bristol North West) (Lab)
May I start by congratulating the right hon. Members for East Antrim (Sammy Wilson), for Hemel Hempstead (Sir Mike Penning) and the hon. Member for Motherwell and Wishaw (Marion Fellows)—with whom I have worked for many years on the Post Office Horizon scandal—and the hon. Member for Buckingham (Greg Smith), on securing this important debate today? I thank the Backbench Business Committee for granting the time and pay tribute to the members of the loan charge and taxpayer fairness all-party parliamentary group, other right hon. and hon. Members here in the Chamber today, and the journalists who have investigated this issue so doggedly, including The Yorkshire Post.
One of my core political beliefs is that, when one person has power over another, they must be subject to effective checks and balances. That is a crucial part of our democratic system and at the heart of the freedoms that we should all enjoy in a democracy such as ours. In my roles as a lawyer, a trade unionist, a Member of Parliament, the Chair of a parliamentary Select Committee —the Business and Trade Committee—and now a member of the Shadow Cabinet, I have always contributed to ensuring that the delicate balance of power is tilted towards the citizen and away from the powerful, and that unchecked power is challenged and brought into line. On this issue today, I recommit myself to that cause.
That is why we in the Labour party believe a key principle of our tax system is that the Government should treat everybody fairly. It is why we support attempts to tackle tax avoidance schemes, including disguised renumeration schemes. However, HMRC’s approach to the loan charge, which has affected tens of thousands of people to date, means that the Government have failed in ensuring that duty of fairness.
As we have heard, ordinary people who are victims of mis-selling are facing financial ruin and personal harm because of the way in which HMRC has pursued the loan charge. Tragically, at least 10 people affected by HMRC’s behaviour are known to have taken their own lives. The House should pause and reflect on that fact. We are talking about 10 people who were in such a state of despair—10 people who had not only the thought of ending their own lives, but the will to do so. There are 10 families now grieving for the loss of a loved one, all because of an administrative approach to tax collection. It could therefore not be clearer that the Government’s approach is not working. Ministers, including the Prime Minister when he was Chancellor, routinely referred to the 2019 Morse review and asserted that there was nothing else to do. That review cannot and must not be the final word on the matter or a roadblock to getting a fairer solution for people who have been victims of bad professional advice and mis-selling.
While people in everyday jobs, from NHS workers to social workers, are being pursued by HMRC, and some taxpayers are being told that they owe hundreds of thousands of pounds, the Government, as we have heard repeatedly, are doing little to pursue the actual promoters behind mis-selling schemes. Incredibly, HMRC has been issuing fewer than two fines a year against the architects and enablers of failed tax avoidance schemes. How can the Government possibly justify such a light-touch approach for the promoters of such schemes while many of those people caught up in them suffer such serious harm?
Over the course of this Parliament, the Labour party has repeatedly called on the Government to find a fair and effective way forward on the impact of the loan charge. There is no disagreement that such schemes are illegitimate and damaging. However, there have now been significant cases and testimonies to raise alarm bells in the heads of Ministers about the nature of the current approach.
In June 2020, during consideration of the then Finance Bill, hon. Members debated a new clause that would have forced the Government to review the impact of the loan charge scheme, including the fairness with which HMRC implemented the policy. Unfortunately, the Government dismissed the proposal, claiming that the Morse review went far enough. Again, in December 2021, my hon. Friend the Member for Ealing North (James Murray) tabled a new clause to then Finance (No. 2) Bill. It would have required the Chancellor to commission an independent review to consider HMRC’s approach to the loan charge scheme and make recommendations on how it should be altered. That review would have required the Government to explain to this House what efforts they had taken to guarantee the review’s independence. Also, once the review had made recommendations, it would have required the Government to say, on a six-monthly basis, whether they agreed with them, and if so, how effective they were on implementing them.
Such a review could finally have offered a way forward. Labour voted in favour of that new clause and the review it proposed in December 2021, but sadly it was defeated by the Government. Treasury Ministers must realise that this issue is not going away. Two years on from that vote, it is still clear that the Government’s approach to the loan charge means that ordinary people who are victims of mis-selling are suffering financial ruin and personal harm.
Ministers and hon. Members across the House have heard the harrowing accounts of people whose lives have been ruined. That cannot be what the Government envisaged in the first place, and it must not be allowed to continue. Will the Treasury use this moment today to finally agree to commission a further truly independent review? Such a review could consider the approach of HMRC towards the ordinary people caught up in the loan charge schemes and further consider what action should be taken against the architects and promoters of those schemes. That would be in the interests of restoring fairness in our tax system. It could provide a way forward for the many thousands of people caught up in the loan charge and should end the devastating consequences suffered by the people involved to date. That is all we are asking for: an independent review—albeit one, as hon. Members have said, that should be conducted quickly.
Finally, I urge the Minister to answer the specific question put to him today of whether HMRC officials are being awarded bonus payments for the recovery of loan charge moneys. I urge the Government to learn the lessons of other scandals and to stop burying their heads in the sand. I urge the Minister to be brave and to do the right thing.
The Financial Secretary to the Treasury (Nigel Huddleston)
I would also like to thank the right hon. Member for East Antrim (Sammy Wilson), my hon. Friend the Member for Buckingham (Greg Smith) and others for securing the debate, and I am grateful for all the contributions from hon. Members across the House. I would like to name them all, because it is important that we get on the record all those who have contributed. They include my right hon. Friends the Members for Chingford and Woodford Green (Sir Iain Duncan Smith), for New Forest West (Sir Desmond Swayne), for North East Somerset (Sir Jacob Rees-Mogg) and for Haltemprice and Howden (Sir David Davis); my hon. Friend the Member for North Norfolk (Duncan Baker); the right hon. Member for Hayes and Harlington (John McDonnell); and the hon. Members for Merthyr Tydfil and Rhymney (Gerald Jones), for Chesham and Amersham (Sarah Green), for Kirkcaldy and Cowdenbeath (Neale Hanvey), for Arfon (Hywel Williams), for Strangford (Jim Shannon) and for Bath (Wera Hobhouse); and, indeed, others who have contributed to the debate.
There is no doubt that we have heard today the strength of feeling on the issue. Of course, I stand at the Despatch Box as not only the Minister—Financial Secretary to the Treasury—but a constituency MP who has also had representations on these issues from my constituents.
The loan charge, alongside the wider issue of the use of disguised remuneration schemes, is a complex subject that is deeply impactful for many of our constituents. I can assure hon. Members that the Government take the issue incredibly seriously and recognise the impact the loan charge has had. I will endeavour to address the points that have been raised in the debate, but I also wish to reassure colleagues that many of the questions they have asked, about disguised remuneration, Government policy, the loan charge and the approach and tone taken by HMRC, are precisely the questions that I have been asking officials, for the very reasons they have outlined.
I hope that during the course of my response I can provide some additional reassurance because, particularly in the light of recent circumstances, I want to make sure that I am making the right decisions and asking the right questions. Tax authorities and tax Ministers are never popular—it is the nature of the work—but I want to make sure that we act in a way that is reassuring, correct and fair to all taxpayers. I take that duty and responsibility very seriously. For example, I have had discussions and conversations with Jim Harra, the chief executive of HMRC, in the light of the Post Office scandal, about whether there are commissions or perverse incentives for people that may lead to distorting behaviour, and I have been reassured that there are not. This debate and these conversations are very useful, because they enable me to ask the right questions of my officials.
I will not be able to give everybody the answers they want, and I am going to disappoint some people with this response, because I believe we have taken the right approach. There are certain areas where I will continue to ask questions. I am aware that I will not be able to satisfy everybody today, but that will never stop me from continuing to ask the right questions.
Briefly, by way of context, because not everybody who is listening to this may be aware, the purpose of the loan charge was to ensure that users of disguised remuneration schemes paid their fair share of income tax and national insurance contributions. Disguised remuneration schemes are contrived tax avoidance arrangements that seek to avoid income tax and national insurance on income by disguising it as some other type of payment, typically in the form of a loan that is wrongly alleged to be non-taxable. Hon. Members should be in no doubt that, as has been recognised across the House, those schemes cost the Exchequer and other taxpayers hundreds of millions of pounds a year. Indeed, the total burden is to the tune of billions of pounds.
It is therefore right that, when we identify these completely inappropriate schemes, we take action. From the earliest days of the schemes, HMRC opened thousands of inquiries into their use and challenged their operation through the courts. In 2017, the Supreme Court agreed that the schemes did not work and have never worked to legitimately avoid tax, so tax is due on these payments. However, as I have heard very clearly in this debate, many questions have been raised about how we recover that tax due and who has paid it.
In 2022, the Court of Appeal ruled that, even where other parties may have obligations to withhold tax under PAYE, the liability for income tax is always that of the individual, fully endorsing a long-standing position of HMRC and of Governments of all colours. That is a key point: the individual is ultimately primarily responsible for the tax they owe and for their own tax affairs.
Wera Hobhouse
Does the Minister not recognise that quite a lot of people who used the schemes, who were made contractors against their will, are often just individuals who are not tax experts, who paid the tax they were asked to pay at the time and did not think anything was wrong until years later, when suddenly HMRC came to pursue them? Does he not recognise that he is doing the wrong thing to those people who really did not know better?
Nigel Huddleston
I thank the hon. Lady for her comment and I understand completely where she is coming from, but there are multiple points to discuss there. The schemes were never legitimate; they were always tax avoidance, and therefore there was always a clear path that tax was owed. With respect to who then pays, I will mention that in a moment, but, if we move away from the underlying principle that individuals still have personal responsibility to check their tax affairs, it is very difficult to move back to it. I will also come on to the point she raises about further Government action in a moment, because there are some people are being deceived and forced into errors that are completely inappropriate.
The early stages of such loan schemes involved the very wealthy and people who, I think we can all agree, knew exactly what they were doing, but as the schemes evolved and got more sophisticated, and more people were drawn into them, there was a long tail of people who were acting in good faith, and theirs are many of the cases that we have heard today. Although we keep the principle that ultimate responsibility lies with those individuals, it is important that we do the right thing in ensuring that tax affairs are straightened.
Several hon. Members rose—
Jim Shannon
Further to the point made by the hon. Member for Bath (Wera Hobhouse), I think of those who were unknowingly brought into the scheme by their employers and then found themselves with a financial burden that they were not aware of. I am reminded of the TV programme about the Post Office Horizon scandal, in which the terminology “the little people” was used. With the greatest of respect, these people are “the little people”—people who accept the systems that are put down before them. There must be a way to help them.
Nigel Huddleston
I completely understand where the hon. Gentleman is coming from in relation to going after employers that have been deceptive. The loan charge ensures that tax is paid in respect of individuals who entered into the schemes and received payments with no tax deducted, but where possible, HMRC has been seeking that tax from the employer in the first instance. I would like to reassure hon. Members that 80% of the revenue collected to date has come from employers, so we are targeting the employers, as he rightly points out.
Several hon. Members rose—
Nigel Huddleston
I will take a couple more interventions, but I fear that colleagues will ask about the very things I am about to come to, so I may then resist further interventions.
Sir Jacob Rees-Mogg
My hon. Friend refers to the 2017 Supreme Court judgment. As I understand it, that judgment decided that responsibility for the use of an employee benefit trust for tax fell unequivocally on the employer, so it does not necessarily support him in the way he may think.
Nigel Huddleston
There has been debate and disagreement on that, particularly as it relates to section 44 of the Income Tax (Earnings and Pensions) Act 2003 and so on. HMRC has outlined the policy stance on this. Although I understand that there is disagreement, the line is quite clear at the moment.
Andrew Bridgen
I agree with the Minister that there is responsibility on all individuals to ensure that their tax affairs are in order and the correct tax is paid, but what will he tell the House about HMRC’s responsibility to make the public aware that certain schemes may be seen as tax evasion and therefore do not qualify for tax relief?
Nigel Huddleston
That is another important point to which I will come in a moment. I will now make some progress before I take further interventions, because I fear that otherwise I may ruin my responses.
As I said, the way in which we recover tax owed is important, including the interactions that individuals have with key bodies such as HMRC. The Government recognise that there were areas where the impact of the original loan charge was disproportionate to its aims. We have listened to concerns raised by hon. Members in the years since the loan charge was announced, and I have had conversations with HMRC about how it has, for example, endeavoured to improve the tone of communication with impacted individuals.
Changes in approach were also made following Lord Morse’s review, about which I have heard many comments today. Many people may not be aware, but in September 2019, the Government asked the former Comptroller and Auditor General of the National Audit Office, Lord Morse, to lead an independent review of the loan charge policy and its implementation. Lord Morse had full discretion over how the review was run, who he consulted and the recommendations made. That consultation included the APPG and many of the people in the Chamber today.
Following the review, Lord Morse recommended notable changes to the policy, and the Government accepted 19 of his 20 recommendations. Those changes benefit about 30,000 people and meant that the loan charge would apply only to outstanding loans made on or after 9 December 2010, rather than April 1999. That was the date when the Government announced anti-avoidance legislation that put beyond all doubt that the schemes were taxable—a very important date. The loan charge would also not apply to outstanding loans made in any tax years before 6 April 2016 where a reasonable disclosure of the use of a tax avoidance scheme was made to HMRC, but HMRC did not take action—again, some have made that point today. Taxpayers were also given additional flexibility in the way they pay in line with their individual circumstances, but Lord Morse was clear that the loan charge was necessary and in the public interest, and should remain in force.
Sammy Wilson
Does the Minister accept that HMRC officials helped to service the Morse review, and restricted its grounds and parameters? The original of that review has not been disclosed, and we do not know how it was changed in the meantime. There are great doubts about whether or not the Morse review was ever an independent review, and ever came to conclusions that would have dealt with the issues and the unfairness we have been discussing today.
Madam Deputy Speaker (Dame Rosie Winterton)
Before the Minister replies, I do want to say that I have given him more time than would normally be allocated for a Backbench Business debate. Several colleagues have tried to intervene, but do be aware that we have another important debate to follow. I am sure the Minister will be cognisant of that fact.
Nigel Huddleston
I thank you for that guidance, Madam Deputy Speaker. I will try to proceed through the comments, because I am keen to make a few more points.
The Morse review followed the normal process for such reviews, in terms of the secretariat and support being provided by Government Departments. I have heard the comments made today, but I do not believe a case has been made for another review. I always stand ready to listen, but I think that review stood up quite well. I do not think anybody has impugned the integrity of Lord Morse today, but that review was thorough and significant, and 19 of the recommended changes were implemented. It was a hugely impactful and very thorough review.
Many hon. Members have also made points about tackling promoters, and some individuals facing the loan charge feel rightly aggrieved at the promoters and enablers who facilitated the use of these schemes. Promoters of tax avoidance schemes are parasites on the tax system—let us be in no doubt about that. They cause untold misery to the people they tempt into using those schemes, which almost never deliver the tax savings that were promised. The Government have prioritised tackling promoters of tax avoidance schemes and have given HMRC additional powers to do so, as a result of which many promoters have stopped promoting those types of scheme. One individual involved in the promotion of schemes subject to the loan charge has already been convicted, and others are currently under criminal investigation for offences linked to the loan charge.
Through Finance Acts in 2021 and 2022, the Government also introduced powers that allow HMRC to take action more quickly against promoters. Those include the power to publish details of promoters of tax avoidance schemes and others involved in the implementation of such schemes. In 2022, for example, HMRC issued a penalty of £1 million to a promoter of disguised remuneration schemes, and provisions included in the Finance Bill currently progressing through this House will make it a criminal offence to promote tax avoidance schemes after HMRC has issued a stop notice under the promoters of tax avoidance schemes rules. I am very pleased to say that those measures are receiving support from all parties.
The Government also consulted last summer on measures to address non-compliance in the umbrella company market—again, many hon. Members have commented on that market today—including tackling the types of schemes we have discussed. We will respond to that consultation in due course, but I can let hon. Members know that I and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), the Minister for small business at the Department for Business and Trade, are already discussing what the next steps should be. In the meantime, HMRC will continue to use its full range of civil and criminal powers to disrupt the operations of promoters.
Madam Deputy Speaker (Dame Rosie Winterton)
I really am getting anxious—we do need to move on very quickly. I call Neale Hanvey, if he can be brief.
Neale Hanvey
I will be very brief, Madam Deputy Speaker. One of the key problems we have is the inflationary costs that are added to the loan charges. Will the Minister at least commit to look at those costs that are added on to the taxable sums?
Nigel Huddleston
The hon. Member will be aware that I cannot pre-empt the conclusions of the consultation or our response to it, but I hear his point.
Many Members have raised the personal and emotional impact of the loan charge on their constituents. This is something that I, the Government and HMRC do take very seriously. We recognise the distress that loan scheme users may feel when faced with large tax bills on their earnings, often many years after the event, which the scheme promoters wrongly told them they would be able to avoid. We are aware that some people who faced the loan charge have, very sadly, taken their own lives or harmed themselves. HMRC has made 10 referrals to the Independent Office for Police Conduct where a person has taken their own life, and following each referral, HMRC has conducted an internal investigation. Nine of the 10 investigations have concluded, and although no misconduct was found, HMRC is taking forward organisational learning from these matters to further strengthen the support provided in identifying individuals who need extra help. I completely understand the points raised by hon. Members and, indeed, I have myself heard about the emotional distress from individuals impacted by the loan charge. Colleagues have also commented on the nature and tone of interactions with HMRC in the past. Again, I have raised this with HMRC officials, and I will continue to make the point that they should adopt a more understanding tone.
Other points of clarification were raised by hon. Members, and I will endeavour to write to them because there were a few factual inaccuracies. For example, there is an appeals process—it is very important to make that point—and this is not an area in which criminal convictions are acted against the individuals. I will write to hon. Members because there is a lot to debate in this area, but it is very important to make sure that we do not scare people. For example, we must make it clear that there is an appeal process, and there is of course no cost for the appeal process. There are also other matters that I would like to make hon. Members aware of.
I am aware of the timing, Madam Deputy Speaker, and thank you very much for your patience during what has obviously been a very emotive debate today. Finally, I make an appeal. I would encourage those who still have disguised remuneration or loan charge liabilities to engage with HMRC. Thousands of people are still not engaging with it and are therefore not able to seek clarity or the support and guidance available, including emotional support, help from the Samaritans and other measures that HMRC has in place to identify and support vulnerable individuals. I repeat my thanks to hon. Members for their engagement, and I welcome continued engagement, including with the APPG and all MPs who have raised this topic with me on behalf of their constituents.
Madam Deputy Speaker (Dame Rosie Winterton)
I call Sammy Wilson, who has one minute to wind up.
Sammy Wilson
Since time is short, I will not go through all the speeches, but I thank Members for taking part and for the powerful speeches they have made. There are two points that I will take away. First, there is the frustration, fear and powerlessness that many of our constituents feel in the face of oppressive Government bureaucracy, and the pursuit of those individuals by people who are not and currently cannot properly be held to account. Secondly, to repeat what the right hon. Member for Hayes and Harlington (John McDonnell) said, I hope that we will not be sitting here in four years’ time finding out that, although we had this debate, we heard platitudes from the Minister and there was no action. I do not want to take part in a debate similar to the one we have taken part in today. I think it is the duty of the Minister and the duty of Parliament to hold those who have this power to account and to make sure that it does not continue to be abused.
Question put and agreed to.
Resolved,
That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes; further notes that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of HM Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the Government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act.
High Speed 2 Compensation
(3 months, 3 weeks ago)
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Theo Clarke (Stafford) (Con)
I beg to move,
That this House calls on the Government to provide compensation to people who have been affected by the construction of HS2.
I have called this debate on High Speed 2 compensation as I am concerned about how my constituents in Stafford are still being treated by HS2 Ltd, and I wish to raise their serious complaints directly with the Rail Minister and to hear what he is going to do to address them.
Since the Prime Minister made the decision to cancel phase 2 of the HS2 rail project from Birmingham to Manchester, many people, including constituents of mine, have been left in limbo, with no information about what is happening with their properties or land. This issue affects numerous constituencies and I thank the many colleagues from across the House who are here to support this important debate today, including many neighbours in Staffordshire such as my hon. Friend the Member for Lichfield (Michael Fabricant), my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson) and my hon. Friend the Member for Stone (Sir William Cash).
Today I am calling for all outstanding HS2 compensation claims to be resolved. I will set out a number of examples in my constituency that demonstrate that the issue of HS2 compensation is still a long way from being concluded and must be dealt with by the Government. Let me start by thanking the constituents who have contacted me, sharing their stories and highlighting how HS2 is deeply affecting them. Several other constituents who previously asked me to raise their case have now asked me not to mention them by name today. I am outraged to discover they have been intimidated by HS2 to do this. In one surgery appointment I was told that a constituent was told, “It would not be good for you to get your MP involved, as that would be bad for your case.” This is completely unacceptable behaviour by HS2 Ltd and I want to call it out today.
Jim Shannon (Strangford) (DUP)
I declare an interest, not in this case but as a farmer because I understand that HS2 has been contacted by some in the National Farmers Union on this matter. Does the hon. Member agree that to demand land from farmers and not to compensate them quickly and effectively can never be acceptable, and that if a farmer can show loss of earnings, they should receive compensation for that? I understand they currently do not.
Theo Clarke
The hon. Member is absolutely right, and if he bears with me, I will specifically come on to compensation to farmers and the points the NFU has raised.
Andrew Bridgen (North West Leicestershire) (Ind)
Will the hon. Member give way?
Theo Clarke
Let me make some progress and I will give way in a few minutes.
I want all those seeking compensation to know that they have not been forgotten. I am speaking up for them all today, to ensure their views are heard at the highest levels of Government. Since being elected as the Member for Stafford, I have raised the issue of HS2 compensation six times in this House—six times—and I have still not had all of my outstanding local claims resolved. That is not acceptable when HS2’s behaviour towards my residents has been shocking. In addition, I have contacted numerous relevant Ministers and spent hundreds of hours working on the issue, visiting affected constituents and advocating for them.
My first piece of casework as a new MP involved a constituent who experienced the most awful mental health crisis because of the stress of the compensation process. I thank my right hon. Friend the Member for Pendle (Andrew Stephenson), who as a Rail Minister worked constructively with me on that case. I appreciate, too, that the new Minister, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), has also met me recently to discuss these issues.
When the Prime Minister announced back in October last year that the phase 2 of HS2 north of Birmingham would be cancelled, I welcomed it as I have long believed that HS2 is a folly. In November the Prime Minister stated that
“we are committed to fair treatment for people affected by the changes”.—[Official Report, 15 November 2023; Vol. 740, c. 642.]
While I applaud the Prime Minister’s sentiments, there should absolutely be fair treatment for all those affected by the changes, so today I ask the Minister to ensure that HS2 Ltd pays compensation fairly. That is the crucial question made even more pressing in light of the Secretary of State’s comments back in November when he said he thinks that those affected by HS2
“have been properly compensated according to the law”.
I am sorry to say that that is not the case. I will go into more detail about why there has not been proper compensation in several instances.
When the HS2 route was announced over a decade ago, the value of property and land along the route immediately dropped. The land and properties had become blighted, and we had to set up a very complex compensation system. Those going through the process were advised to hire private agents to assist them through the negotiating process, but I have heard from numerous people that the complexity of the process has meant that they were offered far smaller sums in compensation than the property was worth because of HS2. This process is not only complex but also extremely slow and I am now being told those living along the cancelled phase 2 route who wish to repurchase their property are doing so at a far higher price. This is clearly unacceptable. Why on earth should we be penalising residents who have already been forced to sell their property and land due to the Government building a railway line through their homes?
Michael Fabricant (Lichfield) (Con)
I have a constituent called Siân Froggatt, and she had a compulsory purchase order made against part of her farm, involving land that is the only way she can access her farm. Three times she has petitioned HS2 to buy it back, but it says no, and the land will now go on to the open market. How can that be right—I hope the Minister will address this—when the railway line will not even be going alongside? She is willing to pay back the money for her land that was compulsorily taken off her.
Theo Clarke
My hon. Friend makes an extremely important point, and I agree with everything he said. I will give an example from a constituent of mine in a similar situation. Andrew Collier is a farmer in Stafford farming 650 acres. HS2 purchased just over half his land, and some of that land was earmarked for utilities. The land was taken before harvest time, and he asked HS2 Ltd for permission to harvest his crop. HS2 said it would allow him to do that, so the crop was harvested, but then HS2 Ltd gave the crop to someone else and did not pay him for it. Mr Collier applied for compensation, hoping that it would swiftly arrive. Of course, that did not happen.
Instead, Mr Collier waited for two and a half years for HS2 to compensate him. I emphasise that to the Minister. Even now, he is still owed hundreds of thousands of pounds to cover two years of lost harvests and other outstanding claims. He tells me that two members of his family who worked on the farm have now had to leave, because the remaining farmland is too little for them to work on. Due to the compulsory purchase of his land and the long delays in receiving compensation, he told me in his surgery appointment that his farm is now no longer financially viable. Compounding those issues, his sacrifice is now seemingly in vain, because HS2 phase 2 has been cancelled and the land is lying fallow.
That example is why this debate today is so important for raising this issue. There is a fundamental lack of transparency and fairness in this entire process, and I believe it is causing real harm to my constituents. How HS2 Ltd deals with compensation appears to be completely divorced from practical realities on the ground.
Another example is a local golf club, the course of which is in the middle of the countryside in my constituency. Club members were devastated when they heard that the HS2 route would cut straight through the middle of it. What is to happen now? Similarly, my constituents Jean and Trevor Tabernor own a farm. HS2’s route meant that their farm would be spared, but their farmhouse was demolished. Their new farmhouse is nearly completed, and they have been seeking the last instalment of money to finish the work. As we all would expect, that needs to be finalised as soon as possible so that they can complete the construction of their home. However, they are facing delays, and now that the line has been cancelled, HS2 is trying to place restrictive clauses on them “in perpetuity”, just for my constituents to receive what they are owed. Those clauses are clearly so that HS2 can maximise the value of its assets. HS2 Ltd is literally the only thing standing between them and their new home. Again, I ask the Minister: what will happen to resolve that? It is affecting people’s lives and we simply cannot wait any longer for an answer.
I turn to businesses affected and, in particular, how unsuitable the compensation process is for farmers. In our recent meeting, my hon. Friend the Minister recognised that there are specific issues relating to farmers. I note that in his response to my hon. Friend the Member for Buckingham (Greg Smith), he publicly stated that
“of the land that HS2 has, about 81% has been let back out to be able to be utilised…I want to make sure that we can better understand from the farming community what can be done with the land that is no longer needed”.
I thank the Minister for those words. I know he has met the National Farmers Union, as indeed have I in Staffordshire, and others to better understand these issues.
The point that I wish to make is that if unused land is not preserved in its state on the day before farming ended, it will start slowly to deteriorate. For cropland in particular, that means that the land being returned to farmers will have to be rehabilitated, currently at the farmer’s expense. When we consider farmland, it is clear that the compensation process is causing major financial issues by depriving farmers of the land that they farm and their ability to forward plan.
I also have examples of constituents who had not yet reached an agreement with HS2 Ltd when the Prime Minister made his announcement. May I ask the Government not to forget about those residents, who also need to have their compensation resolved?
On how HS2 Ltd proposes to dispose of phase 2 land, following the cancellation of phase 2 it has consistently told residents and business owners that it must act to ensure value for money for taxpayers. As a Conservative, I support that in principle, but value for money in this context appears to mean short-changing those from whom it has purchased land and property. The issue with the proposal is simple: HS2 Ltd is focusing purely on ensuring that it receives the highest price for the land and the properties it has compulsorily purchased, but there appears to have been little thought given to those whose lands have been taken off them and wish to have them back. The NFU has highlighted the issue and is calling for a simpler and cheaper process for returning land; I very much support that.
As part of the process, most property and landowners who had their land compulsorily purchased will be offered the right of first refusal under the Crichel Down rules. However, the value of the lands now will naturally be higher than when it was blighted, and they will also be higher because land and property prices have increased in general. Farmers in particular, and all those affected, tell me that they are having to buy back their own land at a far higher cost. That is unfair. I would like the Minister to look at that again. If the right to first refusal is not taken, what will happen to that land and property? Someone will purchase it and, particularly with farmland, there is an additional danger that developers and land bankers might be keen to buy it, which would completely transform the make-up of former rural communities.
There has been a serious lack of transparency from HS2 throughout all this. I was shocked to read recently that the chief executive of HS2 Ltd revealed that the cost of phase 1 has already increased by £10 billion to £66.6 billion—what a horrific waste of taxpayer money.
Finally, I raise the importance of the Handsacre link, which would bring HS2-compatible trains to Stafford. It was advertised as the reward for the people of Stafford for enduring so many years of issues associated with the project. It would ensure that phase 1 is completed, and a lot of the works required to construct it are under way. I raised the rail link previously, in April last year, when I was assured by the Secretary of State for Transport that the works would continue to progress, but I hear rumours that it is to be cancelled. That would be not only a betrayal of my constituents and a waste of the time and resources put into the construction that has already been completed, but—this is a key point—a breach of the legislation that specifies that it must be built. Will the Minister reassure my constituents that the Handsacre rail link will be completed?
This debate is important because my constituents are still living in uncertainty. The processes surrounding HS2 compensation are flawed, and HS2 Ltd continues to behave disgracefully. Finally, may I invite my hon. Friend the Minister to visit me in Stafford to talk directly to my constituents and see at first hand how the delays and the lack of fair payments is affecting them, and ask him to commit today to doing something about that? HS2 compensation must finally be resolved.
Sarah Green (Chesham and Amersham) (LD)
I thank the hon. Member for Stafford (Theo Clarke) for securing this debate.
As Members may know, parts of my constituency lie directly above the HS2 tunnels in the Chiltern hills, where the tunnel boring machines are due to surface. Particularly affected have been those living near the five vent shafts near Chalfont St Peter, Chalfont St Giles, Amersham, Chesham Road and Little Missenden. For some, the impact has been so severe that they have felt unable to continue living in their homes. Decisions to move are never taken lightly, and they have invariably brought them into contact with HS2’s various compensation schemes.
I wish to focus on the experiences of constituents with one particular scheme: the special circumstances or atypical properties scheme. The scheme was set up in recognition that some residents and businesses near the HS2 route may need assistance, despite not meeting the eligibility requirements of other schemes. The first case I shall share is that of a constituent who lived in close proximity to one of the vent shafts. They experienced the construction of a haul road immediately outside their property. Where once there had been a country lane used largely by local residents, now there was a large road with HGV traffic travelling up it night and day. In addition, a 3-metre high embankment was constructed immediately in front of their house, ruining their view, their privacy and the value of their property.
Faced with at least another year of construction work and the permanent blighting of their property, my constituents reluctantly decided to seek compensation from HS2, which would allow them to move. They had this to say about their experience:
“Dealing with HS2 and its contract partners has been a nightmare. They will not properly engage regarding compensation and on other matters they continually delay answering questions, provide incorrect and contradictory information, change their plans without proper notice or consultation and have no regard for the wellbeing of the community.
They block all attempts at proper dialogue, ignore questions and hand matters to different teams to delay things further. If we complain we might get a half-hearted apology for the time taken to respond at all, but nothing changes.”
Thankfully, after much stress and inconvenience, the Government eventually bought my constituent’s property at unblighted value, under the special circumstances or atypical properties scheme. But it should never have been that hard. The delays, contradictory information, changing of plans at short notice and half-hearted apologies led to unnecessary delay, distress and upset. It did not have to be that way.
The second case I shall briefly share involves constituents who moved to their home in 2007—two years before HS2 was announced. Where previously the enjoyed starlit nights, they now faced floodlights on at all hours. The disturbance and upheaval took a toll on my constituent’s mental health, resulting in their making the difficult decision to sell their home. HS2 initially sought to steer the couple towards the need to sell scheme, which would have forced them to sell their property at market value rather than the considerably higher unblighted value.
After much wrangling, including intervention from my office, HS2 agreed to consider the couple as an atypical case. Part of the problem was that there is no formal application process. The process is opaque. Unfortunately, HS2 agreeing to consider my constituents as an atypical case was in many ways just the beginning. The couple emphasised how degrading the process to finally being accepted was. Despite providing GP and support worker details to HS2 more than once, they continued to receive repeated requests for ever more information, with each request bringing up renewed worry and stress.
Both the cases I have referenced today eventually resulted in the individuals being accepted to the special circumstances or atypical properties scheme, but the process to get there was protracted, stressful and awful. That is what I want to highlight. The schemes need to be administered swiftly, fairly and with compassion. I sincerely hope that the Minister will reflect on those experiences, and that lessons can be learned to ensure that those affected can get a speedy resolution and are treated with the dignity and respect they deserve.
Sir Gavin Williamson (South Staffordshire) (Con)
I congratulate my hon. Friend the Member for Stafford (Theo Clarke) on securing the debate. We have already heard from the first two speakers how people’s lives have been impacted by this scheme. Many of us, right across Staffordshire, were delighted when we heard the news back in October that the Prime Minister had taken the right decision in cancelling phase 2 of HS2. Many of us had been campaigning for that and we were so delighted to hear the news.
HS2 had already spent £208 million on the purchase of land for phase 2a alone, and that was even before the major construction work was to start. There was a hope and a belief that the land that had been purchased would be returned to the owners and it would all be resolved incredibly quickly. I am afraid to say, however, that even though the announcement was made in October, there remains an enormous amount of uncertainty, an enormous amount of concern and a total lack of clarity for many people who are impacted by the scheme.
As the new year begins, we need clarity on when land will be returned. We need to have an understanding of when the selling of land by HS2 is to start. We need to have an understanding about those people who have had their homes taken from them. When will they be in a position to buy back their homes? When will they be in a position to know what the rules are and what their future may hold?
I appreciate that the Minister has, just today, lifted the safeguarding on phase 2a. I think all of us very much welcome that, but it still leaves many questions that need urgent clarity. I understand that the Department for Transport has said that the return of land will
“take time because the Department for Transport needs to make sure the programme provides value for money for taxpayers and does not disrupt local property markets”.
It also says:
“there remains a significant amount of work to do”.
I am sure there is a significant amount of work to do, but there has been a considerable period of time to do that work, and people’s lives are on hold and their nerves have been frayed. Many people just do not know what their future holds. They cannot move on until the Minister and HS2 give them the certainty and the clarity that is required.
I want to touch on a couple of examples that have been sent to me. There is, sadly, a lot of fear among many Staffordshire residents about how HS2 acts. It acts sometimes in quite an imperious manner, without necessarily the care, consideration or consistency that one would hope for from a Government-owned organisation.
One example relates to a farming business. Temporary possession started in 2022, with HS2 taking around 3 acres for environmental mitigation. The family objected to the land being taken on a temporary basis, as they did not want to be responsible for the future maintenance of all the things that were being put on it. Further grazing land of approximately 100 acres was taken under temporary possession in January 2023. A proportion of that land was purchased in July 2023. Meanwhile, preparation for the diversion of a high-pressure gas main began in March 2023. Fencing was erected, hundreds of metres of hedges were ripped out and a compound was built, before work was halted in May 2023. Following the announcement of phase 2a’s cancellation, the family expected the compulsory purchase order to be cancelled and the land to be returned. However, further land was purchased in November 2023. Last time I checked, November definitely came after October, so that was after the Prime Minister announced that the scheme was not continuing.
What are the impacts on these farmers? They are considerable, because HS2 has a very different understanding of the concept of the purchase of land. If any of us in this place, or any of our constituents, wants to purchase land, usually we enter into an agreement, then we pay money, and after we have paid the money, we may get the land. It works very differently for HS2. It can purchase land and never pay for the land. Those affected then have the problem of having to work around HS2, which will never actually build anything on the land.
Here we have a business, a farm, with a 400-cow dairy unit. Because of all the infrastructure changes that HS2 has made, such as removing access to parts of the grazing area, it is difficult for the farmers to move livestock around. It is difficult for them to gain access to land for which they have never been paid, or of which HS2 has taken temporary possession. All this is creating an additional workload, and they have not been compensated and are not clear about when that will happen.
Another example is a small nursery business whose owners depend on people knowing where it is. HS2, which has placed a charge on the land through the Land Registry, will not allow them to cut the hedges that it now owns but has never paid for, but it is willing to charge them, at an incredibly high rate, for the freedom to cut the hedges so that people know where their business is.
This is not the way in which we expect a Government-owned company—a company owned not by some multi- national, but by the Secretary of State for Transport—to be able to proceed. I wonder whether, if I pass on the contact details of those two businesses and other detailed information, the Minister will ensure that their cases are examined closely and that a resolution is found.
So many messages have been sent to me about the manner in which HS2 has conducted itself—about the delays that people have had to suffer, about the uncertainty, and about people having to put their hands in their own pockets and spend tens of thousands of pounds on land agents and consultants to try to get some money back from HS2, but still not receiving anything. So many people have had land taken from them—land that they no longer own, but for which they have never received a single penny.
We need to have clarity. We cannot wait months and months more. I hope that the Minister, who I know is a diligent and caring Minister, will give that clarity today, or, at the very minimum, give a clear timeline for when everyone who has been impacted by HS2 will know the rules by which it is playing, and ensure that there is fairness for the people in Staffordshire who have been affected.
Andrew Bridgen (North West Leicestershire) (Ind)
I commend the hon. Member for Stafford (Theo Clarke) for securing this debate.
The motion states:
“That this House calls on the Government to provide compensation to people who have been affected by the construction of HS2.”
I take a bit of exception to the word “construction”. There has been a great deal of cost and a great deal of injury, especially for the taxpayer. In my constituency, 22 miles of which have been affected by blight for more than a decade, there is certainly plenty of injury and need for compensation, but there has never been any actual construction.
As the House knows, HS2—the second project of the high-speed rail system—was initiated by the Labour Government before the 2010 election. I think it was Lord Adonis’s little pet project, which he formulated on the back of a fag packet as a gimmick for the Labour manifesto, but unfortunately George Osborne picked it up and ran with it.
Michael Fabricant
Did the hon. Gentleman know that before Lord Adonis got his grubby hands on it, a design for HS2 was made by Arup? HS2 would have connected with HS1, and would have gone into major transport hubs such as Birmingham New Street and Manchester Piccadilly. It would have been possible to travel directly from Manchester Piccadilly to France without any changes at all, and do you know what? It would have been cheaper as well, because there would have been no tunnelling through the Chilterns.
Andrew Bridgen
If we were to debate the many failings of HS2, we would need more than the time available today. That will be for another debate, and I have no doubt that the Government have learned lessons, as they always do, but they will have been very expensive lessons for the taxpayer. HS2 is the white elephant that got ever bigger on taxpayers’ money. I opposed the project before it even started. I voted and spoke against it at every opportunity for a decade, but the elephant got ever larger.
My constituents let out a collective sigh of relief when phase 2b was finally dispatched. Today’s debate is about compensation, which is defined as an award, normally money, paid in recognition of loss, suffering and injury. Although my constituency did not see any HS2 construction, we certainly had plenty of loss, suffering and injury. We had 10 years of blight, with an area the width of two football fields, running the whole length of the constituency—22 miles—being sterilised.
Countless houses were never built and at least one factory, at the Lounge coal washing site, had to be cancelled—that factory would have created 1,200 jobs. We have had this blight for 10 years. My constituency is fortunate to have the highest economic growth in the country, but that economic growth and prosperity would have been far greater without the blighted land running through the middle of the constituency for more than 10 years.
What compensation can the Minister offer my constituents? Some of them went to their grave, and the biggest worry in their life was that HS2 was supposed to be going through their back garden. I reassured them that it was never going to happen. Despite all the bull and bluster from the Government, it was always going to run out of money. When the route was announced in 2013, I said it was going to end up costing over £100 billion —it is in Hansard—and the House laughed. It was right to laugh, because it was not £100 billion, was it? It was £160 billion at its peak.
The hon. Member for Lichfield (Michael Fabricant) is right that the project was supposed to move people seamlessly around the country. As the Government could never afford to get HS2 into city centres because of its burgeoning costs, they quickly ended up aiming to move people from nearly London to nearly Birmingham. If phase 2 had proceeded, it would have gone to nearly Manchester. I do not know anyone who wants to go from nearly London to nearly Birmingham, but the project had to continue.
HS2 has blighted my North West Leicestershire constituency, but I want to talk about one community in particular. The village of Measham was the most affected settlement on the planned route. Nowhere south of Measham had the number of houses and businesses that would have been disrupted, without any mitigation. Knowing it is one of the most deprived communities in my constituency, we had a regeneration plan to work with a fantastic company called Measham Land, through which 450 desirable new houses were going to be built on wasteland in the middle of the village. Working with the Ashby Canal Trust, it was going to fund regeneration projects, including two aqueducts, to bring the canal back to Measham, with a café culture around a large basin at the end of the canal system where people could bring their longboats. There was going to be huge investment in the village until HS2 was announced.
The route went straight through the middle of the Measham Land site. The regeneration of Measham has been delayed for 10 years. The people of Measham have suffered loss and injury, but where is the compensation? Okay, the regeneration will now go ahead, but it is 10 years late. The project would have been completed by now. We have seen that all along the route, not just in my constituency.
Who else has been injured? I will declare an interest: I am probably the only Member of Parliament who had to sell their house to HS2—a house that I bought in 2011. It was a substantial Georgian rectory with outbuildings and 14 acres of grounds, and I was forced by a judge to sell it under the extreme hardship scheme. I sold it in 2015 to HS2. Being a Member of Parliament, I thought, “I can’t deal with HS2 myself, so I’ll employ some consultants to deal with it, so that it’s an arm’s length transaction.” They charged me £25,000. It took 18 months, and I went through the system. I explained to the Government afterwards how HS2 has swindled everybody along the line with its property prices, and I will explain to the House how it is done.
It appears to be a transparently fair system, but I can assure hon. and right hon. Members that it most certainly is not, given the psychology behind it. Everybody along the whole route is presented with the same options. If HS2 wants to buy a property or someone has to sell their property—whether it is land, a factory or a dwelling—for various reasons, they will be offered a list of 10 valuers by HS2. The valuers will be mainly London estate agents, of whom the seller will have no knowledge. They may know the names—some of the very big estate agencies are on the list of 10 valuers—but it will be dealt with by the London offices, with which people in the midlands or the north are unlikely to have ever had any contact. They will be asked to choose one of the valuers to value their property, and HS2 will choose another, which sounds pretty transparently fair. They will both come to the property, land or factory to do an valuation. If the valuations are within 10% of each other, HS2 will say, “Let’s split the difference and call that the valuation.”
On paper, that sounds very fair, but think about the psychology of it. Those 10 valuers are the valuers for the whole route. They will only ever work for an individual who chooses them at random, because no seller has any knowledge of them whatsoever—it is a purely random choice. By choosing a valuer, someone has done all they can for them; the valuer will get paid their fee from HS2 for doing the valuation. But what the valuers on the list all want to be is the valuer that gets chosen every time by HS2. Given the pressure from the burgeoning costs of the project and the evidence given by whistleblowers who have left the land procurement side of HS2, which of the valuers do hon. and right hon. Members think HS2 will choose on the next occasion: the valuer who puts in the highest price to buy my house and land from me, or the valuer who puts in the lowest price for my property and land? The fact is that the system used by HS2 was always going to drive down the land and property prices paid to those affected by the route, and it is provable that that is exactly what it did.
There have been two notable whistleblowers who have left HS2, and I have spoken to both of them over the years. A former director of HS2, Doug Thornton, was put in charge of planning and performance. He was later put in charge of a £2.8 billion project to acquire all the land and properties that were needed along parts of the route. He went back to HS2 and said, “£2.8 billion is not enough. You can’t make a budget and just say we’re going to buy all the land and buildings for £2.8 billion.” He said it was nearer £4.8 billion, but he was told that he had to buy them for that price. Does that sound like HS2 was ever paying a fair price for the properties it needed to acquire along the route?
I have also recently spoken to Andrew Bruce, who was in charge of buying land and properties for HS2 until 2016. He had told his superiors that they had never paid a fair market price for any of the land and buildings that he bought while he was there, and he was asked to shred a report that he had done on that.
The two whistleblowers suffered loss and injury as well, because I am told that they were unable to get another job in the industry after they whistleblew on the practices that they experienced in HS2. They might need some compensation as well. We should protect whistleblowers, because without them we would still have a continuation of the Horizon/Post Office scandal. I maintain that individuals and communities have been damaged by HS2, and I would be interested to know what compensation the village of Measham will get, and what we are going to do for every householder and landowner along that route, who I can prove did not get the right price.
The Minister has promised me a meeting twice in the last two months, and I still do not have a date for it. I really hope that he will come through for me. I hope that lessons have been learned by HS2 and the Government. It has been a week of scandals— Horizon/Post Office, the loan charge, HS2—and the Government have not covered themselves in glory.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Three Members, plus the Front Benchers, still wish to speak. The debate has to end at 5 o’clock. I urge brevity upon colleagues.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
I congratulate my hon. Friend the Member for Stafford (Theo Clarke) on securing this important debate and advocating for her constituents. As my remarks will show, I am considering the topic from a slightly different but equally important angle. I am here to press the Government to compensate Crewe in the light of the cancellation of HS2 from Birmingham to Crewe, and then on from Crewe to Manchester. I hope that the House will indulge me: for medical reasons I was not on the estate when we returned from recess following the announcement by the Prime Minister regarding HS2. I made my opposition to the decision clear at the time, but the decision has now been made, so I will not spend time rehearsing the arguments. I recognise that I would be heavily outnumbered today on that front.
I will, however, place on the record the disappointment of my constituents and local businesses. The arrival of HS2 to Crewe represented a fantastic opportunity for the town to secure economic growth and improve connectivity on both inter-city and other rail travel. Crewe has a positive future regardless, but there is no denying the super-charging effect that HS2 coming to Crewe would have had. I must reluctantly accept the Government’s decision, and recognise that other proposals can now move forward as a result. As part of Network North, we will see increased funding for most existing major road network and large local major road schemes. Those schemes can benefit from an uplift in Government contributions from 85% to 100% of their cost, and increased funding will help to ensure the delivery of the schemes. It will also lead to over £700 million to fund a new wave of bus service improvement plans in the north, and an extra £3.3 billion to tackle potholes as part of a road resurfacing scheme.
There is no doubt, however, that as things stand Crewe has not been fairly compensated in the light of the changed plans. Those in local government in Cheshire, and in Cheshire East in particular, were encouraged to engage with and prepare for HS2’s arrival. Had they not, I am sure they would have been subject to extraordinary pressure from central Government to do just that. Regeneration funding given to the town and, in particular, our town deal were calculated with a clear understanding that this other form of central Government investment was happening. Cheshire East reports that it spent over £11 million in preparing for HS2 and the Crewe hub. That includes £8.6 million in the capital programme and £2.6 million of direct revenue expenditure.
While it is not for me to decide the wisdom of all that expenditure line by line, it was a significant amount of money, predicated on repeated long-term commitments from central Government. That investment was due to realise regeneration in Crewe that it will not now achieve. That money could have been spent directly in Crewe in other ways that did secure regeneration. Of course we can expect our share of the reallocated bus and road funding, but that is just the share that we would have expected to get if HS2 was never coming to Crewe. A decision has been taken, which the Government argue a wider region will benefit from, but the Government need to recognise the financial impact on Crewe and step up to the plate.
I do not accept that Cheshire East can blame the decision for all its financial woes—that is obvious political manoeuvring—and it is important that the lion’s share of any funding goes to Crewe and is not used just to fill the financial problems facing the wider council, but I do accept that the Government must compensate us locally for the implications of their decision.
We have a lot of positive things to talk about in Crewe. As I mentioned, our town deal is funding a £22.9 million package of projects, including a community centre in the regenerated and reopened Flag Lane Baths, a brand new home for the south Cheshire amateur boxing club, a new youth club, improved pocket parks, investment in empty shops and more. We also have £14 million from the future high streets fund. However, the economic value, both direct and associated, with being an HS2 hub station was of significant scale and the return on bus and road funding will see a shortfall that I press the Government to look at.
We know a number of sites got significantly bigger town deals and levelling-up funding has been made available to other places on a bigger scale. That was not unreasonable in the context of HS2 coming to Crewe, but now it is not. I know the rail Minister is only one part of the puzzle, but I hope there is recognition across Government that movement is needed. Will the Minister confirm the Government’s commitment to coming forward with proposals to compensate Crewe, over and above the money all areas are receiving based on the decision taken on HS2 and that we expect to receive? When will that funding be made available and how?
When the dust has settled, the Government should be able to demonstrate clearly that the impact on Crewe has been recognised not just with words but with a clear investment of funding. That is the fair thing to do. I know the Minister recognises the obligation that any reasonable person would see exists and I expect he has been pressing the case, but time is moving on. What we need now are results.
Greg Smith (Buckingham) (Con)
I congratulate my hon. Friend the Member for Stafford (Theo Clarke) on securing this important debate. It gives me the opportunity —I have done this many times before in this Chamber and at the Transport Committee—to continue to detail the plight faced by landowners and small business owners alike who, through no fault of their own, have been swept up in the seemingly endless and needless disruption caused by HS2 Ltd and its contractors in my constituency.
People face losses and hefty legal bills that have left many unprofitable, some facing near bankruptcy and all without the means to recoup their losses in any equitable way. Time and again, I have heard about the inescapable, infinite loop of bureaucracy that surrounds what meagre compensation HS2 Ltd is willing to cough up, which in itself increases and prolongs my constituents’ legal costs. One landowner told me that her land agent is increasingly reluctant to take on more work as more and more of his bills, which under the Act are meant to be compensated by HS2’s own agents Carter Jonas, go unpaid.
A couple in my constituency have been caught up in this legal quagmire, with HS2’s insistence that their septic tank be replaced before the project purchases the property at a predetermined rate. What was supposed to be a relatively straightforward job turned into a multi-month process, preventing my constituents from selling their property at that agreed price, effectively leaving them short-changed, despite them simply following due process. They have yet to be compensated for the difference between the agreed value and the actual value of their property.
In the village Quainton, which in one way or another has been continuously impacted by HS2’s road closures, yet another road closure is about to come into effect, this time for two years. That will devastate my constituents at Doddershall House, whose business will suffer from reduced access to and from the estate, and require a lengthy diversion both for them and their clients. HS2 has not even attempted to offer them compensation.
For our farmers, cattle loss has blighted numerous farms as a result of poor soil treatment and management by HS2’s contractors, often operating right next door. One farm has quoted a total loss of £37,000 as a direct result of HS2’s shoddy practices. How can this possibly be morally justifiable for the project? How can a hardworking family be left with such heavy losses?
Then there is blackleg, a disease in cattle that is caused by bacteria released from disturbed soil. I am aware of at least one case that the farmer has attributed to HS2’s malpractice. It is noteworthy that farmers in this area have never seen a blackleg case before in Buckinghamshire. No prizes, Mr Deputy Speaker, for guessing how much compensation has been offered—for the avoidance of all doubt, it is zero.
It is not just farmers and landowners who suffer from being left out in the cold by HS2. Hundreds of road users across my constituency are forced to sit in endless congestion wherever HS2 decides to cut down a tree, closing whole roads in the process, and there are endless utility diversions. Commuters, buses taking children to school and ambulances responding to life-or-death situations have all had their journeys repeatedly disrupted by HS2, with no recourse to any form of compensation.
Whether it is the A41 through Waddesdon and Fleet Marston, or the villages near Wendover, such as Ellesborough and Butlers Cross, these endless, endless diversions are costing real people real money and real time and, in some cases, lives on a daily basis, and there is no compensation. That is before we even get to the state of Buckinghamshire’s roads, destroyed by thousands of HGV movements linked to HS2 construction, causing endless damage to cars, from tyres to suspension systems. Again, HS2, with its fingers in its ears, does not take any responsibility for what it has broken in Buckinghamshire.
Briefly, I come to businesses, with the example of the Prince of Wales pub in Steeple Claydon, which sits at the heart of HS2 disruption and destruction and is also very near the building of East West Rail. Roads in and out of the village are constantly closed—Addison Road, for example, was closed for many, many months recently. It is costing the pub nigh on £1,000 a month in lost revenue. At one point, the landlord told me that he was £65,000 down. There is no scheme—nothing at all—to compensate businesses affected in this way. Real livelihoods and the real viability of businesses are being challenged. I put that to a former chief executive of HS2 Ltd, Mark Thurston, when he actually bothered to visit my constituency in May, and the language he used about the pub is unrepeatable in this Chamber. There was no sympathy; he just said that it was just a—expletive— “little pub that nobody would want to drink in anyway.” That is not the attitude that we expect from anyone paid by the state.
Just next door in Steeple Claydon is Langston & Tasker, which stands out among the businesses affected by HS2 construction because, as a bus and coach operator, it is hit hard by any road closure. It operates school runs, taking Buckinghamshire children to school daily, yet the constant road closures, the state of the roads and the damage to their vehicles are costing the company considerable amounts of money every single day, which ultimately gets passed on to Buckinghamshire Council and local council tax payers. Does HS2 pay a penny towards it? No, of course not, but it absolutely should.
Mr Deputy Speaker, I could go on with examples like this all afternoon, but I am very aware of the time and the fact that others wish to speak. My message to the Minister, who I know does listen, has visited my constituency and does want to get this right, is that we must do better. HS2 Ltd must do better. The attitude needs to change. The practices need to change. HS2 needs to understand the real lives that it is devastating on a daily basis, be that people who own property or people who are just trying to go about their daily lives—going to work, getting the kids to school, and perhaps having some fun. The people from HS2 need to understand the impact that, as unwelcome aliens in Buckinghamshire, they are having daily as they build this railway. My challenge to the Minister is this: let us get the compensation that real people—my constituents and so many more—deserve.
Michael Fabricant (Lichfield) (Con)
I thank my near neighbour and hon. Friend the Member for Stafford (Theo Clarke) for introducing this debate. We have heard a catalogue of problems from various colleagues here on both sides of the House. The sad thing is that they are not unique. They are repeated up and down the country.
When I was a Whip, I instituted a system—I am looking at my hon. Friend the Member for Rushcliffe (Ruth Edwards), who is the Whip, to see whether this system still operates—where we would look at our Members of Parliament to see how many staff they got through in a short period, because clearly there was a problem if someone could not hold on to their staff for long. We would think that the Minister or Back Bencher in question was seriously flawed in some way. How many chairmen and chief executives has HS2 gone through? It has gone through a lot, because they are flawed in a serious way; they are dysfunctional.
Andrew Bridgen
That is made even more amazing by the fact that they have gone through all these senior staff at HS2, and yet it is the highest paid role in the civil service.
Michael Fabricant
It is extraordinary, and it just demonstrates what an organisation this is—not only dysfunctional, but unfair. In an intervention, I talked about my constituent Siân Froggatt, who is not being allowed to reclaim land that was compulsorily taken from her, even though the land is now not needed because the railway is not going ahead on phase 2a. I might add that she is still waiting to be paid—waiting to be paid, and still unable able to reclaim that land.
I took the opportunity of looking at my cellphone during the debate, not because I was looking at tractors or anything like that, but because I was doing some research about the Crichel Down rules. It says on the Government’s own website that
“The Crichel Down Rules require government departments… to offer back surplus land to the former owner or the former owner’s successors at the current market value.”
It has to be offered back to the same people. Not only is it not being offered back at a reasonable price, but it is often not being offered back to the same people.
I came in at the very last moment to speak in this debate, so I will not take up a great deal of time. I will listen with interest to the Minister’s response, which I suspect might be the same as the answer he gave yesterday in a different debate regarding the Handsacre junction, which happens to be in my constituency. I ask that in these dying days of HS2—dying days in one way or another—the Government get a grip and ensure that, just we asked in the previous debate, justice is done for our constituents. The sense of justice we have in this nation extends not only to His Majesty’s Revenue and Customs, as in the previous debate, but to HS2 Limited in this one.
Mike Kane (Wythenshawe and Sale East) (Lab)
I congratulate the hon. Member for Stafford (Theo Clarke) on securing this important debate and thank the Backbench Business Committee for granting the time. I also thank the right hon. Member for South Staffordshire (Sir Gavin Williamson) and the hon. Members for Chesham and Amersham (Sarah Green), for North West Leicestershire (Andrew Bridgen), for Crewe and Nantwich (Dr Mullan), for Buckingham (Greg Smith) and for Lichfield (Michael Fabricant) for contributing to the debate.
The stories we have heard, and those that have been reported over the years, show the very real consequences of this Tory HS2 fiasco—[Interruption.] There is some muttering from Conservative MPs. If the civil service and the Department for Transport were not involved in the decision to cancel that was announced by the Prime Minister in Manchester—it was done on the back of a fag packet, which has been used today, all day—it is no wonder that we got this type of fiasco.
We have heard of people having to leave the family home that they worked hard for, businesses having to pack up and leave their premises, towns and villages seeing homes targeted after they were bought and later left to rot, and farmers being forced to move or unable to use their land for years because of more and more delays to HS2., We have heard of cash-strapped councils such as Cheshire East Council, which the hon. Member for Crewe and Nantwich told us paid out £11 million. I commend the Labour spokesman Connor Naismith on his campaign to have the council reimbursed for the money lost.
Communities have had their future put on pause for years and families have found getting compensation to be a painful and drawn-out experience. Lives and businesses have been disrupted for a decade, and for what? A staggering £65 billion high-speed train line that will now not even reach the communities that have been impacted—a train line that, according to the chair of HS2, will result in fewer seats and longer journeys for those travelling north of Birmingham. What a result for the people living in those communities and across the north.
All that is even before we consider how much taxpayers’ money has been spent on the compensation. According to reports, almost £423 million has been spent buying up 424 properties on the western leg from Birmingham to Manchester, and £164 million spent buying 530 “blighted” properties on the eastern leg to Leeds. Today comes the news that the Government are lifting safeguarding on the land; not content with cancelling high-speed rail to the north, the Prime Minister has now decided to salt the earth. If we were not aware already, that must be the final nail in the coffin for levelling-up.
Sir Gavin Williamson
Can the hon. Gentleman clarify whether, in the unfortunate and unlikely event of a Labour Government, they would reimpose safeguarding on phase 2a?
Mike Kane
Like Napoleon out of Moscow, it is routed through the poisoned-earth strategy with the lifting of the safeguarding today. We have to be responsible. We will have to see what the books tell us if we are to enter Government in the weeks or months to come.
We have seen 14 years of promises to the north and the midlands broken. In the Prime Minister’s desperate, failing attempt to rebrand himself as the change candidate at the next election, he decided to rush through an alternative plan at the party conference—a plan that mentions places such as Crewe, which, as the hon. Member for Crewe and Nantwich rightly said, would have greatly benefited, but a plan that the Prime Minister admitted was only “illustrative”. Illustrative? The Network North plan announced fantastic news for my Wythenshawe and Sale East constituency—a new Metrolink line to Manchester airport. It opened in 2016. That illustrates the chaos and the confusion of that announcement.
The now Foreign Secretary was not alone on the Conservative side in criticising the decision. Two former Chancellors warned the Prime Minister that his actions were “huge economic self-harm”, while the Tory Mayor of the West Midlands described it as “cancelling the future”—a great line, if I may say so to the hon. Member for Lichfield. In what is a consistent theme for this Government, this whole mess has been created by not consulting the communities affected, not speaking to our Metro Mayors and not listening to the businesses across the country that were depending on the project.
After 14 years, communities have had enough of the broken promises from this broken Government. Labour will not repeat those mistakes—mismanaging major projects, turning people’s lives upside down, taking their trust for granted, impacting their businesses and livelihoods and failing to deliver.
Greg Smith
I am listening carefully to the shadow Minister, who is telling us that a mythical future Labour Government would not disrupt people’s lives. Does he understand that building HS2 does devastate people’s lives? Big infrastructure devastates people’s lives and there is no way to do it without doing that.
Theo Clarke
The hon. Gentleman just said that Labour would do it. Just to be clear, can I confirm that Labour is now saying it will bring back HS2 if it wins the next election?
Mike Kane
I refer to the answer I gave to the right hon. Member for South Staffordshire; that remains our position. Labour has launched an independent expert review of transport infrastructure headed by industry leader Jürgen Maier, originally of Siemens, to learn the lessons from this shambles and to ensure that we deliver transport infrastructure faster and more effectively, so that communities are not taken for a ride with nothing to show for it, as has been the case here.
In this debate we have heard just a few of the many examples of people’s lives being impacted by this Conservative HS2 scandal. It is clear that communities are still paying the price for the delays of the past decade and the chaos of the past few months.
Michael Fabricant
The hon. Gentleman is being very generous in giving way. Would he generously accept that, if it had not been for Lord Adonis changing the original plan, HS2 would have gone nowhere near areas such as the Chilterns? It would have gone up a completely different route and been a connected railway, and would probably have been quite worthwhile.
Mike Kane
I thank the hon. Member for his intervention, but seriously, after 14 years, those types of excuses are wearing extraordinarily thin, if he does not mind my saying so.
I hope the Minister will outline what is being done to address this chaos—costs are still going up after the decision in October—to ensure that those impacted receive the compensation that they deserve, as Members have well underlined, and that the same mistakes are not made again and again in future. I look forward to hearing the Minister’s remarks. Once again, I thank the hon. Member for Stafford for securing the debate and all Members who have participated.
The Minister of State, Department for Transport (Huw Merriman)
I commend my hon. Friend the Member for Stafford (Theo Clarke) for securing this important debate and I acknowledge all contributions from right hon. and hon. Members. I will come to them in the course of my response.
As the House will be aware, the Government laid a written ministerial statement this morning announcing the lifting of safeguarding directions along the former HS2 route between the west midlands and Crewe. By lifting safeguarding, the Government are providing certainty to people along the former route of phase 2a and making development easier, as HS2 Ltd will no longer object to proposed development in the area to which the safeguarding direction had applied.
To be clear, however, the lifting of safeguarding does not in any way trigger the start of a sell-off of property already acquired by the Secretary of State. No land owned by the Secretary of State will be sold off until we are ready. Safeguarding applies to land owned privately. The imposition of safeguarding on phase 2a had hitherto protected HS2 from conflicting development from any private landowner.
Safeguarding has now been lifted from phase 2a, with one notable exception: the continued safeguarding of land close to the village of Handsacre, north of Lichfield in Staffordshire. That junction, which I know is dear to my hon. Friend the Member for Stafford, and indeed to the constituency MP, my hon. Friend the Member for Lichfield (Michael Fabricant), is now an even more critical part of the HS2 infrastructure. It will allow HS2 trains to join the west coast main line through a connection to the existing rail network. I can confirm that the Government remain committed to delivering the Handsacre connection, as we are committed to delivering HS2 phase 1.
From London to the midlands, 140 miles of new railway is being built by thousands of engineers and construction workers at 350 active construction sites. At Euston, we are working with our development partner, Lendlease, to model an ambitious redeveloped Euston quarter and deliver thousands of homes and offices that will provide the financing for HS2 trains into central London. Today’s important announcement is further evidence that we are listening to businesses and residents along the former phase 2a route, and we will continue to do so.
Let me give the further information that my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson) and my hon. Friend the Member for Lichfield requested. We will amend the safeguarding on the remainder of the phase 2 route of HS2—from Crewe to Manchester and from the west midlands to Leeds—by the summer, to allow for any safeguarding needed for Northern Powerhouse Rail. To respond to the point made by my right hon. Friend, we will shortly design a programme for the disposing of any property that is no longer needed by HS2, and will set out more details soon.
I can confirm that any land and property that was acquired for HS2 compulsorily or via statutory blight but is no longer required will be sold, subject to the Crichel Down rules. Those rules, as my hon. Friend the Member for Lichfield set out, require Government Departments, under certain circumstances, to offer back surplus land and property for sale to the former owner, or their successors, at the current market value. I therefore assure my hon. Friend that we are ensuring that property is offered back at a fair price to original owners with first refusal.
Andrew Bridgen
The Minister says that the properties acquired by HS2 that are no longer required will be sold at the current market price, but does he accept that, as I have explained to the House, HS2 did not pay a fair market price at the time of the acquisition of those assets?
Huw Merriman
I am due to meet the hon. Member. He said that I had declined to meet him after two requests; actually, I had a meeting in his diary yesterday, but according to his office he was unable to make that meeting. We have set another date for 31 January. I will talk to the hon. Member about the matters he raises; the Department and the HS2 team have looked at them before and do not agree with the conclusions he has mentioned, but we will discuss those matters when we meet on the 31st.
As has been set out by my hon. Friends and other Members who have spoken, property owners who have found themselves obliged to deal with HS2 Ltd and its contractors have had varied and, at times, inconsistent experiences. Those property owners are understandably less interested in what HS2 can or cannot deliver for transport and the wider economy: their focus has instead been on seeking the compensation they are entitled to, and navigating what must at times have seemed like an unequal relationship with HS2 Ltd.
I readily acknowledge how important it is that those owed compensation, such as money for the purchase of their property or expenses or costs associated with such transactions, are paid in as timely a manner as is possible. I have always sought to impress on the company and its agents that it is unacceptable that cases should drag on. That is of no benefit to anyone—certainly not the property owner, and certainly not the taxpayer.
When it comes to paying owners for title to properties that they have, in many cases, sold unwillingly, it is only right that those owners should receive recompense in full and as fast as is practicable. That said, each property transaction is unique, so presents its own set of circumstances. As many in this House will be aware, when negotiating and settling compensation claims, HS2 Ltd follows the principles set out in the compensation code. There are also a number of discretionary schemes that offer further help to those not eligible under the statutory framework—in effect, they go above and beyond that framework.
HS2 Ltd must achieve a careful balance between meeting the needs of the claimant and delivering value for money to the taxpayer. The compensation code requires claimants to provide robust evidence for their claims. It is often when claimants are struggling to provide sufficient suitable evidence for their claims that negotiations become frustrated, leading to delays. I will be frank: the extent to which claimants’ agents provide suitable evidence, or are willing to negotiate from a realistic standpoint, varies considerably—I have found myself in the middle of some discussions of that type in constituents’ homes. It is important to understand that background, as it helps to explain why, in some instances, property owners consider that they are having payments withheld. When late payments do occur, they are never acceptable, but our data shows that they are the exception rather than the rule.
Property cases should be concluded as soon as is practicable, within the constraints imposed by the balance of the property owner’s interests and those of the taxpayer. The evidence shows—I will happily write to every right hon. and hon. Member who has taken part in this debate—that HS2 Ltd is succeeding in closing down claims, despite the considerable complexities that those claims involve. However, I acknowledge that there are a number of impacted parties with whom HS2 Ltd has not yet been able to reach agreement and negotiations have become challenging, and we have heard about many of them this afternoon. As I mentioned, I have got myself involved in many of those cases to move them further along and challenge HS2 as to the position taken.
My hon. Friend the Member for Stafford is a tireless advocate for the cases that have arisen in her constituency, some of which she and I have previously discussed, as she mentioned. She has cited some particular cases during the debate; I will write back to her with my latest understanding of where matters sit regarding her constituents Mr and Mrs Tabernor and Mr Collier. The same applies to other constituent cases named in this debate by my right hon. Friend the Member for South Staffordshire and others.
With regard to the point about intimidation—I say this as someone who chaired the Transport Select Committee—I believe that everyone should be able to give clear, frank, open and transparent evidence without fear or favour. If there is any evidence of intimidation, I will of course look at it and make sure that it is eradicated. I give everyone in the House that assurance. As my hon. Friend the Member for Buckingham (Greg Smith) has demanded, I am determined that HS2 Ltd should continue to up its game in dealing with difficult and disputed cases, such as the ones that have been mentioned today and others that I am aware of.
Let me touch on a few matters raised by other hon. Members we have heard from but I have not mentioned. The hon. Member for Chesham and Amersham (Sarah Green) referenced a number of cases. I am very happy to meet her, as I have previously. She is a tireless advocate on her constituents’ behalf and I will meet her again to discuss some of those cases. I have touched on the points made by the hon. Member for North West Leicestershire (Andrew Bridgen) and look forward to meeting him and going through the points he made in the debate.
My hon. Friend the Member for Crewe and Nantwich (Dr Mullan) has been a tireless advocate of the benefits that HS2 could deliver to his constituency, and it is the one part of the country that I believe needs particular mention. I spent a morning with him and local Cheshire East councillors looking at the potential and at what the team had brought. It will not have escaped his attention that the local government Minister—the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North Dorset (Simon Hoare)—has entered the Chamber. The two of us spoke earlier this week about the needs of Crewe, and we also spoke to other colleagues. He has been a tireless champion of the council, with the predicament that it finds itself in, and when I and the local government Minister meet the team from Cheshire East, my hon. Friend is certainly welcome to join us. We have made such points to other colleagues, and we are determined to help and to work together. I know that the local government Minister cares about these matters and will work with us to do so.
I say gently to the hon. Member for Wythenshawe and Sale East (Mike Kane)—he is a fellow football player with me, as well as a good friend—that the Labour position appears to keep changing. Just last week, the Leader of the Opposition went to Manchester to say that HS2 would no longer continue, which was slightly inconsistent with what we heard this afternoon. It may well be the case that many dispute the plan we have in place, but the plan is not to go ahead with HS2 north of Handsacre, and instead to spend that money—the £36 billion—on projects across the country, particularly to benefit all cities across the north and the midlands. That is the plan, but I think we would all like to know what Labour’s plan is. Is it going to deliver HS2? If it is not going to deliver HS2 beyond the midlands, is it going to commit to the £36 billion that this Government are committing to levelling up? I think we would all like that clarity, not least the constituents represented by all those sitting behind me.
Huw Merriman
I cannot because of the time—by the look on your face, Mr Deputy Speaker.
Let me end with three final points. First, I thank my hon. Friend the Member for Stafford and all the other Members present for tirelessly working on behalf of those affected by HS2 and for the manner in which they have engaged with me. I am at their service. Secondly, I welcome and accept my hon. Friend’s kind invitation to visit Stafford. I will do so, and before the spring is out. Thirdly, and in conclusion, I commit to do the best that I can for property owners impacted by HS2, which includes ensuring the timely payment of compensation, the urgency of which has been laid bare in this debate.
Theo Clarke
First, I thank the Minister for listening to the extraordinary examples we have heard this afternoon of how HS2 has behaved to our constituents.
I thank in particular my hon. Friend the Member for Lichfield (Michael Fabricant), the hon. Member for Chesham and Amersham (Sarah Green), my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson), the hon. Member for North West Leicestershire (Andrew Bridgen), and my hon. Friends the Members for Crewe and Nantwich (Dr Mullan) and for Buckingham (Greg Smith) for speaking in this debate.
I welcome what the Minister has said, that he will visit my constituency to meet affected residents, and in particular that he will write to all of us who have spoken in the debate to provide clear answers on the individual cases we have raised. It is very clear from this debate that there is still considerable uncertainty over HS2, and I welcome the fact that the Government are going to look again at resolving all outstanding compensation claims.
Question put and agreed to.
Resolved,
That this House calls on the Government to provide compensation to people who have been affected by the construction of HS2.
Morecambe Town Council
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text
David Morris (Morecambe and Lunesdale) (Con)
The petitioners of Morecambe, on behalf of 3,919 responses, which is over a quarter of the households of Morecambe, request the House to take into consideration their petition against Morecambe Town Council’s precept rise of 231% for 2023-24 to create, without a full referendum, a slush fund of £1 million, which has been put to one side. This amount should be returned by any means possible to the constituents of Morecambe, either in the form of a complete freeze in future council tax until it is paid back or by any other mechanism that this House can employ to meet that objective.
Following is the full text of the petition:
[The petition of residents of the United Kingdom,
Declares that the petitioners do not agree with the increase in the parish precept implemented by Morecambe Town Council.
The petitioners therefore request that the House of Commons urges the Government to review the increase in the parish precept implemented by the Council and cap parish councils from being able to implement a large rise in Council Tax without a formal referendum in the future.
And the petitioners remain, etc.]
[P002899]
Sandwell Metropolitan Borough Council
(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Shaun Bailey (West Bromwich West) (Con)
I am very grateful for the opportunity the House has given me to bring forward this debate. All I can say is, here we go again: Sandwell Metropolitan Borough Council back on the Floor of the House.
Before I turn to my broader critique, I do want to talk about the positives, because there is positive news about Sandwell. Despite the line parroted by the failing Labour administration in Sandwell about this £105 million it has magicked up that it does not have, in fact the Government has helped Sandwell with nearly £411 million of investment since 2019, enabling the communities that form the six towns in Sandwell to realise their potential and opportunities. We have seen that in £65 million-worth of town deals, with £22.5 million for Tipton town centre in my constituency, £20 million announced for Wednesbury Friar Park and some £4 million on a heritage action zone in Wednesbury town centre.
However, the focus of the debate is the governance of Sandwell and, in particular, the governance around such schemes. At times, I share the frustration of my constituents, who are not seeing the council spend the capital investment that is coming through. That begs the question of why. Surely it is in the council’s interest to get this off the ground and to spend the investment now, and to see the economic and social benefits for our towns come to fruition. I share the frustration of my constituents over the governance of these programmes, because that simply is not happening. That is a damning indictment of a failing administration.
I want to touch briefly on the community. I have been very critical of the council in my time in this place, and rightly so. It is often referred to out there as “bent Labour Sandwell”, “soviet Sandwell” or “the socialist republic of Sandwell”, but despite the failings of the crackpot Labour administration, the communities that I represent have real heart and this has built a real sense of community campaigning. We have seen that come to fruition often when fighting back against the bizarre governance of Sandwell, for instance through our successful campaign to save Walker Grange care home in Tipton in my constituency. Labour-led Sandwell council argued that it was going to turf out the residents, whose ages ranged from 70 up to 100, because it could not afford the costs. When our action forced transparency on that, we found that Sandwell had underspent its budget by £2 million. Again, when we put Sandwell under scrutiny, we find that we cannot trust the answers we get back from it.
The spirit of community campaigning was also shown through the community-led campaign that saved Tipton police station. That is obviously not under the direct control of Sandwell council but it was interesting to see the Sandwell Labour leadership rubbish the campaign that the community had led alongside myself and others, and it was even more interesting that our police and crime commissioner attempted to rubbish that campaign. He is the same PCC who is using public funds to try to launch a judicial review against the Government’s decision to merge the Mayor and the PCC. I hope my hon. Friend the Minister will relay to colleagues that it would be good if, when the PCC loses that case, he is made to refund out of his personal funds the money he has wasted on this ridiculous court action.
Let us turn to the heart of this debate, which is Sandwell Metropolitan Borough Council and the stuff it has done. I could talk about a litany of things. I could talk about the special educational needs transport contract that went from having 19 providers down to two—a £22.5 million contract doled out to a friend of the disgraced former Labour leader. When parents challenged the council on that, they were told, “Shut up or you will lose your transport.” They were told that if they criticised the council on social media, their children, some of the most vulnerable in the borough, would not be able to access the education that they need. We then had the disgraceful situation some 12 months ago of a clause being put in social tenants’ contracts, saying that if they criticised the council on social media they could face disciplinary action up to eviction. It would be a parody if it were not true. It is the socialist nightmare.
We have seen, once again, that child social services requires improvement. That is an improvement from inadequate. I have to ask the comrades at Sandwell Metropolitan Borough Council why they think that kids in my constituency do not deserve the same life chances as everyone else. To me, their failure in this space is indicative of the disdain they clearly have for the communities they represent.
I could talk about the failures on housing. I have been working recently, as many colleagues have, on rogue developers. We had an incident recently with two estates in my constituency, where the council, in dealing with a relatively new, untested developer, decided not to follow its usual course of using advance payment codes—in other words, getting bonds ahead of time, so that were the developer to go bankrupt, the council could access capital funds to do such things as pave the roads and sort out the lighting. The council decided, for some unexplained reason, not to do that. When I challenged officers at the cabinet petitions committee, they could not say why they had not done that. The political leadership of the council simply said, “Other boroughs don’t do it, so why would we?” There is a complete and utter lack of accountability from these people, and they have complete disdain for the communities they represent.
I must touch on the waste contract and the campaign I have launched to keep our weekly bin collections. Sandwell council has entered into a £650 million, 25-year contract—yes, that is right—for bin collections. The council’s proposal is to take collections fortnightly, predicated on the basis that it would somehow save money, but it is tied into this contract. When it has signed on the dotted line for 25 years, I struggle to see how that move would save any money. As part of that, we saw a strike last year run by Sandwell Labour’s paymasters in the GMB that saw flying pickets and aggressive tactics. That was only stopped because the community effectively rose up, counter-picketed and counter-protested, and showed Sandwell Labour’s paymasters that they were not going to tolerate this anymore, because why should they? All they see is rising taxes, failing services and falling standards.
The retort we hear from the Labour administration in Sandwell is that the situation is due to 14 years of the Tories and Tory cuts. That is the line Labour constantly likes to use. I am sure that my hon. Friend the Minister hears that often from Labour colleagues in local government. I simply say this in response: the Labour party has led Sandwell council for 50 years—half a century—under Governments of all persuasions and all colours, yet people’s lives have got worse.
If you want to know why your kid cannot access a decent school, do not look here; ask Sandwell Labour. If you want to know why your streets are not safe at night, ask Sandwell Labour why it is closing your police stations. If you want to know why you cannot get your rubbish collected, ask Sandwell Labour. If you want to know why the services you pay for are not adequate, ask Sandwell Labour. It has had the cash, the investment and the resources. The point is that it cannot be trusted to run services in our communities properly.
This issue came to a head in March 2022 with the intervention by my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities. He made the right decision to call in the commissioners. There has been progress since, and I have been pleased recently by the engagement of my hon. Friend the Minister—he has taken a real interest in Sandwell. He is to be commended on how he has picked up this interesting brief quickly and fully, especially when there are councils like Sandwell.
It is such an indictment of 50 years of failure that we are still the eighth most deprived borough in the country. It is as if the Labour party in Sandwell takes pride in that. It takes pride in the fact that standards are dropping, and it offers no reason for that or alternatives on how to fix it. It seems to revel in it. It blows my mind how anyone in a position of authority—particularly elected authority—could do that when they have stewardship over the great communities of the Black Country. As I said in my maiden speech, these people are grafters and fighters. They deserve so much better than this shambles, yet time and again we see these people who claim to be representatives of working people—that is the biggest joke that any of us has ever heard—somehow revelling in the fact that standards are falling and things are not as they seem.
Jane Stevenson (Wolverhampton North East) (Con)
My hon. Friend has a fantastic set of communities in his constituency, as I do in Wolverhampton North East. We share similar problems in the Black Country. Wolverhampton has, similarly, had 50 years of Labour administrations that like to blame Conservative Governments for their failure, but when an authority is the worst in something and every other authority is under the same Conservative Government, ultimately it is time to take responsibility.
Does my hon. Friend share my concern that although tens of millions of pounds of investment are coming into our constituencies from this caring, levelling-up Conservative Government, we are not seeing the results, and our constituents are not feeling the benefits? I secured £3 million of high street regeneration funding for Wednesfield—he knows it well and has visited it with me—but nearly three years later my Labour council has not put forward a plan on paper. I am sure that he has similar instances.
Shaun Bailey
My hon. Friend is absolutely right. She is a doughty champion for the people of Wednesfield, Bushbury and the rest of her constituency. I think she shares the concern that it feels like there is some running down of the clock. It feels like the officers can see the clock ticking and do not want recognition to be given to anywhere else.
I will say that, particularly since new faces have appeared among the officers at Sandwell council, it seems to be more on top of this, but there is still the concern that the political leadership of these authorities see some sort of win from these things not materialising. It is absolutely crazy. As I said, half a billion pounds has been put into my borough, and yet the narrative seems to be about Tory cuts. I am sure it is the same in the great city of Wolverhampton. The narrative will be, “It’s 14 years of the Tories,” but it is not; it is 50 years of Labour turning its back on these communities.
I have a solution for my hon. Friend the Minister, which was coined in the campaign that has been launched with such enthusiasm: scrap Sandwell. Sandwell is an artificial construction of the Ted Heath reforms of the 1970s, which brought together six very different towns in the Black Country. I appreciate that he will not be able to stand at the Dispatch Box today and say yes to that, much as I would be over the moon for him to do so. There is always middle ground in how we empower our communities, but the truth is that Sandwell Metropolitan Borough Council, and its political leadership in particular, has brought embarrassment to the communities I represent.
The retort that I have had, particularly from Labour politicians, has been, “Well, you’re talking the area down.” No. In the campaign that we launched in October, we had thousands of responses, and 80% of them said they do not recognise themselves as coming from Sandwell. If you come from Wednesbury, you come from Wednesbury. If you are from Tipton, you are from Tipton. If you are from Ocker Hill, you are from Ocker Hill. If you are from Great Bridge, you are from Great Bridge. If you are from Smethwick, you are from Smethwick. You are not from Sandwell. What is Sandwell? Sandwell is the name of the Franciscan priory from 1,000 years ago. It is not a place—well, it is a place, but it is a constructed place.
People are proud of their towns. I am proud that I live in Wednesbury, and I am proud of that town, mentioned in the Domesday Book 1,000 years ago. That is what people want to see. Of course, the real-life impact is that my towns in Tipton and Wednesbury have missed out because Sandwell council’s priorities have been in West Bromwich and Smethwick, all because the arbitrary thresholds have not been met because of the size of those towns.
Clearly, there are options to be explored, and I appreciate that we can utilise many mechanisms to ensure that the identity of these communities is respected, accentuated and brought to the fore. That is so important to my constituents. They are proud of where they come from and the heritage of their towns. They are fed up with this creation that has turned into a monster, leaving them without services.
We have had the ridiculous situation today where all the pay and display parking machines have been taken out of the car parks in Spring Head in Wednesbury. The council expects people to go online, not realising that most of the demographic who utilise that service are of an age where they are probably not digitally connected. I talk about governance; that is the kind of lunacy and idiotic ideas that come from that rabble. Yet they sit there and lord it as if they have been hard done by.
We need proactive government in our towns, whether through an empowered town council—there are examples of that in the west midlands—or through some other format. We need something that will safeguard our identity, and a local government structure that preserves and looks after the identity of my proud towns of Tipton and Wednesbury. It is as simple as that.
I am looking forward to the Minister’s visit to the Black Country, and I am sure he will visit my hon. Friend the Member for Wolverhampton North East (Jane Stevenson) on the way. Our proud Black Country towns have so much to offer. The governance at Sandwell Metropolitan Borough Council has done nothing but bring embarrassment to those towns. It is not talking down those communities to highlight that. It is not talking down the communities to highlight that a Labour party that has governed that area for 50 years has been to the detriment of people, who have seen their services cut and their opportunities eradicated. But their aspirations have not been cut, because the people I represent are aspirational. They want to achieve, but they are blocked time and again by the Labour administration.
I wish to finalise my remarks with a quotation from history, which I hope the Minister will appreciate. As I prepared my comments, I was looking for something to sum up my thoughts on the governance situation at Sandwell Metropolitan Borough Council. I am sure that those who have studied it will know where it comes from:
“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”
My hon. Friend probably knows where that comes from: the declaration of independence 1776.
The security and the safeguarding of the future of these proud towns is at the heart of what I am here to do. They have had half a century of disservice by the shambolic Labour rabble, who have done nothing but try to eradicate their life chances and leave them worse off. That should never be the case. I look forward to hearing from my hon. Friend the Minister. I am so grateful for the time and effort he has put into Sandwell. He is committed to making sure we get this right. I thank my hon. Friend the Member for Wolverhampton North East for her considered intervention. I thank the House and you, Mr Deputy Speaker, for hearing my comments. I made my constituents a promise when I was elected to this place that, after 50 years of feeling ignored, they would never be ignored again. I hope that in this speech, I have made sure that their voices are heard loud and clear.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)
First, I thank my hon. Friend the Member for West Bromwich West (Shaun Bailey) for securing this debate. I have been in this job for nine weeks. If I had a fiver for every time he has stopped me in the Lobby or in the corridor to raise an issue or have a conversation about his borough council, it would certainly have bought him and me quite a good dinner. He never misses an opportunity, and he is right to do so. We use the phrase “doughty champion” quite a lot to describe colleagues. He truly is one, and his constituents should be proud and pleased with the passion, concern and care with which he advocates so vociferously on their behalf, not just to me but to my right hon. Friend the Secretary of State and to Ministers across Government. He is to be warmly commended for all he does on behalf of his residents.
My hon. Friend was right to talk in the first instance about money. I will just set the scene, if I may. Sandwell’s reserves stand, as of 31 March, somewhere in the region of £110.5 million. That is very good. That speaks to sensible management and ensuring that funds are available for a rainy day. The 2024-25 provisional local government finance settlement makes available £388.9 million for his council, an increase in core spending power of £25.4 million, or a 7% increase in cash terms when compared to 2023-24. I therefore share his belief that to say that all the council’s problems are rooted in the heartlessness and lack of thought or attention from this Government is scotched just by those figures.
However, my hon. Friend was right to go on to talk about the other important investments that have been made in his borough by the Government: £69.5 million from the towns fund; £20.3 million from the levelling-up partnership; £20 million from the levelling-up fund round 2; £20 million from the levelling-up fund round 3; and £20 million for a capital regeneration project. Those are important figures and important projects of themselves, but when added together, nobody could suggest that this is a party and a Government who do not care for the people of Sandwell and are not seeking to do all they can, working alongside elected members be they local councillors or Members of Parliament, to help drive that figure of eighth-most deprived borough in England into a far better place. I do not think that argument stands up to challenge.
What I would say to my hon. Friend, and I know he will agree with me in this assessment, is that he was right to talk about the potential downsides—he manifested some of them in his remarks—when any one political party dominates the political scene and the landscape for a considerable period of time. I hope that what his election has demonstrated, and that of other hon. Friends representing constituencies in the area, is that we believe that levelling up is all about aspiration and ambition for all, that no part of our country is left behind, and that there is no one who does not deserve our attention, our help and our support. I am very pleased and proud to serve in a Department in this Government that has spent so much money, time and effort considering the needs of Sandwell Metropolitan Borough Council. We have a proud record on which we stand, and I am sure that many people in my hon. Friend’s constituency recognise that all too well.
Before we look to the present and the future, we have to look slightly to the past. Commissioners had to go into the council because, as it recognised itself, there were serious governance issues, and problems with culture and leadership. They included allegations of serious misconduct by both councillors and officers. The council had had six different leaders in six years—that makes it feel a bit like this place, Mr Deputy Speaker—and three chief executives over the previous three years. That instability led to a breakdown in trust, respect and confidence between those holding governance roles at the council. On services, the time the authority spent responding to internal allegations and complaints impacted on its ability to focus on service improvement. Inadequate procurement and contract management arrangements led to poor decision-making, and impacted negatively on key services, including transport for children and those with special educational needs.
It was those triggers that prompted my right hon. Friend the Secretary of State to send in the cavalry. He was right to do so and I know that my hon. Friend applauded my right hon. Friend for the action he took. That action has worked, and I want to pay tribute to the current leadership of Sandwell Metropolitan Borough Council. Are they getting everything right? No, but there again—I must share a secret with my hon. Friend—neither do Ministers, all the time. We are all human. To err is human; to forgive, as we know, is divine. However, significant improvements have been made, which have allowed the commissioners to continue to refer, in their published reports to the Department, to clear trajectories of improvement. That means not just improvements in the output of service to those who are most in need, but a significant step change in the way in which the council has ordered and organised itself and its approach to governance.
Sometimes admitting when one is wrong and facing the problem is the biggest challenge, and once that is overcome, the route to recovery appears clear. It is not without stumbling blocks and stones and it will not be without pauses along the way, but the council leaders have made significant progress, and as I say, they should be both congratulated and encouraged. When the position of the commissioners ceases—and we will be looking to that in due course—the Local Government Association will continue to work with the council to ensure that that path of progress, that path of improvement, which I am hopeful and confident that local residents have started to see or will soon start to see, is continued. Falling back into the old ways of performance, or lack of performance, will not be tolerated.
It will come as no surprise—and I say this not as a threat, but as a statement of fact—that as with any authority that has found itself in a position whereby commissioners have had to be sent in, progress has been made and the work of those commissioners can be drawn to a conclusion within the envisaged timetable, we will keep a weather eye, a kindly eye if you will, the eye of a paternal godfather, on a council that is still trying to do its best. We will continue to be there to support, advise and encourage, because the depth of the change that the council needed to be made will by definition necessitate that.
My hon. Friend talked of the abolition of Sandwell council. He will not be surprised to know that I am about to repeat the dictum of the Government. We will, of course, always respond to any reorganisation of local government, but that must be from the grassroots up. Support must be demonstrated at political level and community level, from the business community and from other public service providers, and a clear case must be made. I have to say—I hope this gives some clarity to my hon. Friend, although I appreciate that it may not be the clarity he seeks, but I also hope it gives both certainty to the council and an indication to the residents, the council taxpayers and, more important, the users of its services of the improvements it has made—that I fear that a change in the architecture of the borough at this stage would prove a distraction from the vital improvement work that is ongoing.
Of course there are ways to improve scrutiny, and of course there are ways, through the localism agenda, to empower the towns, particularly those historic towns where there is a great sense of place and identity. However, I suggest to my hon. Friend that he should work with the council leadership to explore those opportunities to give a much greater sense of place to the towns with which those who live in them feel such a close affinity.
We are making a huge investment in Sandwell Metropolitan Borough Council, in monetary terms and in terms of time and energy. Why do we do this? We do it because we care, and because we understand the important role that local government plays in the fabric of our nation—the powerful role that it plays in creating a sense of place and delivering change, responding to the changing needs of the most vulnerable and those who seek to improve on the agenda of hope and aspiration for change. With my hon. Friend and other colleagues, with an engaged council that has a new and improved outlook, I have every confidence that all of us pulling together can deliver for the people of Sandwell.
Question put and agreed to.
Leasehold and Freehold Reform Bill (Third sitting)
Thursday 18th January 2024
(3 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Leasehold and Freehold Reform Bill 2023-24 View all Leasehold and Freehold Reform Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 January 2024 - (18 Jan 2024)
The Chair
Before we start hearing from the witnesses, do any Members wish to make declarations of interest in connection with this Bill?
Matthew Pennycook (Greenwich and Woolwich) (Lab)
My wife is the joint chief executive of the Law Commission, whose work on leasehold reform we have regularly touched upon.
Mike Amesbury (Weaver Vale) (Lab)
I am a member of the all-party parliamentary group on leasehold and commonhold reform.
Andy Carter (Warrington South) (Con)
On that basis, I am also a Member of the all-party parliamentary group.
The Chair
I think you have to declare only APPG officer posts, not just membership of them. But thank you anyway; it is best to be safe.
Examination of Witnesses
Ms Paula Higgins, Bob Smytherman and Sue Phillips gave evidence.
The Chair
Q
Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings on the programme motion agreed by the Committee. For this panel, we have until 12.10 pm, and that will be a sharp cut-off—a sharp guillotine. Would the witnesses like to introduce themselves for the record, please? Thank you, and welcome.
Ms Paula Higgins: Thank you. My name is Paula Higgins; I am the founder and CEO of HomeOwners Alliance, which was set up 12 years ago to support and campaign on behalf of homeowners and those who aspire to own. And that includes leaseholders, of course.
Sue Phillips: My name is Sue Phillips. I am a leaseholder. I am a former shared owner, and I set up Shared Ownership Resources in 2021 to campaign for the best interests of shared owners and people considering shared ownership.
Bob Smytherman: My name is Bob Smytherman. I am chairman of the Federation of Private Residents’ Associations. I have been a leaseholder in my own block for more than 30 years, and I have been a director of my self-managing block for 25 years. Thank you for the opportunity to put the case for resident management companies across England and Wales for this exciting piece of legislation.
Matthew Pennycook
Q
First, the Bill makes provision for the treatment of intermediate leases in a number of areas, but it does not contain, as far as I can read, any measures to directly resolve many of the challenges that shared owners face. Could you give us your general views on the Bill from a shared-ownership perspective? What is missing? What might we look to include if we could?
Secondly, the Government tabled more than 80 pages of complex amendments to their own Bill yesterday. Among those were amendments that would exclude certain shared-ownership leases from enfranchisement and make the new valuation method for calculating the premium payable for shared owners non-mandatory. If you have had a chance to look at those—you may not have—could you give us your views on those specific amendments? We know that enfranchisement for shared owners is expensive—it is challenging—but, none the less, is it a regret, from your point of view, that these amendments have been tabled?
Sue Phillips: I will start with yesterday’s amendments. I have had a look at them and I have called around legal experts, and, of course, it is far too short notice for a legal expert to comment, let alone a lay person like me. Therefore, I will concentrate in my evidence on what I would like to see in the Bill; I cannot comment on the degree to which those amendments will achieve those things, so I just want to make it clear that I cannot comment specifically on the amendments.
In terms of the Bill generally, obviously it is aimed at leaseholders. Shared owners are a very specific subset of leaseholders. They generally face additional problems over and above the problems faced by leaseholders. They have fewer rights and protections under law. They face additional burdens. They also have fewer protections under consumer protection, including new build codes. Therefore, they are generally disadvantaged. As it stands, the Bill does not represent a better deal for shared owners. That is partly because of the issue you referenced. Shared owners are sometimes, not always, in very complex ownership arrangements. There are problems for leaseholders generally, but there you have the additional party of a housing association in the mix. I could talk for half an hour on this; I will try to be very concise.
I will just pick out one example, which relates to the fact that shared owners do not have a statutory right to lease extension. If they did, they would have a right to a 90-year extension. In the absence of that right, some shared owners are in complex arrangements where their landlord is a sub-lessee with only a short interest in the lease themselves, so is actually incapable of offering the equivalent to the benefit that a leaseholder would get under the statutory route. That is unless you go through a process of extending all the leases, and all those costs are passed on to the shared owner. There is a real problem there that is not addressed in the Bill as it stands, in my understanding.
Matthew Pennycook
Q
Sue Phillips: The problem with looking for quick fixes is that shared ownership is so complex, you run a risk of creating unanticipated consequences. Those particular questions are better directed at a lawyer or a legal expert, which I hope you will do this afternoon, when you have legal experts presenting their views on this Bill.
The Chair
Does anyone have anything to add? Do not feel that you have to; I am not putting you on the spot.
Ms Paula Higgins: There is one thing I would add. I am so pleased that Sue is here; she has done amazing work on shared ownership. I am not a legal expert, but I wonder whether you will be hearing from people from the retirement housing sector as well. That is a very complicated form of tenure, with exit fees and whatnot. Can they actually have the same rights to challenge fees and things like that? I am not sure if that is covered in some of your evidence sessions, but retirement housing is notoriously known for quite scandalous fees and charges.
Bob Smytherman: Certainly, we have seen a massive increase in shared ownership memberships coming to us for membership of residents’ associations. Obviously, we are helping them through that. In terms of quick wins, I really hope the Government will finally implement an independent statutory regulator for property managers. That would be a really quick win to help leaseholders. It is very disappointing that we have not got there yet, so I really hope there will be an independent regulator for these management companies that hold large amounts of leaseholders’ money.
Barry Gardiner (Brent North) (Lab)
Q
Sue Phillips: One of the things I would want from this Bill is for shared owners to have all the rights that other leaseholders have. Of course, as your question flags up, they face problems over and beyond the problems faced by leaseholders. The problem for shared owners is that if they—I will not speak to the specific technicalities of this—fall behind with payments, they are liable to possession with no reimbursement of the equity they have invested in their property. This is because they sit more as a tenant than as a homeowner. I would certainly like to see that addressed.
Barry Gardiner
Q
Sue Phillips: It is. Housing associations will say that they will do their utmost to prevent this scenario playing out, and that numbers are low. While that may be true, I do not think it is an argument against shared owners having the same protections in law as other leaseholders.
Barry Gardiner
Q
Sue Phillips: Shared owners should have the same right as other leaseholders and they should not be liable to lose their investment in their home due to a relatively small debt—absolutely.
I would add that it is a hugely important issue, but it is probably an issue that affects a fairly small minority of people at the moment and that there are other issues arising from this reform process that affect a great many more shared owners or all shared owners. It is an important issue, but I would not like for it to take up a disproportionate amount of time in this session.
Barry Gardiner
Q
Sue Phillips: My expertise does not lie so much with right-to-manage claims; what I would reiterate is that they should have the same rights as any other leaseholder.
What is more important—what is specific to shared owners—is that they are liable for 100% of the costs of repair and maintenance, and I think there are two separate issues within that. One is the issue relating to the model. In previous sessions—
Barry Gardiner
Sorry, I couldn’t hear what you said there.
Sue Phillips: Sorry. One is to do with the model and one is to do with the transparency around the model. On the model itself, in the previous sessions on Tuesday people talked about the unfairness of generating income streams from leaseholders after the profit made on the sale of the initial share, and I think that the 100% liability for service charges that shared owners have falls within those kinds of questions. It should certainly be looked at to see whether it is proportionate for shared owners to pay 100% of charges. Again, there is a great deal more that I could say, but I am aware of the limits on time.
The second issue is transparency. In evidence submitted to the Levelling Up, Housing and Communities Committee inquiry into shared ownership, one of the themes that has come out of the published responses from shared owners is that people do not seem to be aware at the point of sale of their liabilities in this respect. Therefore, if we cannot tackle that 100% liability in this Bill, given time constraints, at the very least regulators should pay more attention to the nature of marketing and whether it is fair, transparent and compliant with consumer protection regulations.
You asked me earlier for a quick fix. I certainly have a quick fix around transparency and it is that the relevant regulators should look more closely at transparency about the model as it stands, up until we have meaningful reform of the areas that are problematic.
Barry Gardiner
Q
Sue Phillips: I think it is essential, and this relates to the marketing that I have talked about. Shared owners come into shared ownership believing that they are a leaseholder like any other leaseholder; they have no reason to think differently. Often, there is a caveat emptor attitude and I think that is reprehensible, to be honest, when you are talking about provision of social housing to households that by definition are financially vulnerable compared with people who can afford to buy outright. It is not a failure of their due diligence; it is a failure of the Government, the housing sector and their agencies to spell out the difference between assured tenancy and leasehold.
There is a moral compass argument that they should have the statutory right to lease extension, because of the manner in which they have been sold those short leases. I think there are separate debates to be had about whether 99-year leases were mis-sold. A recent ruling by the Advertising Standards Authority outlined that it is likely to be misleading not to provide material information about the costs of lease extension. That suggests that there certainly is an argument that those short leases have been mis-sold.
We cannot change that. Most of those shared owners will be outside any scope of limitations for redress. The least we can do is ensure that lease extension is available not only to future buyers, but current shared owners, who have been left with a lease that does not actually give this right. Can they afford to take up the right? They should have a right to lease extension, but that right should be made affordable. If you are sitting there with a 50, 60 or 70-year lease, even if you have got that right to statutory lease extension, it might not be affordable to take up that right. So there is a basketful of issues to look at here, and I encourage collaboration with other regulators and with the Levelling Up, Housing and Communities Committee to resolve those other issues.
The Chair
Just one last question, Barry, because I want to get other people in. I might have the time to come back to you if you have more, but—
Andy Carter
Q
Ms Paula Higgins: I feel strongly about that. This is really going to be a missed opportunity. These types of Bills will come once every 20 years, so you must finish the job that you start. We saw that in the Commonhold and Leasehold Reform Act 2002, where we had the commonhold and it did not happen. If we cannot get commonhold sorted, why do we not have all flats being built having to be share of freehold—having to be sold share of freehold within five years—and have a sunset clause saying that there will be no new leasehold flats after a certain time? If you do not do it now, the next opportunity is not going to arise. I feel very strongly. We have lots of people who are waiting. We have people coming to us every day saying, “I am waiting for my lease extension. The Government are going to do something about it.” We have been waiting for years; we put out our report in 2017 showing that 43% of leaseholders did not even know how much time was left on their lease. They are not expected to be experts in this; they are buying a flat to live in. So it is a real missed opportunity if we do not do something on this and it will come back to bite us.
Andy Carter
Bob, is there anything you want to say on that?
Bob Smytherman: I would just completely echo that. For us as an organisation, in 2002 we were really hoping that the Government would ban new leaseholds in the 2002 Act, and the sector would be in a very different place had we done that. This Bill is a really good step, and I hope that we can get it as a first step and then build on it from there. I would hate to think that we try to make it perfect and we end up with something less perfect. From our organisation’s point of view, this is a really good starting point. I think it is the beginning of this, as Paula said, but it is a really good opportunity to get it right. But, yes, 2002 was a bit of a missed opportunity to ban leaseholds for blocks of flats.
Andy Carter
Q
Bob Smytherman: Thank you for that opportunity. Our organisation is called the Federation of Private Residents’ Associations. To be clear, we are talking about groups of leaseholders who come together democratically within their blocks of flats; we are not talking about neighbourhood watch groups and those sorts of residents associations.
Very different sorts of residents associations come to us for membership. We have those more informal groups that do not meet the 51% threshold to be a recognised tenants association; we have that group of RTAs that are formally recognised by their landlords; and then we have the residents management companies, which are probably the majority of our members. We have RMCs such as mine, which has a tripartite lease, which I am sure Members will understand, where you have an external freeholder and then a landlord who has responsibilities, which enables people such as me in my block to basically act as a commonholder. We are a limited company, limited by share. I am a shareholder in my block. I am elected every year as a director and we manage our own block. Of course, we also have those RMCs that may have a different arrangement with their freeholder, and that is where the Leasehold Reform (Ground Rent) Act 2022 has been very helpful in coming into law, because there are sections, which we do not need to rehearse today, to deal with a doubling and tripling of ground rents and things like that.
So there are different sorts of residents associations, but I would argue on behalf of all of those, certainly our members across England and Wales, that this Bill is a really good starting point for all of them. I encourage leaseholders to come together in their buildings and take control of their buildings democratically, working with their neighbours.
Andy Carter
Q
Bob Smytherman: At the moment, I would like to see this over the line, in all honesty. There is the conversation to be had—I think Paula mentioned it—about commonhold, which I think can come later on. But in terms of blocks like mine, where we have those controls already, there is absolutely no advantage to us in banning leasehold, because we have all the controls we need.
As the directors, elected democratically by the shareholders of a limited company, we are the landlords, so we have the ability to manage that estate democratically. We hold an annual general meeting and we comply with the company law, like any company. Hopefully this legislation will encourage more volunteers. I am a volunteer, I don’t get paid for what I do in my block, but I am really passionate about working together with my neighbours to make my estate better. Members of this Committee are very welcome to come to Worthing, down on the south coast, to see how we manage our own block, because I am very passionate about working together to make a real difference for our neighbours and friends where we live.
Andy Carter
Q
Bob Smytherman: I think all new developments should be commonhold. It is a shame we did not do that in 2002, but I think—as Paula said—there is an opportunity to do that now. But I wouldn’t want to throw everything else out at this point to die in a ditch over that, because actually I think there is some really good stuff in the Bill.
The Chair
I am sure I will have time to come back to you, but I just want to get the first batch of questions in.
Mike Amesbury
Q
Ms Paula Higgins: I think that was a statement put out at the time of the King’s Speech, when it was not clear. It sounded like the Government were going to consult on the ground rents, which is what they are doing now; it closed yesterday and we welcome that. I think at that time I was concerned that the King’s Speech said the Government were going to consult on how to limit ground rents. At the moment, there is no justification to have a ground rent payment for nothing; any payments should be as part of the service charge.
I welcome the Bill, and I fully support the ground rent being a peppercorn, if you cannot have the legal challenge. If you cannot have it as a peppercorn, then having it as a set amount makes it clean and clear. What we want is that when people are doing lease extensions, there is a calculator so they do not need to get valuers and have lots of negotiation; there is a lot of cost in that. You want to make it a process that is as simple as possible for people to extend their lease and get rid of their ground rent.
Mike Amesbury
That is great. Bob and Sue, do you have anything to add to that?
Sue Phillips: I just want to flag that one of the distinctions between shared owners and leaseholders is that shared owners cannot eliminate a ground rent via statutory lease extension, and that is a huge problem. My understanding is that there may have previously been an expectation in Homes England guidance—although it was not mandated—that shared owners would not be subject to ground rent. There is massive inconsistency in the shared ownership sector on all kinds of aspects, but it includes the imposition of ground rent, the nature of that ground rent, and whether you encounter it at the point it is staircasing to 100%. Ultimately, the key point is that shared owners do not have that resort to lease extension to eliminate ground rent at present.
The Chair
If anyone has not asked a question and wants to come in, please just indicate. Matt, Barry and Andy want to come back, so I come to you, Matt.
Matthew Pennycook
Q
My second question is on the service charge provisions—clauses 26 to 30. In principle they might work very well; there is lots of detail to come through regulations. However, are there any specific ways in which you would like to see those service charge clauses tightened?
Ms Paula Higgins: We really welcome standardisation and having standard forms. That is what we, as the HomeOwners Alliance, when we get more than 4 million people coming to our website, can present and say, “These are the questions you can ask.” I really welcome that and having everything aligned so that it is similar. I am sure that we will go on to estate charges and people on freehold estates. Sorry—what was the first question?
Matthew Pennycook
Q
Ms Paula Higgins: Even though estate agents are supposed to provide basic up-front information, when we did our report on leasehold, half of the estate agents on things we were looking at were not even providing the information that the property was leasehold or freehold. We know that work is going on, and that estate agents are supposed to provide up-front information—we understand that there is the BASPI form—but the reality is that it is not happening. They are not regulated; they don’t know what their obligations are.
This is the other piece, particularly with managing agents, as you mentioned before. We need to have better regulation of managing agents, developers, and of housing associations that are promoting shared ownership, to ensure that they are giving the right up-front information and to ensure that in blocks—as you said you did, Bob—you do the LP form right away. We know that there is lots of delay there. That is one of the reasons why buying and selling leasehold properties takes so much longer. So we really welcomed having that up-front information. That is through the BASPI form, and it is probably through the regulation and management—having regulation of estate agents and managing agents, which is another piece of the pie that I think would be really welcomed in the Bill. I would welcome it if it were put in the Bill.
Matthew Pennycook
Q
Ms Paula Higgins: On service charges, I think it is about being transparent. Some of the provisions in the Bill are about having proper annual accounts, so a lot of it is about trying to get that information. I have not looked at the detail of all the clauses there, but it is about people being able to get that information. That is why you need to have regulation of managing agents—to be able to provide that information properly.
The Chair
Q
Sue Phillips: Yes, on information at the point of sale. That is a little bit more complicated for shared owners. They are often directed towards the lease, but the lease is of course silent on the issue of 100% liability for service charges, so there is an issue there. They are often directed towards the key information document. I welcome the changes to the key information document in recent times, but I think they really do not go far enough. I would direct you to a report that I wrote last year about the 2016 to 2021 key information document, which goes into detail on improvements that I think should be made.
It is important to flag up that we need to look at not just content, but understandability in format. I have previously suggested that I think it would be useful to benchmark with other sectors, such as the pensions sector, on the understandability of issues relating to risk as well as benefit, and how to ensure that that content is communicated in a way that people do actually understand.
I will make a final point: a lot of shared ownership marketing presents itself as education about the model, which I think can be problematic, particularly because housing associations and their marketing teams are very up front about the idea that their marketing promotes the benefits. But it is important that people understand the risks and hazards as well as the benefits. So we need to look very closely at exactly where shared owners get their information at the point of sale, and where improvements could be made across all those areas.
Bob Smytherman: I think we would certainly welcome improvements in the conveyancing process. One of the things that our members certainly see is that they can get the information from a very specialist leasehold lawyer, which is obviously really helpful, but as in all sectors there are conveyancers out there where people google “conveyance” and think, “Oh, that is just a standard lease.” Of course, we all know that there is no such thing as a standard lease—their contracts are all very different. I know that about four or five years ago the Leasehold Advisory Service did some work around standardisation of information, so anything that we can do to prescribe that would be really helpful.
On the issue of service charges, there is absolutely one word, isn’t there—“transparency”? All the disputes that we see around service charges are where managing agents hide things because there is no statutory regulator, or where landlords kick accounts into the long grass because they don’t have to produce them. Having a prescribed way to be completely transparent about service charges is really important.
The Chair
We have just over 10 minutes left. I will bring in Richard Fuller and then we will try to get back to Barry and Andy.
Richard Fuller (North East Bedfordshire) (Con)
Q
I am interested in your thoughts when it comes to property managers and managing agents, about where you think the interaction is between simplification and regulation, and whether regulation is a matter of regulating the process—“You must provide this set of information by this date”—or of regulating the people—“Thou must have this qualification in order to do x”—or whether it is about the process of redress: being able to get some compensation at the end; because we are going to be wrestling with all those things here. They all have a role to play, to a greater or lesser extent. But we run the risk of just vomiting out a whole new set of what we think is going to be the solution. As you said, Ms Higgins, we have a once-in-20-years chance. I said this to Mr Gardiner on the way in—he goes back to 1993 thinking about this, and he is an MP now.
What are your thoughts? Give us some guidance on simplification and standardisation versus regulation, and then regulation of people, regulation of process and the provision of redress.
Bob Smytherman: I would not reinvent the wheel. I don’t know whether you have had The Property Institute in yet, and Andrew Bulmer from the Association of Residential Managing Agents. They fill the gap as the main membership organisation for managing agents. Andrew will give you the figures, but I believe they represent about 50% of all property managers of leasehold property. That means that 50% of people are not members of ARMA and are not part of their regime, along with the Institute of Residential Property Management—obviously, ARMA and the IRPM have now merged to form The Property Institute.
They have done amazing work to fill the void, where there has been a lack of an independent regulator, and I think working with Andrew and with them would be a really good starting point for the Government to create a regulatory regime. Certainly we would stand ready as an organisation to help with that. I just think that giving leaseholders the confidence that there is an independent body that they can go to when they have disputes with their property manager or their landlord is really important—as people do with Ofwat or Ofgem or other regulators. Having that independent regulator is really, really important.
Ms Paula Higgins: You make a really interesting point, but there are things that I would not want to see happening. We also work in the new homes area. We have legislated for a New Homes Ombudsman—fantastic—but we have not enacted it yet, and we now have a more confusing landscape for people who are buying new homes, who are probably also leaseholders and probably also shared owners; they have another competing code. It is incredibly confusing. That is not what I want to see happening.
Regulation means enforcement. There are a lot of things that estate agents have to do now, and we know from our research that they are not doing what they should be doing. The problem is that people do not have the right of redress if something happens. We have heard about the managing agents, but it is the estate agents, the developers and the housing associations who are selling these dreams. You have seen lots of people on Tuesday who feel they have been mis-sold, and others will continue to be mis-sold. These estate agents are the first port of call for the people going into the process, and we have to remember that people are buying a home, and they have not done it before. They might have bought a couch or something like that, but this is the first time they are doing this, and they can get it so wrong. People need to be protected. The estate agent is the only part of the professional world of property that is not regulated. The estate agent is that person there who is alongside the person trying to get their dream, which could go massively wrong.
Richard Fuller
Q
Ms Paula Higgins: That is a really good point. I know the RoPA stuff—the regulation of property agents working group; in fact, we gave evidence to it. A tick box is probably not the right thing. Perhaps it is more about a proper single place for redress, but as I think Andrew Bulmer mentioned, that is the ambulance at the bottom, and what matters is what is at the top.
What we don’t want is people doing online qualifications and getting a tick, and then they can jump up as an estate agent and come back down again. So I appreciate the complexities and I look forward to seeing what your deliberations will be.
Sue Phillips: I do not have the expertise to speak directly to the regulation of property management, but I would like to pick up on a couple of related issues from a shared-ownership perspective. The first is that the evidence submitted to the Advertising Standards Authority’s inquiry into Black Friday marketing highlighted the fact that industry sector standards for the marketing of shared ownership are lower than other standards that are out there. For example, shared ownership is currently excluded from the New Homes Quality Board’s code of practice. That simultaneously reflects the complexity of shared ownership but also the fact that shared owners do not have access to the same level of protections as other homebuyers in relation to new build codes. That is slightly off to one side.
I also wanted to pick up on the matter of transparency of service charges. Transparency is clearly essential: people should know what they are paying for. However, shared owners and other leaseholders should not have to effectively take on an audit function where it falls upon them to scrutinise accounts. They should be able to place some degree of reliance on the accuracy and proportionality of the accounts that they receive. I cannot speak to how that will be achieved, but I think that the onus should be on the providers of services and service charge accounts to be better, rather than leaseholders and shared owners having more and more obligations to scrutinise and take whatever action is required if problems are identified in those accounts.
Barry Gardiner
Q
Ms Paula Higgins: I fully agree with that. It is a bit like the situation where, if you are getting building work done in your home and the building work is not completed or whatever, you withhold money. That happens in all of the construction industry. The stuff in relation to the forfeiture is very disproportionate, is it not?
Barry Gardiner
Indeed, yes.
Ms Paula Higgins: I fully support something like that.
Barry Gardiner
Q
In so far as new apartments are going to have a share of freehold, Mr Smytherman, you indicated that you felt that you had got the best of both worlds as a director of a freehold franchise company.
Bob Smytherman: Yes. Ours is a tripartite lease. A ground freeholder owns the land and there is a separate middle lease, which is the limited company—limited by shares—of which we are shareholders.
Barry Gardiner
Q
The Chair
A one-word answer, please, because I have to get to the end.
Bob Smytherman: That is difficult. It depends. If you have a difficult freeholder, then that would clearly be an advantageous thing to do. Then there is a scenario like ours, where you have a democratic limited company with shareholders.
Sorry, I cannot do a one-word answer.
Andy Carter
Q
Ms Paula Higgins: There is another thing that I feel very passionately about. People come to us—
The Chair
Less.
Ms Paula Higgins: The other things that I feel very passionately about are estate charges and right to manage. We need right to manage and we need to make it so that all new-build estates are adopted by the local council.
Sue Phillips: I agree. The problems with estate charges can be overlooked in looking at service charges, rent charges and estate charges. The other thing I would flag up is for you to please look at the resale of shared-ownership homes. There are issues there.
Bob Smytherman: Simplify the process of bringing leaseholders together to form a residents association, so that they can speak to their landlord and the management with one voice.
The Chair
Perfect, bang on. I am afraid that that brings this question session to an end. Thank you for coming in and giving evidence to us.
Examination of Witnesses
Professor Andrew Steven and Professor Christopher Hodges OBE gave evidence.
The Chair
Right, that is a surprise: we have sound and vision. Excellent. We were not expecting vision, so that is all the better. We will now hear oral evidence from Professor Andrew Steven, professor of property law at the University of Edinburgh, via Zoom, and from Professor Christopher Hodges, emeritus professor of justice systems at the Centre for Socio-Legal Studies at the University of Oxford. We have until 12.40 pm for this session. Could the witnesses please introduce themselves for the record? We will start with Professor Hodges.
Professor Hodges: Good morning. Thank you for the invitation. I am not an expert at all in property law, but I am an expert in regulation, which picks up the point that Mr Fuller was just asking, so I hope to be able to help you on that. I am also an expert in dispute resolution systems—questions of ombudsmen and tribunals—which are fairly peripheral for today but are relevant to the broader regulatory systems. The interest I have is that I chair the housing and property redress group, which is an ad-hoc committee of the president of the property tribunal, the various three ombudsmen and the property and redress scheme.
The Chair
Members have a profile of our witnesses, so let us get to the questions. Thank you for that. Would our other guest introduce himself?
Professor Steven: Hello. I am Andrew Steven, professor of property law at Edinburgh University. I was a Scottish law commissioner from 2011 to 2019, and I am a member of the Scottish Government’s cladding remediation taskforce. I can hear you but I cannot see you.
The Chair
We can see you, so if you want to come in on any question, gesticulate and you will hopefully catch my eye. That goes for both of you.
Matthew Pennycook
Q
The first question is on commonhold. Professor Steven, you have published extensively on the Scottish experience of commonhold legislation; Professor Hodges, I believe that you are a member of the Commonhold Council. On Tuesday, we heard from Professor Hopkins of the Law Commission that there are risks associated with a partial implementation of the Law Commission’s recommendations on commonhold. Do you agree with that, and if you do, are there any sensible steps we might take via amendments to the Bill to pave the way for commonhold in the future—for example, share of freehold in flats?
Professor Hodges: I think that was for Professor Steven.
Professor Steven: I am reluctant to answer that in any detail, because I am really not an expert on English land law. May I say something briefly about the Scottish perspective? The difference goes all the way back to 1290, when Edward I, in England, said, “You cannot have feudal grants of property.” Leasehold therefore had to be used, particularly for flats, because of the desire to impose obligations in relation to maintenance and contributions to maintenance. In Scotland, feudal grants were not banned until 2004, which means that flats and other properties were sold that way. We do not have leasehold in the way that you do. Existing feudal holdings were converted into outright ownership in 2004. We also had legislation on long leases that took effect in 2015, which also converted into ownership. The context is quite different.
Matthew Pennycook
Q
Professor Steven: Absolutely, and I can see you now.
Professor Hodges: I am very supportive of all the work that the Law Commission has done on commonhold, and we discussed it two or three years ago. I would do it, and this is part of a wider discussion that I expect we will get on to shortly. It is about change management. At the moment, it is rather like the point mentioned by the three previous witnesses. Property law moves terribly slowly—for heaven’s sake, just get on with it. We have the agents, the tenants and the landlords. What we are doing is saying, “Well, do this. Then do that. Then do that. Then do that.” We know where we need to get to, and that would be a very good system if we can get there. They need to train and do all sorts of things. You want to take out repetition or unnecessary cost in doing several things at once. It really is a change management point. We know where we want to get to—just do it basically.
Matthew Pennycook
Q
Professor Hodges: It is the obvious thing to do, isn’t it? But I would go further.
Matthew Pennycook
Q
Professor Hodges: Quite possibly, and this is a generic point about access to justice and simplifying dispute resolution. I think the answer to that is to move towards an integrated system, which actually the tribunal and several of the ombudsmen have been working on in the past year in relation to service charges. There are too many places where disputes can go. If we simplify that to an integrated system that supports decision making—part of the answer is clarity and transparency in regulation—but if you support that, things move much more quickly. It has always been the case that, for example, courts are slow. They are a very careful process and therefore you need experts and lawyers, and it takes money—it costs. Whereas, with tribunals and improvement, ombudsmen are free and they move quickly. Getting a modernisation of that system is the answer to this basically. That is not there yet, but it is absolutely within sight and achievable.
Matthew Pennycook
If you do not have anything to add Professor Stephen, I will move on to my third question.
Professor Steven: Please move on.
Matthew Pennycook
Q
Professor Hodges: I think that it is outside my competence to know the background. My answer would be: just move to commonhold.
The Chair
Q
Professor Steven: No, I agree with my colleague. From a Scottish perspective, I would be more in favour of commonhold.
Barry Gardiner
Professor Steven, my question is to you. Last week, in the House of Lords, the Government indicated that they were looking at the Scottish system of tenements. Could you perhaps explain that to the Committee? My understanding is that the Scottish Law Commission has been looking to review tenement structure and actually make it more like commonhold. Is it correct that there is a lack of standardisation and no ability to ensure those share costs are split proportionately under the tenement structure, and therefore that would not be a quick cut-and-paste for the Government if they are considering what to move forward to?
Professor Steven: Yes, I absolutely agree. The legislation in Scotland is the Tenements (Scotland) Act 2004, which is 20 years old and is fairly basic. It does not have owners associations, for example, so it is less sophisticated than the commonhold proposals that the Law Commission for England and Wales made. But we have problems in Scotland too. There are always problems, no matter what the law says.
There are two particular problems. The first is where money comes from to make repairs to flatted properties—we typically call them tenements in Scotland. The second, sadly, is apathy. I was watching the earlier session, and I saw how engaged your witness in Worthing was, but sadly in other cases the owners are not so engaged. Even if you have an owners association regime, which the Scottish Law Commission is now looking at, it still depends on people being engaged. There are no easy solutions. I favour commonhold, but it will not be a magic wand.
Barry Gardiner
Q
Professor Steven: As a former law commissioner in Scotland, I am reluctant to disagree with the Law Commission for England and Wales, given the amount of work it has done on this. It is clearly very complicated.
You said that we got rid of our feudal system in one fell swoop in 2004. That is broadly true, but in 1974—50 years ago—we banned new feudal payments, which are like ground rents. There was a system whereby the existing feudal payments had to be paid off when the property was sold, so by 2004 there was not much left. My impression is that in England there is quite a lot left, in terms of ground rents. Because there was not so much left in Scotland, the compensation issues and the European convention on human rights issues that Dr Maxwell spoke about on Tuesday were not so prominent. Although we had the feudal system till 2004, it was a shell of what it originally was. In a certain way, it would be much simpler just to change leasehold into commonhold, but I fear that it would lead to all sorts of unforeseen consequences.
Barry Gardiner
Q
Professor Hodges: Very briefly: modernise, because we are still living in the past; simplify, because we can easily do that on a comprehensive basis; and get it done so that people can plan, retrain and know what they have to do. You then get good behaviour throughout the system. I am very tempted to repeat facetiously the “Get it done” slogan, which crops up a lot.
Richard Fuller
Q
Professor Hodges: As far as the detail of the Bill is concerned, looking technically at what is in there without expressing a view as whether it is a good or a bad idea substantively, it seems to me to be fine. You asked a wider regulatory question earlier on—
Richard Fuller
I will come to that in a minute. But just in here, on this Bill, is there anything that we should look out for?
Professor Hodges: As far as the detail is concerned, there is nothing that stands out to me, as a regulatory expert, that says, “This is a problem”.
Richard Fuller
Okay, so more generally then, on regulators—Ofgem on energy prices and Ofwat on sewage and water—that approach seems not to provide the outcomes that perhaps were originally indicated when the legislation was passed. What are your thoughts about the political use of regulation? Is there anything from those general principles that you think might apply here?
Professor Hodges: I sat on Lord Best’s RoPA—regulation of property agents—working group, and there was strong consensus around the room that you need regulation of agents. Since then, how we do regulation has evolved. Regulation, in the broadest sense, is an all-encompassing idea, and looking at the problems with Ofgem, Ofwat and so on, there are two aspects that strike me. First, one historically gave specific regulatory bodies certain remits that turned out to be not wide enough, and there were not enough people involved in the conversation; they were not regulated or contributing to good behaviour.
Secondly, the traditional way within which regulation is thought of, in the way that Parliament works, is that you make a number of requirements, rules and procedures. You then identify breaches of those rules and requirements and you then enforce. You can do that through traditionally public or private ways. Public ways in the property sector would be through trading standards authorities or environmental health locally, not a national regulator, as such. The private ways would be through the courts, but that has evolved in relation to the alternative dispute resolution ombudsmen being the best model at the moment and an integration between the tribunal and ombudsman, which is on the cards and may well occur. However, that is not enough because enforcement does not affect behaviour as such. We like to think that it does, but it is a myth, and there is an enormous amount of psychology and evidence published showing that it is not enough.
Therefore, if one stands back and says, “How do we get an effective regulatory system?”, it is about how one does it. That involves getting all the stakeholders together —again, that goes back to the first point about how it is not just a regulator telling people what to do, like an Ofgem or Ofcom—and saying, “How are we going to behave and how are we going to do it?” You need the rules, but you also need codes and systems involving data and support.
Richard Fuller
Rules, codes, systems, data, penalties, redress, different organisations—this is your answer as a better solution to caveat emptor?
Professor Hodges: Yes, absolutely. Now, let me give you one example only—
Richard Fuller
In all circumstances or specifically on this Bill? Well, we ought to stick to the Bill. I just want to be clear: you have just outlined the solution—this Bill is going part of the way to that—but the old way was, “I have personal responsibility,” “I am responsible for the decision I make,” “This is a very big decision about what I buy,” and so on. I just want to make sure that we are not trying to put too much faith—one of the last witnesses made some very good points on shared ownership and the fact that people may not have the encompassing knowledge—but I just want to make sure, from your expertise on regulation, that, in this field, you cannot see any damaging consequences for the principles of caveat emptor and personal responsibility by this regulatory structure that you have outlined?
Professor Hodges: Not at all. The most striking example—
The Chair
Please answer briefly if you can, because I want to get some more people in.
Professor Hodges: There are various regulatory systems in this country that are now modernising. In many ways, the most outstanding example, which has been there for several decades, is aviation safety. Everyone works together, and they call it an “open and just culture”. They are actually collaborating. They have lots of rules, but you have almost no enforcement, because the Civil Aviation Authority does not need to do it—everyone is doing something.
There are various sectors where you do need public enforcement, and where I would say you need a national system regulator. But you can do a lot through ombudsmen, codes and support. That is now emerging in, say, information and data protection, food standards and various other areas. It is absolutely ideal for property and housing.
The Chair
Thank you very much. We have 10 minutes left. Mike Amesbury wants to come in, and then I will call Matt and Barry.
Mike Amesbury
Q
Professor Hodges: I do not really think that is a question I can answer, because it is a policy question within which economics and other factors are relevant. Technically, as a regulatory system, I do not see anything wrong with it.
The Chair
Professor Steven, do you have anything to add to that?
Professor Steven: I do not.
Matthew Pennycook
Q
Professor Hodges: I think there is an enormous missed opportunity for simplifying across social housing, private and so on. In particular, I would introduce the regulation of property agents working group reforms immediately. Almost everyone wants them, as far as I can see, and it would be easy to do, because you would just cut and paste the relevant regulatory bits from the recently enacted Building Safety Act 2022 and put them in for private managing agents.
As I said in the paper that I sent to you—I gather that Andrew Bulmer was talking about this two days ago here—there are three very good reasons why you need the regulation of property agents, each of which stands up on its own. There are obvious risks if you do not put that building block in place, because things are going to go wrong and there will be detriment to tenants and landlords.
Matthew Pennycook
Q
Professor Hodges: Everyone should be in and under the same regime—absolutely everyone in the system.
Professor Steven: I do not have a strong view on this.
Barry Gardiner
Q
“any financial gain for the landlord”—
or freeholder—
“will be at the expense of the leaseholder…Their interests are diametrically opposed, and consensus will be impossible to achieve.”
Professor Hodges: In any consumer or property—certainly social housing—dispute system, there is an obvious imbalance of power. People do not have the money to do things. I have chaired the Post Office Horizon compensation board advising Ministers in the past few weeks. The whole reason why Parliament needs to step in is to correct a massive imbalance of power. Private litigation did not work, or it only half worked. There have been many stories about people being traumatised, and not just unable to enforce their rights. That is why we have invented things like legal aid, Citizens Advice and an ombudsman, and we are still moving—we are still improving that one—because of the ongoing imbalance of power between the little people and larger organisations.
Barry Gardiner
Q
I want to ask you about introducing insurance commission. I do not know whether you heard what the witnesses said on Tuesday, but you may know of the Canary Riverside case, in which £1.6 million in commission was given to a freeholder by the insurer—in a kickback—which was deemed to be inadmissible, and that is what the tribunal, mercifully, found. Although the Bill is outlawing commission, it is introducing fees for insurance services. In the Canary Riverside case, that is precisely what that £1.6 million was called. Do you fear that the Bill appears to dispense with commission, but actually reintroduces it by the back door?
Professor Hodges: Possibly, but that is why you need regulation. That is an obvious example of an imbalance of power and lack of transparency, for which you need external people to get involved. Exactly what the final result ought to be, I would leave to a regulator—for them to say that so much commission is either allowable or not allowable, or indeed not at all. It depends on the circumstances.
The Chair
Can I just interject and ask whether Professor Steven has anything to add to what you have asked so far?
Professor Steven: Very briefly, insurance law is UK-wide, but in Scotland insurance of blocks would normally be handled by managing agents because we do not have the freeholder. Since 2011, we have had legislation in Scotland that regulates managing agents. I know that that is being considered in England as well, but that might be of interest.
Barry Gardiner
Q
Turning to the value of the building and property rights, we heard from an eminent lawyer on Tuesday about property rights in relation to ground rent. Looking at enfranchisement, I think it was the Residential Freehold Association, which is charged with guarding the property rights of freeholders, that said that their share in the value of the building was only 2.5%. The corollary of that, of course, is that the leaseholders’ share in the value of the building is 97.5%. Do you feel that the way in which the costs of enfranchisement look at the total value of the building is therefore unjust?
The Chair
We have less than a minute left.
Professor Hodges: I would need to know an awful lot more to be able to answer that question, as a non-property expert. It is a very interesting question, and my answer would be that it is one for Parliament and the regulatory system to engage with.
Barry Gardiner
Thank you very much. Professor Steven?
Professor Steven: I have nothing to add.
The Chair
I thank the two witnesses for taking the time to give evidence to us today. Thank you for beaming in, Professor Steven, and thank you for attending, Professor Hodges. We will now move to our next witness—Paul Broadhead, come on down.
Examination of Witness
Paul Broadhead gave evidence.
The Chair
Q
Paul Broadhead: Good afternoon. I am Paul Broadhead, the head of mortgages and housing at the Building Societies Association, which represents all UK building societies and seven of the larger credit unions.
Matthew Pennycook
Q
Paul Broadhead: Yes, on the RPI, we have seen an increasing trend. I think that started when mortgage lenders changed their policies in terms of the escalating of ground rents—the doubling every five, 10 or 20 years, or whatever it might be. Mortgage lenders have started looking much more closely at the trends in ground rents to make sure that you can predict the affordability and fairness of those rents. You are absolutely right: the RPI change has followed on from many mortgage lenders moving to prevent the doubling of ground rents. We need to make sure we keep an eye on that and to make sure that they are fair and just.
Matthew Pennycook
They can be far more punitive.
Paul Broadhead: They can be, absolutely, with where RPI is. It is really difficult to predict. Some ground rents can grow very rapidly, which puts people in financial difficulty. From the lenders’ perspective, when underwriting a mortgage, they need to consider whether the mortgage is affordable on the face of it not only today, but in the future, and to take account of any foreseeable increases in expenditure. That is one of the areas they will take into account.
In terms of the peppercorn ground rent, yes, I do believe that that will resolve this going forward. The important thing to consider is that there is still a separate consultation, which just closed yesterday, on capping ground rent for existing leaseholders. It is really important that that is brought forward to prevent this two-tier system from developing.
Barry Gardiner
Q
Paul Broadhead: You are absolutely right. We have been advocating for the reform of leasehold since 1984. As you kindly point out, it was not me that made that comment at the time.
Barry Gardiner
That elegant comment.
Paul Broadhead: Absolutely—I wish I could be as elegant, and I will try to be throughout this questioning. Our position is that leasehold does require reform. If you were going to design the property tenure today, it is not what you would come up with. However, there are 4 million-plus leasehold properties in this country. Undoing that and replacing it overnight with a new, perhaps more just, system will take time.
The first thing we need to concentrate on is reform, to make the system fair, predictable and equitable, so that people have the security of owner-occupation. In a sense, yes, they do not own the land on which their home sits, but they have the security of tenure that they would not have in other sectors. But it is important that we ensure that that is fair.
Barry Gardiner
Q
Paul Broadhead: Are you talking particularly about shared equity or shared ownership?
Barry Gardiner
Sorry, shared ownership—where you have shared ownership in the property.
Paul Broadhead: I have not got those figures to hand, but we can certainly send those through to the Committee. From speaking to our membership, I think it is fairly comparable. Our sector punches above its weight in shared ownership because it is very keen on affordable housing, and we have some big shared-ownership lenders. One thing I would say about shared ownership is that underwriting and managing those cases are slightly different from managing a traditional mortgage, because you have the housing association interest and some potential staircasing—although, of course, many do not. The arrears levels tend to be higher, but the default levels, I think, are comparable. We can confirm that in writing.
Barry Gardiner
Q
Paul Broadhead: There are two things. One is the housing association rent aspect. Affordability tends to be more stretched by people owning shared ownership properties in any event, as most people land in shared ownership as an intermediate tenure because they are not able to buy their whole home. That, therefore, means their incomes are often less predictable. They do not necessarily always understand—
Barry Gardiner
Or that property prices are too high, of course.
Paul Broadhead: Well, property prices are too high irrespective of tenure, even if you are buying as a freeholder.
Barry Gardiner
Their income may be stable and reasonable—being in shared ownership does not mean that your income is unstable in any way.
Paul Broadhead: No, not at all.
Andy Carter
Q
Paul Broadhead: Certainly. The first thing to remember is that mortgage lenders are experts in mortgage lending, not in property law—it is down to the conveyancer to advise the borrower of the requirements of the lease and the purchase of the property they are buying. The way I would describe it is that the conveyancer and the surveyor, to an extent, are the lender’s eyes and ears on the ground to ensure all of that is clear to the borrower, and that they are entering into that transaction with their eyes open.
What we have seen from a mortgage lender’s perspective, particularly when the escalating ground rent issue started to come to a head, was lenders taking a much more proactive approach on new developments to understand the terms of some of those leases, and actually refusing to lend on those new developments. Of course, there are a whole range of mortgage lenders that will lend on a new development, but the fact is that a new development without some of those large lenders—because they will not lend against that leasehold—drives change. That is what we have seen. We have seen the effect of that with the escalating ground rent—with the reduction of that.
Andy Carter
Q
Paul Broadhead: They will tell them that it is a leasehold property. It may not be known when the customer comes in to apply for the mortgage, because that will come out through the conveyancing process, and often when the property is advertised it does not make clear whether it is a leasehold or a freehold property. But that will be dealt with and it will be made very clear in the terms and conditions of the mortgage what that tenure is.
What we have seen is that some of our members have turned down mortgages because they have come across onerous lease conditions, and the consumer, the prospective purchaser, has then complained to say, “I can afford this mortgage. Why have you turned me down?” When the lender has explained to them what they know—there is this asymmetry of information—the consumer, with what they then know about the terms of the lease, has pulled out of the transaction because they did not realise that before. I think the most important thing with leasehold is not necessarily more information, because you need experts to look at that information, and too much information is often as bad as too little information; it is more about making sure that the right information is given to the right person at the right time.
Andy Carter
Q
Paul Broadhead: Yes, we believe that managing agents should be regulated. We think the fees—where the service charges money is spent—should be made clear to the borrower. I think that, at the very minimum, short of regulation, they should be forced to be a member of an alternative dispute resolution scheme.
Mike Amesbury
Q
Paul Broadhead: There have been well-documented issues about building safety post the Grenfell tragedy. We did see some real difficulty about people being able to get mortgages where there was cladding on the building. Progress has been made there. I think that now, in most cases—particularly above 11 metres, as you suggest—the market is open, because it is clear that there is recourse to either the developer or the Government scheme to fund the work. Our starting position, when this came out with the amended Government guidance note in 2020, was that no leaseholders should be responsible for making good the combustible cladding, if it was now inappropriate, because they have gone into this, they have been advised by their legal advisers, and they should not be forced to put their hand in their pocket.
We are not there yet on properties below 11 metres, because the Government have chosen to exclude them from the support scheme. I have had a number of meetings with consumer groups, looking at cladding and at leasehold, and I think we are on the same page here. We are trying to find a solution from a mortgage-lending perspective, because we want that market to open up, but what seems to be more and more frequently coming out is that the cladding issues and other building safety issues are being conflated. It is really difficult then from a mortgage lender’s perspective, because if the cladding itself does not need replacing because it is safe, but there are other defects in there, there may still be some comeback that leaves leaseholders with quite a large unexpected bill that is at the moment unquantified and would affect the affordability of that borrower, going forward. We continue to meet with these groups and with Government to seek a solution, but it certainly is not operating perfectly.
Mike Amesbury
Q
Paul Broadhead: Yes. Anything that makes it clearer and gives lenders confidence and consumers confidence that their building is safe and they are not going to face an unexpected bill has to be welcome.
Eddie Hughes (Walsall North) (Con)
Q
Paul Broadhead: Well, often the advert will say that a property is leasehold but that that will be confirmed by the conveyancer, so you do not know 100% whether it is leasehold or what the terms of the lease are.
Eddie Hughes
Q
Paul Broadhead: Not to my knowledge, no. I do not think there is.
Eddie Hughes
Q
Paul Broadhead: In terms of the peppercorn rate, it is a really difficult question, because it is almost, “How long is a piece of string?”
Eddie Hughes
Q
Paul Broadhead: I still think it would take decades to unwind everything to a peppercorn rate, because you need the group of leaseholders together to agree to enfranchise, which is quite difficult. I will give you one example we have come across, which was following the escalating ground rents. Housebuilders had written out to leaseholders and said, “We will convert your property to leasehold for free. We are going back on what we’ve done; we think we did the wrong thing.” The number of people coming forward and taking that up was negligible. You need to engage consumers. It is not just about putting the building blocks in place to make this better; it is enabling—
Eddie Hughes
Q
Paul Broadhead: Absolutely, and you still need to engage the public and the legal profession that is taking people through, to make sure they understand what the benefits are and the cost of that. That individual value equation will change from leaseholder to leaseholder.
The Chair
We have five minutes left. I will turn to Lee Rowley but please bear in mind that I want to bring in Barry as well.
The Minister for Housing, Planning and Building Safety (Lee Rowley)
Q
Paul Broadhead: That is absolutely an accepted position. The point I think you are getting to is that sometimes there is still an EWS1 form requested on sub-11 metre buildings. As I mentioned earlier, the lender is the expert in mortgage lending, not in building safety, and the surveyor on the ground will have their own gangs from the Royal Institution of Chartered Surveyors that they follow. If they come back and report that it needs further investigation, the lender has to take that at face value, because that is their expert.
Lee Rowley
I am not sure that I would accept that, but I will take that up with you and your members separately.
Barry Gardiner
Q
Paul Broadhead: Parliamentary privilege notwithstanding, no, we do not have individual organisations I could point to. I certainly do not get reports from my members.
Barry Gardiner
Q
Paul Broadhead: In terms of coming back to me as an association, that is a level of detail that is about individual organisations. It is not really part of my role to represent that. That does not mean they ignore that, just to be clear.
Barry Gardiner
Q
Paul Broadhead: Our members will not advise; they will refuse that mortgage, because it does not meet with their policy. In terms of other service charges, they all have a panel of conveyancers that they approve to act for them, and that is for the consumer purchasing that property. The terms of those panels change as some of these practices have come to light, and they will be nipped in the bud at that point.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions and, indeed, for this morning’s sitting. I thank all our witnesses on behalf of the Committee for their evidence. The Committee will meet again at 2 pm this afternoon here in the Boothroyd Room to continue taking oral evidence.
Leasehold and Freehold Reform Bill (Fourth sitting)
Thursday 18th January 2024
(3 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Leasehold and Freehold Reform Bill 2023-24 View all Leasehold and Freehold Reform Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 January 2024 - (18 Jan 2024)
The Chair
We will now hear oral evidence from our fourth panel. The witnesses are George Lusty, senior director for consumer protection, and Simon Jones, director of leasehold investigation at the Competition and Markets Authority. We have until 2.20 pm for this panel. Will the witnesses please introduce themselves for the record?
George Lusty: Good afternoon. I am George Lusty. I am the senior director for consumer protection at the Competition and Markets Authority.
Simon Jones: Afternoon. I am Simon Jones. I am a project director at the CMA and I was responsible for our leasehold investigation.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
Gentlemen, thank you for coming in to give evidence to us. I have two questions. First, in the 2020 update report on leasehold housing that the CMA published, you recommended reforms to
“the system of redress for leaseholders, to make it simpler and less costly for them to contest permission fees and service charges they think are unreasonable or excessive”.
What are your views on whether you think the Bill achieves that? If not, what needs to be incorporated to ensure that it does?
My second question is on the recommendations you also made on measures to address the assured tenancy trap, whereby leaseholders who pay ground rents in excess of £1,000 in London and £250 across the rest of the country
“risk having their home repossessed for non-payment”.
Again, does the Bill address that? If not, how specifically should we seek to improve it in that respect?
Simon Jones: I will deal with the second one first. Yes, we think that the proposals in the Bill at the moment will make a big difference. We thought that there were a number of ways to go about helping people: you could have created a duration threshold for leases, as in the current proposal—that works. You could have raised the threshold for rent. That, too, would work, although we would have been less in favour of it, because over time it would be less effective. Or you could have completely removed the provisions from the Housing Act. The approach that the Department has taken seems sensible.
Matthew Pennycook
Q
Simon Jones: That is on the second point. There are a number of ways to do it, but the problem was that there was no minimum length of lease that was not subject to the assured tenancy provisions. That just looked like an oversight, frankly, but that is going to be fixed. That seems like a positive step forward to us.
On redress, the problem that everybody told us about is that you can give leaseholders all the rights that you can, but that does not really help them if they cannot exercise them quickly, cheaply and efficiently. One of the problems—as you know, a big complaint people had—was that leases often had provisions that enabled landlords to recover the costs of litigation from the tenant, regardless of whether the landlord won or lost. That was a big problem, but that has been fixed.
Matthew Pennycook
Q
Simon Jones: I think that the proposal in the Bill is a positive change, but is it really all the change that could be made? This is quite difficult. The tribunal system exists to help leaseholders, but it is still complicated and expensive, and it is not local. Many of the disputes that we have are about costs.
For example, let us say you are a tenant and you have a service charge, but you think it is expensive. You will incur time and expense in trying to challenge it. What you want is probably something that is local, where the panel understands the costs in that area—for painting a stairwell or changing lights, that kind of thing. What we had in mind when we wrote the report was perhaps finding a way to use more local courts to provide more summary-type justice for people, through people who probably know more about what it costs in the local area to do something.
The other problem for consumers is that they do not understand what evidence is required to bring a challenge. I think that came through quite strongly for us. You cannot fix that with legislation, but it is another important point to bear in mind when thinking about how to help consumers help themselves.
Matthew Pennycook
Q
Simon Jones: If the purpose of all this is that the incentive for managing agents or landlords—whoever is responsible—is not to overcharge, then cost rules that encourage them to be more careful with the charges that they make ought to be advantageous.
The Chair
I remind the Committee that we have only another 10 minutes or so left on this session.
Andy Carter (Warrington South) (Con)
Q
George Lusty: I will take this one. As you say, we have used our consumer law enforcement powers directly. Ultimately, we are prepared to take developers, and in some cases the freehold investors, to court if these problems have not been fixed. Doing that has secured direct outcomes for the affected people we acted on behalf of, including getting those unfair doubling terms taken out of their contracts and giving financial support to make sure that that is reflected in the paperwork.
We need to look at a number of things together. It is about not just what is in this Bill but what the Leasehold Reform (Ground Rent) Act 2022 did in terms of setting the leases for future properties at a peppercorn ground rent, and the proposed ban on leasehold houses. In particular, that takes away a number of the things that were liable to mislead.
There is the separate consultation that closed yesterday on proposals to cap existing ground rents. That is another thing that we are very keen to support, because our action benefited the 20,000 or so householders on whose behalf we took cases, but ultimately we said that only a legislative solution could fix the problem for people with existing leases with problematic ground rent increase mechanisms.
Andy Carter
Q
George Lusty: Ultimately, we were not able to pursue every case that was brought to us. We brought a separate action in which we secured redress from Persimmon in particular, allowing people to buy their freeholds for an agreed amount. Our case decisions ultimately turn on the evidence and whether we think we can successfully achieve an outcome and as broad an impact as we can on the big issue.
Something went badly wrong with the sale of leasehold homes, particularly with the modern concept of leasehold that started in the early noughties. One of the biggest aspects of that was the selling of houses as leasehold when there was no real, legitimate reason to do so. The proposal to include in this legislation a ban on leasehold houses tackles one of the worst instances of mis-selling, and the problem that people were told that leasehold was as good as or effectively freehold when it was not.
Andy Carter
Or they were not told at all. That seems to be more the problem: people were not told at all.
George Lusty: Yes.
Simon Jones: May I add to George’s observation? One thing that we recommended—Lord Greenhalgh picked this up and worked on it with trading standards—was that there should be greater transparency around tenure and the annual cost of owning a property whenever a property is marketed, so that when you look at it, read the spec and see what the purchase price is, you also see what it will cost you every year to own it. In the end, that is what people are trying to figure out whether they can afford. Lord Greenhalgh picked that up, and work has been done with trading standards to move that forward, but momentum needs to be maintained behind it.
Think about the disadvantages that people have with leasehold. You have to pay rent and ground rent; if the Government cap that, that is probably fixed for your constituents. If there is greater transparency around service charges and a system of redress that probably conditions the ability of people to overcharge, that is a big step forward. More generally, there needs to be greater transparency right at the start of the sales process about what you are buying and how much it will cost you. Those things would make a big difference if they all were to happen to your constituents.
Mike Amesbury (Weaver Vale) (Lab)
Q
George Lusty: In parallel to this piece of work on leasehold property, the CMA is conducting a market study looking at the house building sector more generally. As part of that, we have looked at the issue of estate charges, the increasing tendency for roads and other facilities not to be adopted, and the framework of consumer protections around charging for those sorts of services and what individual homeowners then need to pick up not being as good as it should.
We published a working paper on that in November. In particular, we called more broadly for greater adoption of those facilities by local authorities and enhanced consumer protection frameworks. That market study will complete its report in February, when we will issue our findings and recommendations across the piece. Neither Simon nor I is directly working on that, but it is connected because leaseholders face similar issues with the service charges that they have to pay in their properties, particularly in leasehold flat blocks.
Mike Amesbury
Q
Simon Jones: Only the transparency obligations that I mentioned. The initial transparency obligations about the annual cost of owning a home ought to include, in relation to freehold homes, things such as rent charges. An awful lot of people we spoke to had no idea that there could be annual charges connected to a freehold ownership.
Richard Fuller
Q
I know that you are going to get to your final report in February. This Bill, helpfully in some ways, seeks to plug some of those gaps in the protection of people who own homes, but would it not be better for us to ban the lack of adoption right at the start? Should we not go to the source and find a solution as to why councils and housing estate developers are ripping off my constituents, and I am sure many others, who own their own homes? What can be done about that in this Bill?
George Lusty: Again, in our November working paper, we pointed to that very issue of there not being enough adoption by local authorities of those facilities. We put forward possible ways for that to be fixed, either through more mandatory adoption of those amenities or through some common adoptable standards that could be followed to inform the types of amenity that were suitable for adoption more broadly. As I say, we have not issued our final recommendations, but we have already said something about the options that might be available if there was a desire to try to tackle that now.
Richard Fuller
Q
George Lusty indicated assent.
The Chair
Thank you. A very quick question with a very quick answer, please. Barry Gardiner.
Barry Gardiner (Brent North) (Lab)
Q
“It is a real concern that homeowners who have entered into a lease are captive consumers with very little influence over the costs incurred by landlords or their managing agents that will in due course be passed on to them.”
Do you believe that the Bill will give them control or simply greater transparency and access to understand their own exploitation, and has the CMA come across any comparable part of the economy where those paying the bills have no control over the bill or the standard of service?
George Lusty: It is worth saying at the outset that we approached our leasehold investigation primarily from the framework of consumer protection law, looking at instances of mis-selling and unfair contract terms. We cannot use consumer law—
Barry Gardiner
Q
Simon Jones: You are absolutely right. We think the captive consumer problem is a real problem. We spoke to a lot of people about what the solution might be. There was not an obvious solution, but we did think that if there were better redress mechanisms, that would at least help.
Barry Gardiner
Q
Simon Jones: You have choice about the property you buy, but if you buy a leasehold property—
The Chair
Order. I do apologise, but that brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses very much on behalf of the Committee.
Examination of Witness
James Vitali gave evidence.
The Chair
We will hear oral evidence from James Vitali, head of political economy at Policy Exchange. For this session, we have until 2.40 pm. Could you please introduce yourself for the record?
James Vitali: Thank you very much for inviting me to give evidence. My name is James Vitali. I am head of political economy at the think-tank Policy Exchange. I work on a number of areas, including economics, housing and regulatory reform. By way of quick background, I recently authored a paper entitled “The Property Owning Democracy” in which I argue for the value socially and economically of property ownership, both for democracy and capitalism. I specifically address leasehold reform in that as part of the broader question. My main interest in the Bill is the enfranchisement process.
Andy Carter
Q
James Vitali: Yes. The first point to make is that I think leasehold is effectively a simulation of ownership. Imagine that ownership comes as a sort of package of rights and responsibilities; leaseholders lack many of those rights and responsibilities. The Bill will make meaningful improvements to the situation of leaseholders, but there are some practical improvements that could be made to the Bill to give practical effect to its intent.
Andy Carter
Could you expand on that?
James Vitali: Of course. There are a couple of things in particular. One has been raised already by Mr Gardiner in the evidence sessions and concerns mixed-use buildings. I think it is great that the threshold is being increased to 50%. That will bring a lot of leaseholders into the scope of potential enfranchisement. But as it stands, there is a provision in the Leasehold Reform, Housing and Urban Development Act 1993 concerning structural dependency rules—shared plant rooms and things like that.
Effectively, as it stands, the provisions in that Act disqualify people who get to the threshold but share service and plant rooms with a commercial unit in the building. That section in the 1993 Act should just be removed. There is already a framework for co-operation between commercial units and residential units in mixed buildings when it comes to services. It should be relatively straightforward to create a framework for co-operation with the Bill.
Barry Gardiner
Q
James Vitali: Yes, I quite agree. One of the cases I make in the paper I mentioned is that not only is ownership becoming more concentrated in a narrow stratum of society, but the type of ownership we are offering the aspirant is being thinned out. You were just listening to the suggestion that leasehold is almost mis-sold to consumers. I think aspirant property owners are being mis-sold when it comes to leasehold. They think they are buying into a genuine form of property ownership, but in many ways, as I said at the start, they lack the rights and responsibilities that should come with an ownership tenure, so I completely agree.
Barry Gardiner
Q
James Vitali: Yes, charges should be connected to the provision of a service, so I think ground rents should be reduced to a peppercorn. Charges should be made through this new and very sensible regime that is being proposed in the Bill for how charges are requested and demanded.
Barry Gardiner
Q
James Vitali: I think the key here is whether the leaseholder has a choice in who is providing the service and what service they are providing. Any functioning free market is based on strong property rights and competition. The key here is giving existing leaseholders greater choice over who is managing their building and how it is being maintained, and increasingly giving them the chance to take on those responsibilities themselves.
Barry Gardiner
Thank you very much. In order to preserve both our reputations, I will not say that you agreed with me and I trust that you will not say that I agreed with you.
Richard Fuller
Q
James Vitali: I think a lot of the reforms proposed in this Bill are an attempt to reflect better the fact that when the leaseholder purchases the leasehold, they are acquiring the majority value of the asset. In market terms, sure, I suppose marriage value is significant and substantive, but as it stands it seems to me that a leaseholder acquires the majority of the value of an asset when they acquire the leasehold, and that is slowly eroded. I think that is the thing that is wrong in the process.
Richard Fuller
Q
James Vitali: Tricky question. If you were to acquire some property that you have genuine rights and responsibilities for the management of, the ability to benefit from in the future and the ability to control, then that form of property would be greater than if you were subject to charges and ground rent. On the point about the £1.9 billion transfer value from freeholders to leaseholders, I did take a cursory look at the impact assessment. I do think that is a legitimate decision for you as parliamentarians to make about 10-year property rights in the UK. I think it is justified.
Richard Fuller
Q
James Vitali: I think that is where the dividing line lies between you and Mr Gardiner, and perhaps you and I and Mr Gardiner.
Richard Fuller
Oh, it is much wider than that.
James Vitali: Indeed. I think a balancing act needs to be struck in this Bill between spreading genuine property rights more widely and compensating those existing freeholders. If you seek to diffuse property ownership, but in the process undermine or dilute property rights, you are undermining the thing that you are trying to spread more evenly. That is a technical question for the way that you finesse this Bill, but I do not think it is a substantive issue with the desire to give leaseholders greater control and rights over their property.
Barry Gardiner
Q
James Vitali indicated assent.
Barry Gardiner
Q
James Vitali: I will deflect and answer a slightly different question. It is interesting that the leaseholder enfranchisement process is kind of redolent of and similar to right to buy, in that it is a no-fault compulsory purchase of an asset. The difference with right to buy is that compensating the state is a different consideration from private citizens who have property rights. All I would say is I think it is important that the compensation mechanisms in the Bill are such that it does not feel like the things we are trying to spread more equitably—property rights—are being diluted by the state.
Andy Carter
Q
James Vitali: Delighted to. That is probably the thing that I have been thinking about the most in terms of the implications of the Bill. I understand that there is an intention for a ban on leasehold houses to come forward on Report. One thing that I am really worried about is that what will effectively be created is a two-tier system of housing or tenure types in this country, between the countryside and our cities. It is very possible, if we deal with houses and not the tenures for flats, that we will create secure, authentic property rights outside of our urban areas and create in our urban areas a slightly more precarious, maybe outdated type of tenure.
As it stands, that has not been given enough consideration, because it also does not conform with the Government’s wider strategy on housing, which, broadly speaking, is to densify our urban areas and increase housing supply in our cities. There are political considerations around why they are doing that—it is a lot more deliverable to focus on the densification of cities—but there are very good economic reasons for that too: the agglomeration effects of building housing supply in a city are greater than elsewhere. We need to incentivise people living in flats in dense cities, and if we deal with leasehold as it pertains to houses, not flats, it will work against the Government’s quite legitimate and justified broader housing strategy.
Andy Carter
So your solution is to deal with houses and flats.
James Vitali: It seems to me that commonhold is broadly out of the scope of the Bill now. It would be my gentle encouragement that some incentives be included in the Bill for the take-up of commonhold. The Law Commission individual who came on Tuesday said that it is very complicated and there are lots of unintended consequences that need to be taken into account, but I think some small incentives—for example, on mixed use and the threshold for conversion—could be introduced, which might incentivise the take-up of commonhold. But before that I think it should be considered whether new leaseholds come with a share of the freehold. That would be a sensible, deliverable addition to the Bill, and it would deal with the problem that I outlined of a two-tier housing market.
Barry Gardiner
Q
James Vitali: I have not given that too much thought, I must say; 50% seems absolutely reasonable. I think there are some practical issues in getting to that 50% threshold in itself. I have heard stories about the process by which leaseholders whip around the building trying to get together enough—
Barry Gardiner
Q
James Vitali: I must say that I have not given that a lot of thought. I think increasing it to 50% will have a significant effect itself, but you may wish to go further.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witness very much on the Committee’s behalf.
Examination of Witnesses
Philip Freedman CBE KC (Hon) and Philip Rainey KC gave evidence.
The Chair
Q
Philip Rainey: I am Philip Rainey KC. I am a barrister in private practice at Tanfield Chambers and, among other things, I have specialised in leasehold enfranchisement and service charges and so forth for probably 20 or 25 years.
The Chair
It is not very helpful when you are both called Philip—Philip Freedman.
Philip Freedman: I am Philip Freedman. I am a solicitor and therefore only an honorary KC. I am a member of the Law Society’s conveyancing and land law committee. I am a member of the Commonhold Council. I am a consultant at Mishcon de Reya, and was a senior property partner there for many years. We act for both landlords and tenants, investors, pension funds, right-to-manage people and all sorts of people who have a vested interest in the different sides of these issues.
My wife and I live in a flat. We are leaseholders. It is a block that was enfranchised under the right of first refusal under the Landlord and Tenant Act 1987, when the developer wanted to sell the building. I am one of about five people out of about 75 people who are actually interested in participating in the running of the block. We have about 52 flats, and if you take everybody, including husbands and wives, there are about 72 people who could potentially be directors participating in the landlord company, and only about five of us are interested in doing so.
The Chair
Thank you.
Philip Freedman: May I add one thing? You may have received a briefing on the Bill from the Law Society. I have been asked to tell you about a small correction to it. May I do that?
The Chair
You may.
Philip Freedman: The parliamentary briefing from the Law Society refers in the summary to the issue of new leasehold houses and urges that the Law Commission’s proposals for land obligations should be enacted—it says to enable “flats” to be sold as freehold. That should be “houses”. The law about positive obligations under leases, as distinct from under freeholds, indicates that leases are much better in relation to enforcement than freeholds at the moment, and it would very much help if freehold law was upgraded so that the obligations on positive matters such as performing services and paying for services could be brought into line, so that freehold is as least as effective as leasehold. This is a case where freehold is not as effective as leasehold.
The Chair
Thank you. I remind the Committee that we have until 3.10 pm for this session.
Matthew Pennycook
Q
The Law Society has expressed concern that the provisions in clause 12 designed to protect most but not all leaseholders from non-litigation costs that landlords may incur when responding to an enfranchisement or lease extension claim may cause issues, because under the proposed new valuation method, the price payable may be below full open market value. Could you clarify why you believe that to be the case? The standard valuation method in schedule 5 provides for a market value element. Why does the Law Society believe that it does not represent full open market values?
Philip Freedman: This started with the Law Society’s recommendation to the Law Commission that one thing that might save costs for leaseholders was if they did not have to pay the landlord’s costs on a collective enfranchisement or lease extension. We put forward the view that if the enfranchisement price is market value, then each side should bear its own costs. If you were to buy a house, you would not pay the seller’s costs; each party would pay their own costs. That is what happens in the market. We said that in the context of enfranchisement being at market value. The Law Commission took that on board, and its report very clearly says that its recommendation that each side should pay some costs and tenants should not have to pay the landlord’s costs—
Matthew Pennycook
Q
Philip Freedman: Because the suggested notional capping of ground rent at 0.1%, in many cases, where it applies, will reduce the purchase price below what it is in the open market at the moment. At the moment, in the open market, the ground rent stated in the lease is payable. We are aware that there are proposals for retrospective legislation, as one might call it, to interfere with existing leases and to say that the ground rent should be capped at a certain amount, but at the moment those rents are lawful, and those rents are therefore reflected in the price that someone would pay to buy the flow of ground rent. Therefore, if you assessed the purchase price for the enfranchisement as if the ground rent were capped and would not be as much as it actually would, then you would be reducing the purchase price to below the market price.
Matthew Pennycook
Q
I have a second question, relating to clause 59, which concerns regulation of remedies for arrears of rentcharges. Do you agree with my view that the Government are trying to fix a historical law that is essentially beyond repair? Should we be looking to abolish section 121 of the Law of Property Act 1925?
Philip Freedman: I think yes. I had to draft some rentcharge provisions many years ago, when we were acting for clients who were selling some industrial buildings on a new estate. They wanted to sell them freehold. There was no commonhold at that time and the issue of enforcing positive covenants was difficult. We came up with the suggestion that the rentcharges legislation should be used to allow an estate company to collect service charges, maintain drainage systems and so forth. It was agreed that the Law of Property Act gave excessive remedies to landlords for non-payment. I am all in favour of limiting the remedies so that, if someone does not pay for something, they can be sued for it, just as with the amendment in relation to forfeiture. It seems to me—this is my personal view—that limiting forfeiture, as you have proposed doing through your amendment, is the right thing to do, although I do have three points to make on that.
Matthew Pennycook
Q
Philip Rainey: I agree that forfeiture for non-payment of a rentcharge on an estate, which is usually a relatively small sum of money, is a sledgehammer to crack a nut. I would be in favour of replacing section 121 rather than repealing it, so that there is a coherent and measured set of remedies for rentcharges. That is bearing in mind, as Philip just said, that a lot of the estate rentcharges covered by that legislation have nothing to do with residential; they are quite common on industrial estates. That is one of the unintended consequences that might occur if you were simply to repeal section 121.
Matthew Pennycook
Q
I have one quick final question on the abolition of forfeiture. Would you agree that we should do away with forfeiture entirely—it sounds like you do—on the grounds that it is a wholly disproportionate response to the breach of a lease? If so, what should we replace it with? Is suing for a debt—as happens with any other debt—and an injunction if the breach relates to conduct a sufficient response or, if we abolish forfeiture, should we be looking to replace it with some other system of recompense?
Philip Freedman: My view is that there are three aspects of the proposed abolition of forfeiture for leasehold dwellings that we should look at. One is that it should apply to individual leases of single dwellings, rather like the ground rent abolition; it should not apply to leases of multiple dwellings, such as a lease of 50 flats to some lettings company, which is a commercial enterprise, effectively. It should apply to leases of individual dwellings granted at a premium.
The other thing is that the threat of forfeiture is over the top in relation to financial debt—arrears of rent, service charges or whatever. You can sue for those. There may be refinements in relation to suing, but basically you can sue for them. But if a tenant has knocked down walls that they should not have, caused a nuisance or annoyance to other tenants in the building, or used the property for some unlawful purpose, then the remedy would be to threaten an injunction, as you have indicated. An injunction is a difficult remedy to enforce: it is very costly and it is at the discretion of the court—there are all sort of hurdles about injunctions. If, in the residential sector, the first-tier tribunal was given the power and jurisdiction to order parties to a lease to comply with the terms of the lease, free from the constraints of existing law in relation to injunctions, then one could avoid the need for forfeiture. Removing forfeiture for financial payments and damages is fine, but for other breaches it presents a problem.
The only other point is that we need to look at section 153 of the 1925 Act, which is the right for tenants, if they have a very long lease, do not pay any ground rent—it is a peppercorn—and are not susceptible to forfeiture, to enlarge into the freehold. That is a whole area of unclear law. It is not clear what the effect would be if you had one tenant in a block who declares that he now owns the freehold; it would be very unclear whether the management of the block would be affected. I think these things need to be addressed if one is going along that line with regard to forfeiture.
Philip Rainey: Because I appreciate that we have limited time to answer, the only thing I would add is that forfeiture is arguably, again, a sledgehammer to crack a nut, but so can be an injunction: the remedy for breach of an injunction is essentially committal to prison. The prospect of not being able to forfeit and instead there being rafts of committal applications to fill up the jails with people who are, for whatever reason, refusing to comply with some kind of covenant—that is very annoying, but ultimately they should not be in prison—is also unattractive.
Ultimately, there needs to be some sort of measured method of removing a problem tenant from a block. We very much concentrate on the position of landlords against tenants, but one very difficult tenant in a block can ruin life for everybody else. The Law Commission proposed a replacement scheme, and I suggest that that should be dusted off and looked at. A lot of the objections to it come from the commercial sector, so bring it into force for residential leasehold first.
Richard Fuller
Q
Philip Rainey: In a sense, that is a conceptual question.
Richard Fuller
You are a lawyer.
Philip Rainey: Yes, and one tends to avoid the philosophical points. Clearly, from a legal perspective the Bill interferes in an extremely significant way with property rights. Whether that is the right thing to do is a value judgment.
One thing that is sometimes overlooked—I am not defending the leasehold system; I am on record as being in favour of commonhold, which is inherently a more satisfactory system for holding flats—is that a lot of people will be disappointed when commonhold comes in. They will still find that they are not allowed to remove the supporting walls in their flat or to have a noisy party on a Friday night, because their neighbours do not want that. A lot of the things you find in leases and the restrictions when living in flats are because, if you live communally in a block of flats, you owe duties to your neighbours. There are responsibilities, in communal living, that do not apply if you live in a small house in a field, 500 yards from your neighbours. The restrictions in the leasehold system are not as unique to leasehold as you might think; I would suggest otherwise. To go back to your basic point, clearly the Bill alters property rights. It is a value judgment as to whether that is the right thing to do.
Philip Freedman: I have heard a number of cases where the property industry is concerned about the transfer of value that will be effected by capping ground rents, removing marriage value and so on, in relation not just to the benefit to leaseholders but to the burden on those landlords that are pension funds and other organisations that will find that they are deprived of rental income that they have banked on and have thought will be reliable income over many years. They bought leases that were perfectly lawful, were not, so far as one can tell, entered into under any mis-selling, and the provisions for the ground rent are not necessarily unconscionable; the ground rents were invested in in good faith.
We must not lose sight of the fact that if there are winners, there are always losers. Some provisions of the Bill, which are fine, are to say that if the tenants are enfranchising, they do not have to buy the commercial bits of the building. Those can be left with the landlord under a leaseback, and therefore the value remains with the landlord. Both parties win: the landlord keeps the value and the tenants do not have to pay as much money. But where you are transferring value, there is always a loser, and there are lots of investors who appear to have bought in good faith and were not expecting retrospective legislation. Lawyers always do not like retrospective legislation. It is up to Parliament to decide whether the social benefit is sufficient to outweigh the concern about pension funds, and so on, that have invested in ground rents. The Law Society does not take sides between landlords and tenants, or different types of clients. We just want to make sure that Parliament focuses on the issue and makes the decision in the public interest.
Barry Gardiner
Q
Philip Rainey: Yes. In a sense, that is the downside. It is possible to create what you might call commonhold-lite. It is a leasehold system—it is so encrusted with restrictions and requirements, although you own the freehold, that it is very similar. It would be only a staging post, because one of the problems with the current system is that it creates a “them and us” situation. You see it even when tenants own the freehold. Somehow they still think, “Well, it’s ‘my’ lease and it’s ‘them’”, which is them under another hat as the freeholder. Commonhold should eliminate that.
Barry Gardiner
Q
Philip Rainey: If you go to Australia and look at the websites, you find “I hate my strata” websites. Neighbours will be neighbours.
Barry Gardiner
Unfortunately, legislation cannot make your neighbours more considerate. I often wish it could.
Philip Rainey: I think I would be inclined to agree that it would be a reasonable step forward to say that there should be a share of freehold with—
Barry Gardiner
Any new build.
Philip Rainey: With new build. You would have to have rules.
Barry Gardiner
Q
That is something that I hope we very much want to protect, because these leaseholders really require the protection of a court-appointed manager. However, the Building Safety Act 2022 bars the court-appointed manager from being an accountable person and from taking full responsibility for the necessary safety remediation works. That responsibility under the BSA ’22 regulations is now being given, in effect, to the one person whose track record shows that they are incapable and not to be trusted to perform the obligations of managing that building—namely, the freeholder who let it go to rack and ruin in the first place. The leaseholders, whom the courts sort to protect, will have that former, negligent freeholder back in charge. I do not know, but I am looking to you to tell us, how one might draft an amendment to the Bill to preserve the protection for leaseholders who find themselves in an incredibly invidious position.
Philip Rainey: The first thing to say is that—as you may know—there is an ongoing piece of litigation, in which I am involved, where that question of whether a manager can be an accountable person is yet to be finally decided. The current position is that the first-tier tribunal has decided that the manager cannot be an accountable person. I therefore cannot comment on that outcome.
Barry Gardiner
I was aware that you were involved in the case, but I did not want to drag you into the specific—I wanted to keep you at the general.
Philip Rainey: If, hypothetically speaking, the law is that a manager cannot be an accountable person; if, hypothetically speaking, that restricts what a manager can do; and if you, as Parliament, wished to alter that position, then you would amend the definition of a relevant repairing obligation in section 72 of the Building Safety Act 2022. That amendment would make it clear that a relevant repairing obligation includes an obligation under a manager order under section 24 of the Landlord and Tenant Act 1987.
Barry Gardiner
Q
Philip Rainey: The obvious answer is that you are Parliament—you can change any law.
Barry Gardiner
Q
Philip Rainey: I could, if asked. As I say, you can amend section 72 to change a particular definition. Arguably at least, subject to the regulations, it is not actually necessary for Parliament to do it, because section 72 has a power for the Secretary of State to amend it—it is a Henry VIII clause, which I am not very much in favour of, but that probably could be done by secondary legislation.
Barry Gardiner
I have no doubt that the Secretary of State could do that, but I always feel more comfortable if things are on the face of the Bill.
Philip Rainey: I respectfully agree.
Barry Gardiner
Q
Philip Rainey: The just and convenient test is effectively an equitable test. It is a very flexible test intended to allow the first-tier tribunal to take into account all of the circumstances and, in layman’s terms, to decide whether something is just, fair, convenient and going to work—the rights and wrongs and the practicalities of it. Because of the ongoing case, I do not think I can answer the second part of the question, as to how the Building Safety Act 2022 might have affected that.
Barry Gardiner
I am sure hon. Members can ponder on your words and work it out from there. Thank you; that is really helpful.
Eddie Hughes (Walsall North) (Con)
Q
Philip Freedman: I am afraid that I cannot give you the answer to that. because I am not directly acting for those particular clients. I am afraid I know no more—
Eddie Hughes
You do not have a view. We will not take your professional—
Philip Freedman: I can completely understand that pension funds have invested in part in long-term income that they believed to be secure when they did it—that is, income for 90 years, 990 years or whatever it was going to be. I am told that a number of pension funds and other types of investment entity have invested cautiously, not necessarily buying portfolios where there are hugely escalating ground rents, but either fixed ground rents or modestly increasing ground rents that people would not say were egregious. However, they are still concerned because, in many parts of the country, particularly in the north-east, for example, property prices are so low that even 0.1%—even 1,000th of the price of a flat—would reduce the ground rent. The ground rent might be £100 a year or something, but the cap would result in it being £50 a year or something like that. Obviously, the impact would be great for those portfolios that have hundreds or thousands of these.
Mike Amesbury
Q
Philip Freedman: The Law Society has been participating in various working groups following Lord Best’s report, trying to help with the preparation of codes of practice that were intended to sit underneath the regulatory framework for property agents of different types, whether selling agents, managing agents or whatever. We feel that, because tenants often do not know what their rights are, and if they did know what their rights were, they may not want to spend the time or money getting someone to help them enforce their rights, you come back to the people actually doing the management. They need to be proactively willing to be transparent, and to realise that they have duties to the tenants as well as to the landlord. It needs a mindset change in the people who are doing the management. You do not want to rely on tenants having to try and find out what their rights are and then enforcing them. We feel, therefore, that a lot of the changes in the Bill, and other changes that have been talked about, will be better achieved if property managers are regulated, and that the right people with the right tuition being told what their duties are would be improved by regulation.
The Minister for Housing, Planning and Building Safety (Lee Rowley)
Q
Philip Freedman: It was one of the two partners in the firm I had been speaking to. Also, I have heard that various other bodies, like the British Property Federation, have been looking into these issues, and there has been a certain amount of it in the property press. It is only general awareness; I do not know any specifics.
The Chair
Thank you very much. That brings us to the end of this panel. May I thank the witnesses very much for their evidence? We will now move on to the next panel.
Examination of Witness
Jack Spearman gave evidence.
The Chair
We will now hear oral evidence from our seventh panel. Jack Spearman is chair of leasehold reform at the Residential Freehold Association. For this session, we have until 3.30 pm. Could the witness please introduce himself for the record?
Jack Spearman: Good afternoon. My name is Jack Spearman. I am from the Residential Freehold Association. We are a representative organisation for the UK’s largest professional freeholders. Our members represent, or have management over, about 1 million leasehold properties in England and Wales. I chair the British Property Federation’s committee on leasehold reform. I am also a director at Long Harbour, which is a regulated investment manager, and we have invested in residential freeholds.
Matthew Pennycook
Q
Jack Spearman: Each lease will set out the terms of what can and cannot happen under that lease, so when people talk about changing terms, you have to be quite careful about what you are actually saying. The rent is set as a rent and a review is set as a review, so you cannot just change rent arbitrarily—the same as for service charge and many other things. I think what you are talking about is some of the aspects that are frustrating, whether it enfranchisement or lease extensions. It will probably surprise a number of you that our members do support a large number of the measures in the Bill, including a number of the amendments that you have put forward in Committee.
Matthew Pennycook
Q
“not consistent with driving fair value to the customer”.
It also found that the mean absolute value of commissions more than doubled between 2016 and 2021 for managing agents and freeholders of buildings with fire safety defects. Is it not fair to say that, again, many, if not all, of your members have benefited hugely from soaring buildings insurance premiums over recent years, so do you think the Government are entirely justified in seeking by means of clause 31 to limit their ability to charge insurance costs?
Jack Spearman: In terms of insurance premiums, they have generally all risen, for a number of reasons that you will be aware of, whether that is cost inflation, inflation generally or insurance premium tax. Let us not forget that the Government benefit from a lot of these things, and they are all rising at the same time.
What I would say is that there is merit in making sure that people who are actually providing services to administer the insurance work have some form of compensation for what they are doing. If the insurance premium was to double because there is an issue with cladding, why should someone take the benefit of that? The same could be said for remediation projects, for example, where VAT is paid. But, yes, I agree that a measured form of that would be helpful. The problem with the Bill currently is that it leaves all of that to secondary legislation, as you know. It would be helpful to see the primary legislation set out how that might work, and that is one of our recommendations.
Clearly, our members do a lot of work on insurance, whether that is administering claims, dealing with inquiries or sending out invoices to collect the insurance premium over hundreds of people—it is a job that someone has to do. It could be risk management, so telling the insurer what is on the building. You would be amazed to see how many insurers that our members deal with offer to insure a building without knowing what is on it. When we tell them what is on it and what is in it, a very different type of cover can be offered. So there is value, contrary to what people will say, although I do accept, clearly, that, like in any system, there are bad practices.
Matthew Pennycook
Q
Jack Spearman: Again, our members have always been of the view that the insurance is for the benefit of leaseholders. They provide the cover, and they provide the certificates; it is something that we have all been doing for a large number of years. So, yes, we do, and those that do not will obviously have to anyway under the FCA regulations.
Andy Carter
Q
Jack Spearman: One of the key and largest impacts of this Bill has not even been considered yet, because it has not been introduced. Some form of restriction on ground rent is going to be introduced at some point as an amendment. You are being asked to scrutinise a piece of primary legislation that does not have a number of impacts in it—for example, setting capitalisation rates, deferment rates and dealing with ground itself. So you are scrutinising something that is incomplete, and the impact of which none of us here know.
Going to the taxpayer point, the Government say that no compensation will be paid, but unfortunately they also know that that is probably not going to be compliant with the European convention on human rights. Compensation is going to have to be paid, and it is either paid by the taxpayer or the leaseholder. That is what we mean by that.
Andy Carter
Q
Jack Spearman: One hundred per cent. We actually wrote to the then Secretary of State in 2018 and asked for a voluntary code of practice, which was in the leaseholders pledge in 2019.
Andy Carter
Q
Jack Spearman: Sorry, this is back in 2018 and 2019, when we were trying to get the Government to engage and we thought that the idea of some form of regulation was better than none. We fully support the introduction of the regulation of property agents working group, and Mr Pennycook’s amendments would see measures within 24 months. I think that is a good start. But, yes, broadly, like everyone else, we are saying, “Regulate the sector.” We are all tarred by the poor actors, ultimately.
Andy Carter
Q
Jack Spearman: It is hard not to get the wrong message when the Government have said that they—
Andy Carter
Is this not the right thing to do? When you look at the practice that has been going on and the evidence that is there—the mis-selling and appalling behaviour—
Jack Spearman: I think there are two things. Where ground rents are onerous and egregious, it is hard to say that there is not an argument for legislating to deal with them. When it comes to ground rents that are not doubling more frequently than 20 years, I think that is slightly harder.
The point about investments is that, in the same week the Government announced £29 billion of investment from pension funds into UK plc, they announced a consultation that could see a value transfer of £29 billion away from UK pension funds through the ground rent consultation. The general living sector, and building houses in this country, needs capital, and that needs to come from somewhere. There were reports over the weekend from Savills, for example, that £250 billion are required to meet housing demand in this country. Where is that going to come from? It is going to come from pension funds.
So this is, unfortunately, sending the wrong signal, and I think the Government are aware of that—we have certainly made those representations directly and to other Departments.
Barry Gardiner
Q
Jack Spearman: Yes, I know where that came from.
Barry Gardiner
Well, it came from the Pensions and Lifetime Savings Association.
Jack Spearman: I would advise you to go and ask them again, because the pension funds we are talking about have made representations directly to the Government.
Barry Gardiner
Q
“We do not think it is fair that many leaseholders face unregulated ground rents for no guaranteed service in return.”
So the idea that you seemed to put out—“My goodness, the housing market was going to collapse because pension funds were not going to invest in property any more because they weren’t going to be able to extract the ground rents”—is a nonsense, is it not? You talked about £100 ground rent, but you know what is being done here. Your members are not limiting to £25 or £100 ground rents or peppercorn rents. Over the past 15 years, they have created a rentier structure wherein they can extract revenues from the ground rent that are exorbitant—in some cases, £8,000 a year for no service. Is that not true?
Jack Spearman: You make a couple of points there. First, you seem to be suggesting that it is okay to steal the chocolate bar from the shop because it is only 1% or 2% of the stock—it is still not okay. The second thing I would say is that—
Barry Gardiner
Q
Jack Spearman: I can come on to the service provided. Ground rent is a consideration as part of the lease and the premium. You are right to say that, technically—legally—the ground rent does not afford service. But we would say that, through our members, a huge amount of work gets done as a result of that ground rent and as a result of pension funds having invested in it. Take the Building Safety Act 2022, for example—remediation, fire safety audits and building safety audits are all undertaken at no cost.
Barry Gardiner
Q
Jack Spearman: I disagree with that.
Barry Gardiner
Q
Richard Fuller
On a point of order, Dame Caroline. I am wondering whether my colleague, Mr Gardiner, is getting to a question rather than just expressing a view.
The Chair
We do have very limited time, Barry, and other people want to ask questions, so can you bring it to a question swiftly?
Barry Gardiner
Indeed. Mr Spearman, you have misled people in the polling surveys and the conclusions you have drawn from them, have you not? Your own members—Consensus Business, Long Harbour and Wallace Estates—did surveying in which they found that 67% of residential leaseholders said that they would wish to take control of their building and get out from under you, but you suppressed that, did you not?
Jack Spearman: We have never said that people are incapable of managing their building—absolutely not. The desire to do so diminishes with the complexity of the building. I am sure you have seen the Government’s own survey on living in shared buildings. You heard from Professor Steven this morning in Scotland about the issues with the system in Scotland—
Barry Gardiner
A manager who works for a freeholder can be no different from a manager who works for an enfranchised set of leaseholders, can it? So the idea that the complexity is beyond the leaseholders is simply not a fair comparison.
The Chair
Order. We have time for only one more question, Barry. Can I move on to Richard Fuller, please?
Richard Fuller
Q
Jack Spearman: This is a bit of an issue we have with the way the impact assessments have worked, because the impact assessment for the leasehold and freehold Bill did not take consideration of the consultation impact assessment that came out on ground rent. They are not working together. That is part of the issue of you not being able to scrutinise the impact assessment within the ground rent consultation, where the Secretary of State is on record as saying he wants a peppercorn ground rent; in that it says the impact would be £27.7 billion. If you add that to the £3.2 billion in the Leasehold and Freehold Reform Bill impact assessment, that is where you get to.
Richard Fuller
Q
Jack Spearman: I think it is a bit more, actually. Is it not £3.17 billion in this one?
Richard Fuller
Exactly—you have added them all up. I just did the first section.
Jack Spearman: Indeed.
Richard Fuller
But a bit like an iceberg, the transfer of wealth from group A to group B is somewhere else; it is not here in the impact assessment.
Jack Spearman: Agreed. Also, in terms of the people it is being transferred to and from, remember that while a lot of leaseholders are homeowners, there are also a lot of buy-to-let investors in that group—over 50% in our membership, of leaseholders are buy-to-let investors. That is a transfer from business to business being overseen by this Bill.
Richard Fuller
Very good. Does anyone else want to come in? I had another question, unless we have no more time.
Richard Fuller
Q
Jack Spearman: Yes. It is very important that, at the very least, the primary legislation sets out what reference the Minister should look to—something dynamic would be helpful, so that you don’t have these ridiculously long periods of time where one party is out or in. I think people have talked about looking at some long-term ideas, whether that is the National Loans Fund rate or the longest Treasury gilt. You obviously don’t want to make it too dynamic, so that it is always shifting around, but I think it should clearly reflect market value. It should be done on a no-act principle. It should be enabled to be dynamic so that, as I said, you do not have this problem of the Secretary of State having to arbitrarily change it—it should be able to move with the market. It should be something that is available for reference.
The Chair
Thank you. That brings us to the end of that session. I thank our witness on behalf of the Committee.
Examination of Witness
Giles Grover gave evidence.
The Chair
We will now hear oral evidence from Giles Grover from End Our Cladding Scandal. He is coming to us via Zoom. For this session we have until 3.50 pm. If the witness can hear me, can he please introduce himself for the record?
Giles Grover: My name is Giles Grover from the End Our Cladding Scandal campaign, which represents leaseholders in unsafe buildings across the country. I will tell you about the background if you don’t mind. In early 2019 we formed a coalition of leaseholder resident groups across the country. I represent leaseholders in close to around 2,000 buildings. Personally, I have been a leaseholder since 2008. I became a director of the residential management company in my building in 2010. I was first told my home was unsafe in August 2017 and I have been heavily involved in the cladding and building safety scandal since then, where it has particularly been clear that the nature of leasehold law has played an intrinsic part in the delays to our homes being made safe.
Mike Amesbury
Q
Giles Grover: There are some good things for leaseholders in general. There seem to be some better things than there were. Part of the problem is that we still do not have full clarity in terms of what the legislation will look like in its final form, and supporting legislation, so it is quite difficult to comment.
On building safety amendments, I am afraid to say I don’t really know what is in there. I have seen that the Opposition have tabled a couple of amendments—new clauses 27 and 28—as a starting point. However, we have been lobbying the Government, meeting the Government, speaking constantly almost on a daily basis, and having regular meetings pushing for further protective measures to make the Building Safety Act operate as intended; but I cannot really see anything there. I have seen a press release saying, “We will apportion leases,” which is something we raised with the Secretary of State a long time ago. I am talking about enfranchised buildings as well. But as it stands, I am still waiting for the Government to bring forward some building safety amendments that will mean that the homes that are unsafe, many of them unsafe for six and a half years, will be finally fixed at pace—at the pace we need and the pace we deserve.
Mike Amesbury
Q
Giles Grover: Not yet. Again, I had a look at the 140-page Bill and it did not say anything about developers. It talks a lot about the freeholders, but I cannot see anything that will mean that those freeholders will now crack on with making our buildings safe at pace. I cannot see anything that says what the mechanisms will be to oversee that. I fear that the reality on the ground is that the freeholders are still focused on mitigating their own liabilities. Historically they have taken years, for example, to sign grant funding agreements. They have delayed work starting on site. We are seeing those same things happen with developers now.
On a wider point, the Building Safety Act came into play on 28 June 2022. We are now looking at amendments that will make it operate as intended. So I think there needs to be a raft of amendments from the Government. Some of the stuff we have been talking about in terms of their ongoing policy thinking, but ultimately one of the simple things is that we still have too many leaseholders ruled out of protection. We still have too much uncertainty on the ground. So in the King’s Speech, the paragraph that talks about making it operate as intended has a heck of a lot of heavy lifting to do. I need to see the detail before I can say whether it will work or not. I fear, based on my experience, that it is unlikely to be the case.
Mike Amesbury
Q
Giles Grover: As I said, the new clauses that have been tabled would go some way toward ensuring that those non-qualifying leaseholds for more than three properties are treated the same as qualifying leaseholders. The buildings that the Government currently deem irrelevant because they are under 11 metres would be made relevant.
It is worth just setting the scene. I gave evidence to the Public Bill Committee on the Building Safety Bill in September 2021, and there was a lot of talk of, “We’ll do this, and we’ll do that. We’ll definitely protect you.” We then saw a raft of legislation come out from 14 February 2022. The problem is that it is all very high level and complicated. Some people might get some protection and some people might not. We are all the innocent victims of this scandal. It shocks me that despite the Secretary of State saying on 10 January 2022 that we are shouldering a desperately unfair burden and that industry will pay, two years later I am still talking to Public Bill Committees about what more needs to be done. It is all too slow.
Andy Carter
Q
Giles Grover: There are quite a few things missing. The first thing to say is that what you should really do is say that there are no more non-qualifying leaseholders or people who are being arbitrarily ruled out of help. You could do that as an amendment to the Bill. From some of the ongoing campaigning and lobbying that we have done, particularly with the Levelling-Up and Regeneration Act 2023, we fully recognise that the Government do not necessarily want to protect everyone. The problem is that they have spent far too long apportioning liability and talking in theoretical terms. There are still too many ordinary people that are not protected.
Going into the specifics, if there is not the willingness to say, “Okay, we will protect all the victims of this scandal”—which you really should be doing—what we need to do is say, “How can we better protect the ordinary people who still aren’t protected but who the Government say that they want to protect and should protect?”. That goes back to the conversations being had with the Department and the amendments that have been tabled about extending property protection to the first three properties of all leaseholders, because that would mean that everyone is treated fairly, and about apportioning ownership, which the Government have said they will do in this Bill, to make sure that the marriage penalty, as it is known, will be done away with.
There is one other point about the distinction of where it is in perpetuity for non-qualifying leaseholders. It is very worrying. For the non-qualifying leaseholders we speak to, it is literally hanging over their necks for the rest of their lives. Even if the building gets remediated and even if it is assessed as safe, they are still treated as non-qualifying leaseholders. One element I forgot to mention is that there is a potential portfolio-size amendment that was tabled to the Levelling-Up and Regeneration Act that we hope the Department is looking at closely.
Again, all leaseholders should be protected. If there is not the will for that, which there really should be, we need to do more to make sure that the protections as they are protect more people. I could go into a lot more detail, but I do not know how much you want.
Andy Carter
Q
Giles Grover: I have a lot of views on that area. Part of the issue was that under the Building Safety Act there were building safety managers in place with certain duties. At the last minute, that legislation was moved away from, but those duties still exist. A lot of the high-rise buildings that have registered with the Building Safety Regulator are facing enormous costs of compliance, and there are real fears about the work that will need to be done. We are seeing bills land on our doorstep all over again. I got one—thankfully, I am a residential management company director and can challenge it more—with an estimate of £500 a year extra per leaseholder to comply with the Building Safety Regulator if we had not moved away from some of the strange costs that were in there.
I have seen that for other buildings: leaseholders who have just got the freehold have suddenly got a demand saying, “You are also going to have to pay for compliance with building safety.” It is very worrying and strange that the innocent leaseholders we are meant to be protecting are now going to have to pay, but just in a slightly different way, to ensure the safety of the buildings that should have been made safe and should be maintained. Fire doors are another example that I could really get into, but I only have 20 minutes so I will hand back to you.
Matthew Pennycook
Q
Mike and I tabled new clauses 27 and 28 to address some of the “in principle” issues we have been pushing for a long time on—qualifying and non-qualifying leaseholders and building height. Specifically, in terms of what the Government might feasibly bring forward, what is your experience from cases across the country of the operational elements of the Building Safety Act that are not working effectively? I am just trying to get from you a more realistic sense of what you might expect the Government to bring forward, in terms of extending this Bill to ensure the Building Safety Act operates as intended. What tweaks to the Building Safety Act are required, in as much detail as you can in the time you have?
Giles Grover: One of the major tweaks is on an issue we were first made aware of in November 2022 due to the residents of a building in Greater Manchester being forced to pay for interim measures. The council is now paying for those interim measures but it has been told that it cannot recover them through the Building Safety Act because the legislation is not in place. That is a simple one that could help.
You could ensure that resident management companies and right to manage companies can raise the legal costs where they might be needed in respect of building safety and relevant defects. There are some wider elements that are already in the Bill, in terms of stopping freeholders re-charging their legal fees. Our concern is whether that will protect non-qualifying leaseholders who are still being forced to pay fees.
This is where I can get into the specifics. I am no lawyer as such—you have had a lot of very intelligent people on before me—but I say this from the campaigning aspect of it. We need to see a fair bit more detail about exactly what happens when a freeholder is avoiding their liabilities and not giving a landlord certificate within the stated time period. The Government may tell us, “Oh, don’t worry. That means they can’t pass the costs on,” but theoretically I cannot sell my flat without that certificate because the conveyancer is asking for it, so why not have an express duty for them to provide it? To be completely frank, the whole landlord certificate/leaseholder certificate process is an absolute quagmire and a nightmare on the ground. I would personally prefer it if the Government did away with that.
There are lots of issues like that. There are points about court-appointed managers, which cannot be the accountable person, which seems quite strange to me. We have been told that there is another route through the Building Safety Regulator, but that would require the special measures manager legislation to be enforced. There are issues with shared owners in complex tenures where you have a housing association as the head leaseholder. Will they be protected from all costs? Will they have the same rights as all leaseholders?
Philosophically, the simplistic approach should be that you have the full protection. New clauses 27 and 28 would be a massive relief. It is then a case of whether legislation is needed or whether you can use the current measures. With the developer scheme, where it is for over 11-metre buildings—could that be extended to under 11-metre buildings? The cladding safety scheme is now for mid-rise buildings; could that be extended for low-rise buildings? Could the cladding safety scheme be extended to become a building safety scheme?
For a lot of this the pushback will be, “There is not enough money,” but there is money out there. There is money that can be got from industry. There are further parties, such as construction product manufacturers and providers, and the Secretary of State said they would make them pay two years ago; they have not paid yet. There are a lot more parties that could be brought into the pool. So operationally there is more they could do by saying, “We’ve got seven different funding schemes;” —or however many it is—“where is the oversight of all of them? Who is talking to each other? Are these regulators? How does DLUHC talk to the recovery strategy unit? Are they talking to the Building Safety Regulator? Is Homes England involved? The local regulators now have new money to take action; are they taking action?”
So, arguably, a lot of it is already in place; but what is needed is the comprehensive oversight and the proper grip to say, “Right: all these buildings—10,000 of them—are going to get fixed. This is how—this is where the money is coming from. Cladding costs are here. Non-cladding costs will come from there.” What you really need to do is put the money up front, recover it. The Government say that their leaseholder protections mean that the majority of leaseholders won’t have to pay. If they have got the confidence in their legislation then they can take over the burden from leaseholders.
Barry Gardiner
Q
You raised the issue, in response to Matthew Pennycook’s questions, of section 24 of the Landlord and Tenant Act 1987 and applying for an officer of the court to be installed to do the works and turn around a building. Clearly, it would be something much to be wished, for many people who found themselves involved a building safety issue, if they were able to do that. Related to that, I know you are aware of the Building Safety Act 2022 ban on section 24 managers being the accountable person.
This is a matter we have discussed with a number of witnesses such as yourself. Are you aware that at one development, the management control regarding safety and remediation was given back to a freeholder who was the one who took, the tribunal found, £1.6 million in insurance commissions unreasonably? They will now be handed £20 million because of that BSA anomaly, by the Government. So the very people who could not be trusted with money are now being given £20 million to remedy the defects that they were responsible for in that building.
Giles Grover: I am very aware of it. I have watched some of the sessions, and I was made aware of it last year by one of the leaseholders at that building. I have looked into this. I have had various conversations with various lawyers. It still just seems bizarre that the manager who has been appointed by the court cannot be the accountable person. I am just a simple man: I do not understand why that cannot happen—why the Government, or the judge, based upon the legislation that is out there, think it is a reasonable or positive outcome for that money to go back to that rogue landlord, shall we say. I do not get it, to be honest.
Barry Gardiner
Q
Giles Grover: Yes. I only have 20 minutes, so I will try to be brief. I could spend all day talking about that. I have had personal experience of that in my building. Our developer sold the freehold out from under us to an offshore freeholder who, one year before the building safety crisis took effect, said they did not want to sell the freehold because they were long-term investors. A year or so later they said, “Okay. We are transferring it to another company. Do you want to buy the freehold off us?” Because they saw—
The Chair
Order. I am afraid that brings us to the end of the allotted time for the Committee to ask questions, and indeed for this afternoon’s sitting. I do apologise to the witness, but I thank him very much on behalf of the Committee. The Committee will meet again on Tuesday to begin line-by-line scrutiny of the Bill.
Ordered, That further consideration be now adjourned. —(Mr Mohindra.)
Criminal Justice Bill (Ninth sitting)
Thursday 18th January 2024
(3 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Criminal Justice Bill 2023-24 View all Criminal Justice Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 January 2024 - (18 Jan 2024)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, I have a few preliminary announcements. As ever, Members should send their speaking notes by email to Hansard. Please switch electronic devices to silent. Tea and coffee are not allowed—only water.
Clause 25
Transfers of prisoners to foreign prisons: introduction
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 64, in clause 26, page 23, line 7, at end insert—
“(2A) The Secretary of State may not issue a warrant under subsection (2) where—
(a) the prisoner has less than 180 days to serve of the requisite custodial period;
(b) the prisoner is serving an indeterminate sentence of imprisonment or detention for public protection; or
(c) the Secretary of State is satisfied that the prisoner should continue to be detained in a domestic prison for the purposes of—
(i) receiving instruction or training which cannot reasonably be provided in a prison in the foreign country, or
(ii) participating in any proceeding before any court, tribunal or inquiry where it is not reasonably practicable for the participation or to take place in a prison in the foreign country.”
This probing amendment would introduce exclusions on the type of prisoner that could be issued with a warrant to serve their sentence in a foreign country. It excludes people with less than 6 months to serve, those serving indeterminate sentences for public protection and those who need to be detained in the UK for education/training purposes or for legal proceedings (e.g. parole).
Clauses 26 and 27 stand part.
The Parliamentary Under-Secretary of State for Justice (Laura Farris)
It is again a pleasure to serve under your chairmanship, Ms Bardell.
Clauses 25 to 27 concern the transfer of prisoners to foreign prisons. Clause 25 introduces the measures that are relevant to the transfer of prisoners to rented prison spaces overseas. It defines key terms relevant to the following sections, and establishes the nature of the agreements and to whom those provisions may be applicable. The measures have been drafted to apply to a broad cohort of adult prisoners. This will ensure that the measures are applicable to the final cohort that will be decided on under the terms of any final agreement with a partner state. Prisoners will be subject to a transfer only after an assessment of the individual circumstances of their case. Although the details will be subject to future negotiation and agreement, additional exclusion criteria may apply.
Clause 26 deals with the transfer of prisoners between the territory of the United Kingdom and rented prison spaces overseas. It will allow the Secretary of State to issue warrants for the transfer of individuals from the United Kingdom to rented prison spaces overseas or for the return of prisoners held in rented spaces overseas to the territory of the United Kingdom. It allows for transfers both ways, as needed. Like many of the provisions relating to the transfer of prisoners to rented prison spaces overseas, these provisions may be used only once prison rental arrangements with foreign countries are in place, and may be used only for the specific purpose of transferring prisoners as part of that arrangement. The clause also provides that time spent in a rented prison space overseas will count towards the prisoner’s sentence as determined in England and Wales.
Jess Phillips (Birmingham, Yardley) (Lab)
Will the Minister tell the Committee whether the Government intend to transfer women prisoners? Literally decades of data shows that women prisoners are predominantly victims of domestic and sexual violence, which is often a pathway to their offending.
Laura Farris
The hon. Lady’s question is a good one. She will know that women form a very small part of the overall cohort of prisoners, that women prisoners have unique vulnerabilities and that they experience prison in a very different way from the male cohort. It is true that women are not expressly excluded from the provision, but obviously the United Kingdom Government are bound by the considerations under the European convention on human rights, and one can readily imagine how those will extend to female prisoners. It is obviously more likely that men will be transferred, because of the size of the cohort.
Jess Phillips
Would it not be better to put on the face of the Bill that women are carved out? I do not see any reason why we could not do that, if it is so vanishingly unlikely that a Government would transfer women prisoners. I am afraid to say that Governments are not always great on the issue of women in prison—not just this Government, but any Government, including any that might come in—so would it not be better to include that safeguard?
Laura Farris
I am sympathetic to the hon. Lady’s point, which I will take away. The purpose of the provisions is to set the framework for future agreements, so of necessity they are deliberately quite widely drafted and do not seek to tie our hands. The hon. Lady’s points are irrefutable; I looked at the issue when I was a member of the Justice Committee.
Domestic powers to transfer individuals to rented spaces such as these do not currently exist in UK law, and the provisions, widely drafted though they are, are essential for the operation of a future agreement. Clause 27 contains provisions regarding the operation of warrants, which are proposed in clause 26. The provisions allow the Secretary of State to appoint individuals to escort prisoners in transit to and from rented prison spaces overseas and to provide those individuals with the powers necessary to exercise those duties.
The provisions are similar to existing transport and escort provisions contained in the Repatriation of Prisoners Act 1984 and are built on long-standing operational practices. They are an essential complement to the powers set out in clause 26 and are necessary for the effective operation of a warrant for transfer. The clause also contains provisions to enable designated individuals to detain prisoners who may attempt to escape or who find themselves unlawfully at large in the process of transit to or from a rented prison space overseas. I commend clauses 25, 26 and 27 to the Committee.
Alex Cunningham (Stockton North) (Lab)
I am grateful to the Minister for the introduction to this cohort of clauses, which I will address along with my amendment 64.
As the Minister has outlined, the clauses facilitate the transfer of prisoners in England and Wales to an overseas jurisdiction and make provision to ensure the oversight of any agreement with a foreign country under which the UK prisoners will be held. Sadly, the Bill and accompanying notes do not provide the detail of exactly how the scheme will work, who the partner countries will be, nor where responsibilities will actually lie.
The charity Justice has provided some useful context. It says:
“In advancing his policy the Home Secretary made reference to arrangements which existed between Belgium and Norway on the one hand, and the Netherlands on the other, within the last two decades, as a successful means of increasing prison capacity. In fact, neither was an overwhelming success in terms of either rehabilitation or reduction in prison overcrowding. That is despite the fact that, particularly in the case of Belgium and the Netherlands, there were linguistic and cultural similarities, and geographical proximity. There is no guarantee that this will be true of any future arrangements that the United Kingdom may enter into.
Indeed, it is understood that the Ministry of Justice has been in talks with Estonia about using space in its prisons. While one of these is located in the capital, Tallinn—itself a three-hour flight from London, with no direct flights from elsewhere in the UK—the other two are 150-200km away by road. This is one illustration of the difficulties which will arise in facilitating family visits to those imprisoned abroad wherever they are, and of course access must also be provided to HM Chief Inspector of Prisons, Independent Monitoring Board members and legal representatives.”
I will return to some of those issues later, but perhaps the Minister can share with the Committee which countries the Government are actually negotiating with. More importantly, perhaps she can give us some insight into how the very real barriers to this policy will be addressed.
Amendment 64 in my name and that of the shadow Justice Secretary, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), proposes limitations on the types of prisoners who can be transferred. My hon. Friend the Member for Birmingham, Yardley has addressed very specifically the issue of women, and I welcome the fact that the Minister has agreed to take that away. I am sure we could support any amendment that she cares to bring forward on Report in order to exclude women from being accommodated abroad.
Others we would have excluded are prisoners with less than 180 days or six months of their custodial period left to serve, those serving an indeterminate sentence of imprisonment or detention for public protection, and those participating in any proceedings before a court, tribunal or inquiry where it is not reasonably practicable for the participation to take place in a prison in a foreign country. Releasing prisoners from foreign prisons back into the community in the UK would also pose severe challenges for probation and other services in ensuring that the necessary resettlement support is in place on their return.
The services and support that prisoners typically need on release include accommodation, welfare and employment support, ongoing treatment of drug and alcohol addictions, and health and social care. Arrangements to effectively monitor and supervise the individual unlicensed in the community also need to be put in place ahead of release. Making arrangements for the provision of these services requires effective co-ordination between the prison offender manager and community offender manager. In England and Wales, both of these roles are provided by His Majesty’s Prisons and Probation Service.
Releasing an individual directly from a foreign prison into the UK would require co-ordination between services based in two separate jurisdictions. That would present considerable logistical challenges and may lead to mistakes being made and the necessary support not being put in place. That could put the individual and others at risk and increase the likelihood of reoffending.
Excluding prisoners with a period of less than 180 days to serve from being issued with a warrant would help ensure that prisoners continue to be released from UK prisons into the community. The sentences of imprisonment for public protection and detention for public protection were abolished in 2012. However, the abolition was not retrospective, which means that thousands of people remain in prison, yet to be released after having been recalled to custody.
The plight of those prisoners, serving a sentence that Parliament has not deemed fit to remain on the statute book, has been well documented in the authoritative report of the cross-party Select Committee on Justice. In 2022, there were nine self-inflicted deaths of IPP prisoners, the highest number of self-inflicted deaths among the IPP prison population since the introduction of the sentence. As of December 2022, there have been 78 self-inflicted deaths of IPP prisoners since the sentence was introduced in April 2005. That is 6% of all self-inflicted deaths during the period. Forcing IPP and DPP prisoners to serve their sentences could further increase the risk of suicide and self-harm if they are accommodated abroad. Furthermore, it would make it extremely difficult for them to access the courses and interventions they need to demonstrate reduced risk and access timely legal advice and support through the parole process.
The amendment would also enable the Secretary of State to exclude a prisoner from being issued with a warrant if they are satisfied that the prisoner should continue to be detained in a domestic prison for the purposes of receiving instruction or training, which cannot reasonably be provided in a prison in a foreign country. That may include prisoners who are engaged in higher education that could only be provided in the UK, or prisoners involved in an employment scheme with the prospect of further training or a job opportunity on release in the UK.
Transferring prisoners abroad would have an impact on a prisoner’s access to legal advice, legal remedies for prison-related issues or their ability to participate in any ongoing legal processes related to their conviction or sentence at home, including the parole process. That is contrary to European prison rule 23 and Mandela rules 41 and 61, which give the right to accessible, timely and confidential legal advice. Being sent abroad would have a significant impact on someone being able to meaningfully participate in any legal process.
There is history in the immigration context of the Government legislating to say that people can pursue appeals against being removed and deported and then having to do so after actually being removed to their home countries. In those cases, the courts have ruled that, in practice, that is not possible and is therefore a breach of the Human Rights Act 1998 and the European convention on human rights. The Law Society has expressed concern that certain groups of vulnerable prisoners could be issued with a warrant to serve their sentence in a foreign country. That includes those with health issues, such as individuals who are pregnant or disabled, and those who have mental health or learning difficulties. There are currently no explicit safeguards or guarantees to protect against that. How will the Minister ensure effective resettlement arrangements under the provisions?
Prisoners with primary caring responsibilities could be issued with a warrant to serve their sentence in a foreign country. Transferring UK prisoners abroad will have a significant impact on their ability to maintain family ties. The Farmer review found family relationships to be the “golden thread” to help reduce reoffending.
There is recognition in the Government’s impact assessment that the policy will need to
“ensure prisoners’ rights to family life are protected in accordance with Article 8 of the European Convention on Human Rights, including access to visitation on par with what would be provided in HMPPS.”
However, the impact assessment goes on to say:
“It has not been determined who would bear the cost of these visits.”
Can the Minister offer any clarification on who is expected to foot the bill? Does she expect the children or the families of those imprisoned abroad to have to finance a trip abroad to visit their loved ones? Families and loved ones already struggle to meet the cost of visits to prison in the UK and they are unlikely to be able to meet the additional costs or logistical challenges involved in visits abroad. Imagine somebody having to spend five hours travelling to a foreign prison for a one-hour visit and then having to spend another five hours travelling back. That is total nonsense.
Mrs Flick Drummond (Meon Valley) (Con)
I rise to speak to the three clauses, which I also have deep concerns about. I once asked a prison officer at Winchester prison how many prisoners were truly evil and how many just got it wrong. He said, “About 5% are truly evil.” They are the ones that I am sure we would like to export to a gulag in Siberia and never see again, but I assume we will not use Russian prisons.
Any criminal who is a danger to society should be locked up for life and never released. However, the other 95% are capable of being rehabilitated, and in many cases part of that rehabilitation is to stay in contact with their families. A constituent wrote to me recently about this. She told me that her son had got into trouble and gone to prison. She believed that one reason why he has now become a responsible citizen was that his family were frequent visitors and able to be there for him.
What will we do about access for families if we send prisoners abroad? I have deep concerns about sending our prisoners overseas. There are many legal reasons why that is problematic. The impact assessment recognises the need to ensure that a prisoner’s right to a family life is protected, in accordance with article 8 of the European convention on human rights, and that access for families should be the same as the access that our Prison Service offers. Other issues include access to legal advice, and the ability to participate in ongoing legal processes; there are also potential problems with day release. The hon. Member for Stockton North laid those issues out clearly, and I will not repeat everything that he said.
We need clarification on what type of prisoners will be subject to transfer. We need to know what the criteria will be, and what support there will be for vulnerable prisoners. What will happen if things go wrong for the prisoner? Will that be dealt with under the host country’s legal processes, which may be different from ours?
Lastly, there is the cost of the system. The impact assessment says that it will cost £200 million up front, with an annual cost of £24 million, based on 600 prisoners being held abroad, but as we have not got any agreements in place how can we know what the true cost is? The policy will not come into effect until 2026, so it will not alleviate the issues that the prison estate currently faces.
I look forward to hearing the Minister’s response to the issues that I have raised, as this is a major change in policy, and I will not be comfortable supporting it until I get further clarification. She mentioned that the provisions are a framework, but I would like details before I support the clauses.
Laura Farris
I thank the shadow Minister and my hon. Friend the Member for Meon Valley for their contributions, and I will respond to them as best I can. First, I want to talk a little about the context of the pressure on prison places. As of September 2023, 16,200 people were on remand in prisons in England and Wales. The reason why we have such a big remand population is that during the white heat of the pandemic, the Government took the decision to continue with full jury trials.
I remember listening very carefully to what the right hon. Member for Tottenham (Mr Lammy)—now shadow Foreign Secretary, then shadow Justice Secretary—said on the issue. Colleagues may recall that at one point he called for a reduction in the size of juries. He said that it was imperative to keep the criminal justice system moving, and he advocated for a shift to juries of five, only during covid. He was robustly attacked by Baroness Kennedy in the Lords, a Labour peer, who said that that was an absolute dereliction of article 6 rights. She gave a very passionate speech about it, brilliantly written, and I noticed that the shadow justice team never mentioned reducing the size of juries again.
Respectfully, I say it is reasonable to infer that the Opposition supported our decision to continue with full jury trials. If I am wrong about that, they can direct me to where they called for something different, but as I say there was a tension between the then shadow Justice Secretary and Baroness Kennedy. [Interruption.] It was incredibly difficult, and I think that is why the shadow Justice Secretary got himself into a bit of a muddle.
The decision to continue with full juries of 12 people determining the result of criminal trials during covid contributed heavily to the backlog, and to why we have so many people on remand awaiting trial.
Laura Farris
I will continue a little more. We are undertaking the biggest prison building exercise since the Victorian era. We have committed to creating 20,000 new prison places, and have already got 5,700 of those places on stream, but we are not there yet.
The amendment tabled by the hon. Member for Stockton North gives rise to a number of sensible points. Let me distil them: he thinks that prisoners should not be transferred if they are getting near to the end of their sentence, have a sentence of imprisonment for public protection, are going through constructive rehabilitation treatment, or are implicated in some form of criminal proceeding. All those are very sensible ideas, but we respectfully believe that they are best addressed through policy, based on the appropriate expertise from within the prison system, not set out in primary legislation.
In fact, I think the hon. Gentleman made the point tacitly himself. He gave a number of other very good examples, including prisoners who have serious mental health conditions, are pregnant or are someone’s primary carer. All those factors are highly material. Let me reassure him slightly, if I can. To the extent that the exploratory conversations have begun, we are only having them with other European countries. That means that they are bound by the same obligations under the European convention on human rights, which would be material in the types of cases the hon. Member for Stockton North has suggested.
Alex Cunningham
Is that a confirmation, then, that no prisoners will be moved to countries not covered by the ECHR?
Alex Cunningham
With respect to the Minister, this is a fundamental point going forward. As I said in my speech, if prisoners are removed to a country—Rwanda, let us say—they will not have the same protections as they would have if they were moved to Holland. It is important that the Government clarify exactly whether people will be removed to jurisdictions outside the ECHR.
Laura Farris
I thank the hon. Gentleman, who makes a fair challenge. I am only aware of exploratory conversations with European countries bound by the European convention on human rights. I understand that there will be no partner country that is not also complying with the European convention rights, but I think he deserves clarity on that point.
Alex Cunningham
I appreciate what the Minister is saying; she has been very clear about the point being well made. But if prisoners cannot be removed to a country that is not covered by the ECHR, perhaps that needs to be stated in the Bill.
Laura Farris
It is in the Bill that the Bill itself is compliant with the European convention on human rights.
Alberto Costa (South Leicestershire) (Con)
This may well be helpful to the Minister: the ECHR may in fact apply extraterritorially to British subjects or British prisoners who are placed in prisons outwith the member states that are part of the Council of Europe. She might want to check whether it applies in extraterritorial circumstances. [Interruption.]
The Chair
Order. I know that Members feel passionately about this issue, and they are, of course, welcome to make further contributions. If they want to, can they please indicate that once the Minister has finished?
Laura Farris
I want to address the points made by the hon. Member for Stockton North and explain why we think these matters are best placed in the policy itself rather than in the Bill. He will respect the fact that the whole status of IPP prisoners is currently a matter of review; as a member of the Justice Committee, I contributed to the report that has now been taken up by the Ministry of Justice, so I have looked at the issue of IPP prisoners carefully during my time in Parliament.
The points that the hon. Gentleman made about rehabilitation are, of course, important. He raised a number of other points and I will try to answer all of them. He asked how on earth the Parole Board could be expected to successfully manage a prisoner if they were released directly from a foreign prison to the United Kingdom. I want to reassure him that prisoners will be repatriated for the final section of their prison sentence before that, so that they are assessed by the Parole Board in the normal way. He also asked about the availability of legal advice, which was a very good point. First of all, the whole landscape of court procedure has changed in the last few years. Receiving legal advice can be done remotely, and court proceedings often take place remotely via a live link.
It is imperative under article 6 of the European convention on human rights that somebody should be able to access legal advice where appropriate, but I gently remind the hon. Gentleman that the first time the possibility of obtaining legal advice from the United Kingdom in a foreign country was embedded in primary legislation was under the last Labour Government. That was in a slightly different context, under the Nationality, Immigration and Asylum Act 2002—David Blunkett’s legislation—but it provided for the removal of people whose immigration appeal had failed and for them to then submit out-of-country rights of appeal. The last Labour Government ran that quite successfully, and that was before we were really in the technological era that we are in now; in every single area of the law, we now make more and more use of video proceedings and online courts. I hope I have provided some reassurance on this point.
The hon. Member for Stockton North made a lot of sensible points about how prisoners’ families would travel to visit them. We have not set the criteria for who the prisoners are, but I gently make the point that more than 10% of the people in prisons in England and Wales are not British nationals anyway—somewhere in the region of 10,000 out of a total prison population of over 80,000. Some family and primary care considerations are already rather different with that cohort because they are not British nationals.
Vicky Ford (Chelmsford) (Con)
The Minister is making an important point. An excellent point was also made by my hon. Friend the Member for Meon Valley on the importance of prisoners being close to their family.
There is a very busy local prison in my constituency of Chelmsford. From time to time, I get the prison governor and other experts explaining to me that sometimes it is important to split people up. For example, if people have come from the same criminal gang or opposing criminal gangs, it can be important to move them so that they are not all in the same prison. There are parts of the country where getting “overseas” can sometimes be easier than visiting a family member who may, for example, be a long distance away in our own country. Sometimes, cases are different and are not about making sure that the prisoner stays in the local prison. That might not provide the best circumstances for that prisoner’s rehabilitation.
Laura Farris
I thank my right hon. Friend for her intervention. She is quite right. I will try to distil her point. I expected the challenge from the Opposition this morning about the circumstances of each prisoner being vital—whether they have family or connections—but it is true, as she said, that some prisoners will not have family or connections; there may be different imperatives. Obviously, we would be looking precisely at considerations of that nature before making a decision about prison transfer.
It is not possible to say that every prisoner needs to be imprisoned locally or is going to be the primary carer for all their children. Look at how decisions on the deportation of foreign national offenders are made by the immigration appeal tribunal: if an offender who has committed a serious offence tries to rely on the fact they have children in the UK, the tribunal will very often say, “You have already abandoned them because you were in prison for 10 years.” Some of that claim is lost anyway.
Mrs Drummond
The Minister made the very good point that 10,000 people in our prisons are foreign nationals. Why are we not sending them back to their countries and relieving the pressure for our own domestic prisoners?
Laura Farris
I reassure my hon. Friend that we are making significant progress on that. It is a good point. There has been an acceleration in that process. I have some data here. Between January 2019 and September 2023, over 16,000 foreign national offenders were removed from the United Kingdom. In the last 12 months alone, that returns rate increased by 20% when compared with the previous 12 months. There has been an acceleration in the returns agreements.
We have also expanded the early removal scheme, so that we can remove FNOs up to 18 months before the end of their sentences. The Home Office has deployed more caseworkers to focus on prison removals; we also have prisoner transfer deals with some countries, including Albania, that are already operational. I want to provide reassurance that that work is continuing at pace.
Alex Cunningham
I accept the points about foreign prisoners, but many are European nationals who have families in the UK. We cannot have a one-size-fits-all solution to this situation. I hope the Minister will acknowledge that.
Laura Farris
The provisions on the removals of foreign nationals are set out in the 2012 immigration rules; it is section 339 that governs removal. If the sentence has been two years or more, only truly exceptional circumstances would allow them to stay. The simple fact of somebody who has committed a category A or B—
Laura Farris
Let me finish the point. It has to be truly exceptional. I have done cases in court for the Home Office. The Home Office is nearly always successful when it relies on that clause because, as the court always says, when the offence is serious, there is an overwhelming public interest in the removal of a dangerous offender from the United Kingdom. Article 8 is qualified under paragraph 339 of the immigration rules.
Carolyn Harris
Would those exceptional circumstances include prisoners whose crime was committed after they had been trafficked to the United Kingdom, if they committed it because of the trafficking?
Laura Farris
I have never been involved in a case of that nature; cases where the offending is really serious tend to be much more straightforward. There is flexibility, because we can take such cases to court to appeal the removal. Obviously, when someone is already a victim of crime, that is a different context, so I do not know how the courts would deal with it. The law itself, however, is set out under the established immigration rules, in primary legislation and has been operational for 12 years now. That is not part of the dispute today.
To continue, it is right that we take innovative measures to ensure that we always have sufficient prison capacity to fulfil the orders of the court and to punish the most dangerous offenders. I reiterate at this stage that the powers simply lay down the foundation for future arrangements. I repeat: all the points raised by the shadow Minister, the hon. Member for Stockton North, about the considerations that might apply were relevant, but this is about future arrangements so that we will have the power to transfer prisoners to rented foreign prisons. No foreign prison rental agreements are yet in place, however. As he is aware, there is precedent in Europe: both Norway and Belgium have similar arrangements with the Netherlands at present.
Jess Phillips
I want to respond to some of what the Minister said. She told us not to worry about people’s families visiting, because 10% of them are foreign nationals. She went on to say that foreign nationals have children abroad. I represent loads and loads of people who are not British nationals but who definitely have family in the UK, so the idea that 10% of the prison population do not have any families who want to visit them, or that the families of all non-British nationals in UK prisons live back home, is wrong. Welcome to the world—people move about and they have babies with people here in this country. That is a bit of a reality check on some of what was said.
I also did not understand the Minister saying that we now have a massive backlog because the justice system carried on during the pandemic. Was the justice system due a three-year break to stop the backlog? Do we normally have a three-year break to make sure that we have enough prison places? That is a weird justification, which I did not really understand.
On human trafficking, there are more victims of human trafficking in prison than there are human traffickers; the woeful rates of conviction of people who people-smuggle or commit modern slavery are well charted. Last week, I was in a meeting with the bishops, the Lords Spiritual—I always think “Lords Spiritual” sounds like a rock band—about this exact issue. Prison wardens and governors from a variety of prisons were there to give evidence, as was the Bishop of Gloucester—I believe her role is as the overarching Lord Spiritual for prisons—the office of the United Nations High Commissioner for Refugees and lots of organisations who work with trafficking victims, including the Salvation Army and others. I was there, and the prison governors made it very clear that lots of people in prison have a pattern to their behaviour.
If we look at the Rochdale case from last week, we see that a young girl was criminalised as a pattern of her sexual abuse. That is not uncommon or unknown; it is in fact the opposite—it is well known, well charted and well evidenced. There is a huge amount of evidence for that, so I absolutely want to see a carve-out in that particular space for anyone identified as a victim of modern slavery.
The Minister asks us to wait for policy to feel comfortable about this, rather than writing things into the Bill. I totally understand that legislation does not necessarily need to be very detailed, but I would have liked, for example, to have had the word “women” once in the Domestic Abuse Bill—but, you know, we can’t be picky.
The trouble is that I have seen what happens when we leave things to policy that is skew-whiff and ambiguous in the Home Office, especially when it comes to cases of human trafficking. As the Minister said in response to my hon. Friend the Member for Swansea East, she has not been involved in any particular cases.
Currently, Government policy is a bit skew-whiff on how we remove or deal with victims of human trafficking. It is not exactly clear, and even the lawyers are not clear, both those from the Home Office and those seeking to represent victims of human trafficking who are threatened with deportation. Last week, I was with a barrister in a case, and she clearly said that the policy is to remove all victims of human trafficking from Albania, which the Government have said is a completely safe country—perhaps, unless you are a young woman who has been trafficked repeatedly, in which case all of the evidence suggests that Albania is incredibly dangerous.
I was in court because the Government were trying to deport a victim of human trafficking who had stayed within the national referral mechanism—in fact, had had her therapy paid for by that very same Home Office —for three and a half years. The Home Office had agreed yes, she is a victim of human trafficking. Literally, she has a piece of paper from the Home Office—it might as well have been signed by the Home Secretary—to say, “You are a victim of human trafficking.” She had two children, and both had lived in Britain for seven years, both born here of the rapes that she had suffered. But the Home Office was trying to deport her to Albania, a place they had already deported her to once; she had been re-trafficked from there immediately after reporting to the police. So excuse me if I do not trust something not being written into a Bill about how to handle these difficult cases.
I want to see on the face of this Bill provision so that no woman, no victim of human trafficking and no one with autism—the number of people with autism in our prison estate is phenomenal. Where are the safeguards so that barristers such as the one I was with last week have something to lean on when the Home Office decides that its policy is a little bit grey and so it can actually do what it wants?
Laura Farris
I thank the hon. Lady for her submission. I will confine myself simply to arguments as they relate to the prison transfer issue. Furthermore, this part of the Bill is Ministry of Justice, not Home Office.
Let me address two points. I am sorry if I was insufficiently clear when I talked about foreign-born offenders. Of course I do not make the crude assumption that none of them will have connections with the United Kingdom, including family, but some will not. We know we have problems with foreign gangs coming over. My simple point in response to the hon. Member for Birmingham, Yardley, is that not every single prisoner will have strong local ties in the United Kingdom, because that is not true and will be a relevant consideration in assessing the cohort for transfer.
On my other point, I am again sorry—perhaps it was my mistake—if I was confusing about the decision to maintain full jury trials during covid. That decision was a controversial one because of the number of jurors required. Those were physical trials at the time, and having the number of jurors required to sit together in a courtroom during a period when social distancing was set out in law was incredibly difficult. Without doubt, that delayed the process of the criminal justice system, so much so that some Supreme Court justices urged the Government to dispense with juries altogether. As I said in an earlier observation, the then shadow Justice Secretary, the right hon. Member for Tottenham (Mr Lammy), suggested we shrink juries rather than abandon them altogether. Other eminent lawyers—I cited one—thought that that was the wrong idea.
This was a very difficult decision on how to operate criminal trials, but in the end we decided that it was imperative, in the interests of justice and of article 6, the right to a fair trial, that everyone who was charged with a criminal offence in the Crown Court had the right to have justice administered as fairly as possible, so we stuck with the juries. That has led to delay, and that is why the remand population—in other words, people still awaiting trial—is higher than it otherwise would be, which has caused pressure on prison places. I apologise if that was insufficiently clear. That concludes my remarks.
Alex Cunningham
I had hoped to stand here having been reassured that this policy was well thought out and would work. I know that the Government are negotiating with some countries about where we will go, but we do not have the fine detail that we need in order to understand whether this will be an effective policy. I invite the Minister to intervene, because I want her to address a question specifically on the visitation rights of family members and who will foot the bill for families to travel to the Netherlands, Estonia or wherever under their visiting rights. I put that question in my original speech, so I invite her to intervene to answer it.
The Chair
My powers may be great, but they are not sufficient for me to compel a Minister to intervene against her will. You are welcome to intervene, Minister, if you would like to do so.
Alex Cunningham
I am grateful.
The right hon. Member for Chelmsford made an interesting contribution about gangs. I agree that it is often necessary to move people to different areas to break gangs up—that is absolutely essential. I do not know whether the Government intends that such people would be a popular cohort to be moved abroad to foreign prisons, but perhaps the Minister will address that when she winds up the debate.
The Minister referred at some length to my amendment. I am not convinced that we should not press it to a vote. I will press it, because we cannot rely on policy unless it is written down. My hon. Friend the Member for Birmingham, Yardley said the same and illustrated exactly why we cannot depend on policy. Policy changes all the time, so we need to nail down the provisions in the Bill and who will be included and excluded. Someone may table an amendment on Report in relation to whether women should be sent abroad to serve their prison sentence, but it is important to address the issue of foreign nationals—I spoke briefly about this earlier—who have families here, are in married relationships here and may be European citizens who are entitled to be here. I accept what the Minister says about the two-year threshold and everything else, but we cannot just say that it is okay to send men off to foreign prisons because they are foreigners—that does not wash at all. I will leave it at that, but I would like to press the amendment to a Division.
Laura Farris
I thought my last speech was supposed to be my final response, but I will come back on the two points made by the hon. Gentleman. First, I will come back to him on the point about bearing the cost. Secondly, I hope I was not speaking so crudely as to suggest that anybody foreign-born would be shipped off immediately; that is not what I was trying to say. I was simply saying that not every prisoner in a British jail has local ties, family or some of the compelling circumstances that he outlined. We do not disagree that some prisoners have very compelling circumstances; in the course of this debate, we have heard about people who would be at the top of that list for consideration. It is clear that there will have to be a difficult exercise.
I acknowledge that there is not much detail in the Bill. I remind the hon. Gentleman that we are putting it into primary legislation to create the framework for the agreements. There will then be individual agreements with European states. I have provided that clarity: each one will be a bespoke agreement. These are the legislative provisions to allow that, which is why the Bill does not go into more detail.
The Chair
To clarify, Minister, you can go back and forth a number of times.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Clause 26
Warrant for transfer of prisoner to or from foreign prison
Amendment proposed: 64, Clause 26, page 23, line 7, at end insert—
“(2A) The Secretary of State may not issue a warrant under subsection (2) where—
(a) the prisoner has less than 180 days to serve of the requisite custodial period;
(b) the prisoner is serving an indeterminate sentence of imprisonment or detention for public protection; or
(c) the Secretary of State is satisfied that the prisoner should continue to be detained in a domestic prison for the purposes of—
(i) receiving instruction or training which cannot reasonably be provided in a prison in the foreign country, or
(ii) participating in any proceeding before any court, tribunal or inquiry where it is not reasonably practicable for the participation or to take place in a prison in the foreign country.”—(Alex Cunningham.)
This probing amendment would introduce exclusions on the type of prisoner that could be issued with a warrant to serve their sentence in a foreign country. It excludes people with less than 6 months to serve, those serving indeterminate sentences for public protection and those who need to be detained in the UK for education/training purposes or for legal proceedings (e.g. parole).
Question put, That the amendment be made.
Alex Cunningham
I beg to move amendment 65, in clause 28, page 24, line 36, at end insert—
“(c) report to the Secretary of State on any breaches of the arrangement made between the United Kingdom and a foreign country.”
This amendment would require the Controller to make a report to the Secretary of State on any breaches of the arrangement between the foreign country and the UK.
The Chair
With this it will be convenient to discuss the following:
Amendment 66, in clause 28, page 24, line 39, leave out “may” and insert “must”.
This amendment would ensure that the prisons inspectorate must conduct the duties specified in new section 5A(5D) of the Prisons Act 1952 and ensures its consistency with the legislative basis for its role in England and Wales.
Amendment 67, in clause 28, page 24, line 40, after “prisons” insert “and escort arrangements”.
This amendment would ensure that HM Inspectorate of Prisons can inspect escort arrangements under which prisoners are transferred to foreign prisons. This would bring the legislation into line with inspectorate’s powers in relation to UK prisons and escort arrangements under amendments to the Prisons Act made by the Immigration, Asylum and Nationality Act 2006 (s.46) and ensures scrutiny of an area of evidenced risk.
Amendment 68, in clause 28, page 25, line 3, at end insert—
“(4) In section 1 of the Coroners and Justice Act 2009, after subsection 2(c) insert—
‘(d) the deceased died while in custody or otherwise in state detention in a foreign country pursuant to a warrant issued by the Secretary of State under section 26 of the Criminal Justice Act 2024 (warrant for transfer of prisoner to or from foreign prison).’”
This probing amendment would clarify how the government intends to apply its obligations under Article 2 (right to life) of the Human Rights Act, through ensuring the duties of the coroner also apply to any death involving a prisoner subject to a transfer agreement with a foreign country.
Clause stand part.
Alex Cunningham
I have already addressed many of the principles pertaining to the Government’s proposals in this part of the Bill, so I will largely confine my remarks to amendments 65 to 68, with some relating to clause stand part.
Amendment 65 would require the controller to make a report to the Secretary of State on any breaches of the arrangement between the foreign country and the UK. Clause 28 provides for the Secretary of State to appoint a “controller” role to keep under review, and report on, the running of any rented prison spaces abroad. It also extends the power of His Majesty’s chief inspector of prisons to inspect and report on the conditions of any such spaces.
As it stands, the Bill places a great deal of unaccountable authority in the hands of the Executive to make provision for any arrangement by means of secondary legislation. It is silent on how those subject to this arrangement will be treated. Similarly, it provides no guarantee that the prison rules in secondary legislation, which govern crucial issues including segregation, complaints and the use of force, would apply. I would hope that the Government would agree that, given the potential human rights implications, any agreement made between the UK and a foreign state should be subject to full parliamentary scrutiny and oversight, and to guarantees of compliance with existing human rights standards and obligations.
Furthermore, the implementation of any agreement by a foreign state will need careful monitoring and oversight to ensure compliance. It will also be vital to ensure that any breach of the agreement by the foreign state is promptly reported and acted on. Amendment 65 would help to enable that by requiring the controller to report any breaches of the arrangement to the Secretary of State.
The Bill should also be amended to ensure that it is the UK’s responsibility to investigate and bring to justice any ill-treatment or torture, should it occur under this arrangement, in line with the UK’s obligations under the Human Rights Act 1998 and the UN convention against torture. It should also require that any prisoner transferred to serve their sentence in a foreign country would have to be held in and have access to equivalent conditions and the same quality and range of services afforded to prisoners held in England and Wales, as mandated under Prison Rules 1999. As it stands, nothing in the Bill and related documents gives any indication that the same legal standards and rights in relation to treatment of prisoners, as set out in the prison rules, would apply.
I would be obliged if the Minister would address a number of related questions. Will she confirm the need for the operation of the scheme to be under constant review and that Parliament is entitled to reports on how successful or otherwise it is? Will British prison rules apply to UK prisoners sent abroad? Does she accept that it should be the UK authorities that investigate any allegations of ill treatment or torture of prisoners accommodated abroad under her policy?
I know that services, particularly work and access to rehabilitation services, are very limited in UK prisons because of the crisis in the service, but does the Minister agree that any prisoners sent abroad should have access to at least the same level of services as those held at home?
Amendment 66 would ensure that the prisons inspectorate “must” conduct the duties specified in proposed new subsection 5D in section 5A of the Prisons Act 1952, and would ensure its consistency with the legislative basis for its role in England and Wales.
We are concerned that the oversight of both the controller and His Majesty’s inspectorate of prisons will ultimately be subject to negotiation with a relevant partner country. The wording in the Bill relating to the powers of HM inspectorate of prisons differs from the Prisons Act in that it states the chief inspector “may” inspect rather than “shall” inspect. The implication is that inspections could take place only by invitation of the foreign state rather than as a statutory requirement. That leaves open to future negotiation crucial aspects of HMIP’s role and methodology, such as its ability to conduct unannounced inspections, to speak to prisoners in private and to access records such as those relating to the use of force. That would mean a lower standard of independent scrutiny would be applied to the treatment and conditions for UK prisoners held under such arrangements. It would fall short of the UK’s obligations under the optional protocol to the convention against torture and other cruel, inhuman or degrading treatment or punishment—OPCAT—which establishes requirements for independent detention monitoring to be conducted by a national preventive mechanism.
In the UK, the national preventive mechanism was established in 2009 and HMIP is one of the bodies designated to it. Amending the Bill to ensure that HMIP’s role can be performed in accordance with its duties under OPCAT would provide an important safeguard to ensure rigorous independent scrutiny of the treatment and conditions for prisoners held under these arrangements. Will the Minister guarantee that HMIP will be able to conduct its crucial role to the same standards that we would expect for any inspection on home soil, with unfettered access to prisoners, their records and staff?
Amendment 67 would ensure that HM inspectorate of prisons can inspect escort arrangements under which prisoners are transferred to foreign prisons. Clause 28 specifies that the chief inspector may inspect or arrange for the inspection of any prisons where prisoners are detained under an arrangement between the UK and a foreign state. Our amendment would bring the legislation into line with the inspectorate’s powers in relation to prisons in England and Wales by also enabling it to inspect or arrange for the inspection of escort arrangements.
The inspectorate’s powers to inspect escort arrangements were made by amendments to the Prisons Act in section 46 of the Immigration, Asylum and Nationality Act 2006. It is particularly important that the inspectorate should be able to inspect the escort arrangements for the transfer of UK prisoners to foreign prisons. We had a debate the other day about escort arrangements and the security of staff, which comes into play here. How do we ensure the safety of the staff of whichever organisation is moving people from this country to another?
A foreign state with which the UK makes an agreement could potentially be many thousands of miles from the UK. The transfer of prisoners could involve a lengthy journey involving a variety of modes of transport, including potentially prison vans, planes, trains and ferries.
As countless HMIP inspection reports show, escort, particularly when a person is being transferred against their will, can pose a number of risks to prisoners, including the mixing of men, women and children in the same transport—although I acknowledge that children will not be sent abroad; poor information sharing with escort services of the needs and risks presented by prisoners; poor conditions; poor escort safety and lack of seat belts; risk of suicide and self-harm, which may be exacerbated by long journeys under stress; lack of food, drink and comfort stops; poor treatment by escort staff; failure to address health and welfare needs; overuse of restraints with potentially fatal consequences; poor complaints processes and accountability; and damage to prisoners’ property.
The potential for trouble appears limitless. I hope that the Minister will recognise that she needs to act now to ensure all the necessary processes are in place to make sure that it is contained. Failure to do so could result in all manner of actions against the Government, including civil actions by prisoners who could well have grounds for going to court because they have not been treated properly in line with the UK law under this new policy.
12.30 pm
I turn to amendment 68. This probing amendment would clarify how the Government intend to apply their obligations under article 2 on the right to life of the Human Rights Act, through ensuring that the duties of the coroner also apply to any death involving a prisoner subject to a transfer agreement with a foreign country.
It is our view that the nature of the arrangement to send individuals to overseas prisons will establish the UK’s jurisdiction over any deaths that occur. Given the unprecedented nature of these arrangements, it is crucial that the responsibility of coroners to investigate overseas deaths be established clearly in advance, otherwise it would invite significant uncertainty and likely legal challenge if any individual were to die while imprisoned overseas. Furthermore, such a move will ensure that the coronial system is prepared to address the practical challenges of holding such an inquest, which are likely to include challenges in obtaining evidence and witness statements.
I move on to my comments on clause stand part. I am well aware that there is a school of thought that says that prisoners give up their rights to everything when they commit a crime and are deprived of their liberty, but I hope the Minister will agree with me that they do have rights and we have a responsibility to ensure they are not deprived of them, whether in a prison on home or foreign soil. It is critical that we nail down exactly how UK systems will be implemented abroad. I see that as all but impossible if we do not specify in the Bill the necessary requirements for that to happen.
The Minister is likely to say that we have to have a level of trust in the agreement with any foreign Government to stick to the standards required, but I am not so sure it is as simple as that. There will be huge costs associated with what may well just be a Government experiment—costs relating to travel and escort services, the fees to the receiving prison, potential costs for families of prisoners to travel abroad to visit, plus all the costs related to managing, inspecting and reporting on the services provided.
Put simply, the choice to send British prisoners abroad is a serious endeavour that requires meaningful protections to prevent abuses. It is also likely to come at substantial cost to the taxpayer, with the Government’s own best estimate of cost being £24.4 million per year to house a tiny number—600 prisoners. That amounts to £40,700 per prisoner, approximately £8,000 less per prisoner than to house them in a domestic prison: figures which are difficult to reconcile given that incidental costs like transportation will be additional to ordinary prison expenditure.
In any event, the proposal is going to create only a small number of spaces, meaning that it is not just an easy answer to the overcrowding crisis. Rather, if prisoners end up being mistreated or are simply unable to engage in rehabilitation and other processes that can help get their lives back on the straight and narrow, it could lead to more problems than it solves.
If the Minister is not prepared to accept our amendments, I ask her to take them away and consider exactly how she will fulfil her duties under the law in relation to UK prisoners accommodated abroad, and perhaps bring forward her own amendments on Report, which we would happily consider.
Laura Farris
I thank the hon. Member for his amendments, which I will address before turning to clause 28. I hope that nothing we have said and nothing that appears in the Bill would suggest for a moment that any of the 600 prisoners who end up being transferred to a foreign prison would not have their human rights respected. We remind the hon. Member that prisoners remain the responsibility of the Secretary of State. Although the matter of the exact arrangements will need to be negotiated, we are committed to ensuring parity for prisoners—that they have access to the same regime and the same rehabilitation opportunities—as part of any agreement.
I thank the hon. Member for his views on performance management mechanisms. We agree that they need to be in place. The controller role stands alongside our wider plans for robust and effective scrutiny mechanisms, including making arrangements for independent inspection and monitoring in rented prison places. The UK-appointed controller will be responsible for reporting to the Secretary of State on the running of a rented prison via HMPPS performance-monitoring mechanisms, and will be expected to report to the Secretary of State on the running of a rented prison overseas. I want to provide some reassurance that we have begun the process of engaging a number of existing inspection monitoring bodies in England and Wales to discuss how best that service might be provided.
My second point is that we are committed to ensuring that Parliament has appropriate opportunities to scrutinise any treaty that we negotiate with a partner state. Our current intention is that any future treaty establishing rental arrangements, including monitoring and control, would be subject to ratification, which would of course be subject to further scrutiny by Parliament, according to the procedure set out in the Constitutional Reform and Governance Act 2010.
On amendment 66, clause 28 currently only extends the inspectorate’s remit and does not place an obligation on it to inspect rented prisons overseas, as the shadow Minister pointed out, but we fully agree that rented prison places must be subject to effective inspection and we are ensuring that an appropriate inspectorate will be able to conduct such inspections. That commitment is made with due regard to the inspectorate’s need for operational independence and freedom of access to prisoners, including in private as the shadow Minister described, and to prison facilities. We are considering the logistical realities that that kind of access implies.
We are already working with HM inspectorate of prisons to discuss how best to ensure that the inspections will take place. The exact arrangements will be subject to negotiation and agreement with a partner country, at which point, if necessary, we can confirm what the law ought to say on this matter and make amendments as necessary using the delegated power that we are seeking in clause 29.
Alex Cunningham
The Minister just said that these rights and arrangements would be “subject to negotiation”. Could she explain what she means by that? Does that mean that some rights and arrangements may well not be available to prisoners or to inspectors in carrying out their duties?
Laura Farris
We are committed to ensuring that any foreign prison will be subject to an inspection arrangement; it is simply the terms of that inspection arrangement that we are not putting into primary legislation.
Amendment 67, tabled by the shadow Minister, is important. Arrangements for the independent inspection of escort arrangements in England and Wales already engage HM inspectorate of prisons to some extent, and the Prison Act 1952 allows the Secretary of State to investigate any matter connected to prisoners and prisons in England and Wales. We are committed to ensuring that effective scrutiny of escort arrangements is in place but, again, the exact terms of the arrangements are yet to be concluded and it is inappropriate to attempt to distribute specific responsibilities without prior agreement.
Amendment 68 addresses deaths in custody. This is an important point and must be subject to high-level scrutiny. That is especially true where there may be a death in custody that occurs overseas. This matter will be of primary importance to us during negotiations with any partner country. We are committed to ensuring that we are able to comprehensively investigate any deaths that may occur in rented prisons overseas.
This subject is a prime example of how we intend to use the delegated power we are seeking in clause 29. Once we have agreed arrangements with a partner country, we intend to use our delegated power—by potentially extending the remit of relevant bodies in England and Wales, for example. Until those arrangements are finalised it would be inappropriate to bind any potential body or person, including coroners, in law.
We are also committed, of course, to upholding the human rights of prisoners, including their rights under articles 2 and 3 of the European convention on human rights. That is legally binding on us, and those are absolute rights. We are currently considering only entering into arrangements to rent prisons from countries that can demonstrate that their prison conditions and capabilities—including for death investigations—comply with that same human rights law and our expectations on the fair treatment of prisoners.
On the basis that this is an important issue for future negotiations, or is non-negotiable given our international obligations, it is too early to begin considering how issues such as death investigation will be accounted for without first making precise arrangements with a partner country. I therefore urge the hon. Member for Stockton North to withdraw this amendment and to not press the other amendments in his name in this group.
I will speak now to clause 28, which concerns oversight arrangements for rented prison spaces. I have said already that the clause establishes a duty on the Secretary of State to appoint a controller. I have also set out their responsibilities for ensuring that any prisoner transferred to a foreign prison will be returned before the end of their sentence to allow for sufficient time for resettlement and reintegration back into the United Kingdom before release.
Clause 28 also extends the remit of His Majesty’s inspectorate of prisons to allow for inspections of any rented prison spaces overseas and subsequent reports to the Secretary of State on their findings—respecting their operational independence. Consideration of prison conditions and the treatment of prisoners has been, and will remain, central to our decision making.
Jess Phillips
On the point of saying here, and the law even saying, although the law does not say it, that prisoners will be returned to the UK before the end of their sentence, is there—well, I imagine that there is—a chance that their sentence might be extended because there is no place for them to be brought back to?
For example, our modern slavery laws say that we would have to wait for 45 days of reflection in cases of modern slavery. In reality, it is 700 days at the moment. So, laying out a term: is there any worry that, if we say that prisoners have to come back here before they are released to do a period of parole, we will in fact be extending people’s sentences because there are not any places for them to come back into?
Laura Farris
Can I just clarify that I have understood the hon. Lady’s intervention?
Laura Farris
I think it would have to be part of the planning for any prisoner who was going to be transferred for there to be space for them to be returned, because that is part of the policy—that they will be brought back into a domestic prison before release so that there can be proper engagement with the parole and probation services. That is, as hon. Members would expect, to facilitate a smooth release back into the community, as with any prisoner.
We are mindful of the need to ensure that effective inspection and monitoring provisions are in place. While the exact arrangements will be subject to future negotiation, we will ensure that those are sufficient, and they will also be subject to further parliamentary scrutiny. I commend clause 28 to the Committee.
Alex Cunningham
I have listened carefully to what the Minister said, and an awful lot of it seems to be about something that might happen in the future or be subject to negotiation. Many of the measures that we are pushing for are in our amendments; as I said, I invite the Minister to take the amendments away and consider them in some detail. Being “subject to negotiation” is not good enough. We actually need to know that the necessary access or protections will actually be in place.
I will not press any of the amendments to a vote—with the exception of amendment 66, because I think that the inspector must carry out the necessary inspection. I accept that the Minister said that that is the intention, but “intention” is not good enough; that provision needs to be in the Bill. I beg to ask leave to withdraw amendment 65.
Amendment, by leave, withdrawn.
Laura Farris
Before I come on to clause 29, I want to address one point made by the shadow Minister, as this is part of the same family of clauses. The reference to negotiation does not mean that things like inspection and equivalent conditions themselves are a matter for negotiation—in other words, that we might not have any of those things. We are going to insist on all those things, but the terms are the matter for negotiation—what the inspection regime would look like, for example. It is not that we would not be monitoring what happens in a rented prison space overseas. The mandatory language in clause 28(1) about the use of a controller goes to that on the issue of oversight.
Alex Cunningham
I am really quite interested because the issue is about negotiations. Is the Minister actually saying that there will be no agreement with any country that cannot provide the same standards of service, accommodation and access that a person would have in the UK?
Laura Farris
I cannot say that the programme would be exactly the same, but we are looking for equivalence. We even set out in the Bill that there will be a supervisory arrangement already, and I talked in the previous debate about what inspection would look like and who we are engaging on that.
Clause 29 creates a delegated power that would allow the Government to make future legislative amendments strictly for the purposes of implementing a future prison rental agreement. We are currently in exploratory talks with potential partner countries, but, as previously noted, formal negotiations have not commenced. While we have sought to draft broad enabling provisions that will facilitate any future arrangements, it is impossible to be certain on what legislative changes will be necessary to give effect to the agreements prior to the conclusion of negotiations and the subsequent agreement with a partner country on those terms.
For that reason, we are seeking a delegated power that will allow us to amend legislation for the sole purpose of complying with the terms of any future prison rental agreement that we sign. That is to ensure that the UK is able to swiftly comply with our obligations under such agreements. Parliament will have the opportunity to scrutinise our proposed use of any delegated power by means of the proposed affirmative procedure when amending primary legislation. That will ensure that Parliament may be content that such amendments are made pursuant to future prison rental agreements.
It is not possible, at this stage, to anticipate the outcomes of any negotiations, and any anticipation could significantly bind negotiating power. It is also not clear which matters will remain the responsibility of the Government and which will fall to other jurisdictions. Without this delegated power, further primary legislation would need to be taken through Parliament at the conclusion of individual negotiations to implement the international agreements. That would impact the Government’s ability to act swiftly.
The delegated power forms an essential part of the future-proofing framework that we have designed to accommodate future negotiations and arrangements with partner countries. It ensures that Parliament will still have sufficient opportunity to scrutinise the use of the powers and to feel content that the powers are strictly limited to use further to prison rental arrangements agreed with the partner country.
Alex Cunningham
My concerns are the same as those I expressed about previous clauses. I remain concerned that items not in the Bill are being delegated to secondary legislation. We are not going to oppose the clause, but the Minister needs to bear in mind all the things that have come before and to reassure us that there will not be any abuse here, as what should be important primary legislation is being pushed upstairs to a Delegated Legislation Committee.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Laura Farris
On a point of order, Ms Bardell. What are the timings for this morning’s sitting?
The Lord Commissioner of His Majesty’s Treasury (Scott Mann)
It is until 1 o’clock.
The Chair
The timings I was given were that the Committee would run until 1.30 pm, but it is a matter for the Whip.
Alex Cunningham
On a point of order, Ms Bardell. We have just completed a very distinct section of the Bill and we are within seven or eight minutes of the 1 o’clock deadline. I wonder whether it would be in order for me to invite the Government Whip to move the adjournment.
Scott Mann
The Government Whip has noted that the hon. Gentleman is very much in order.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Criminal Justice Bill (Tenth sitting)
Thursday 18th January 2024
(3 months, 3 weeks ago)
Public Bill CommitteesRead Full debate Criminal Justice Bill 2023-24 View all Criminal Justice Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 January 2024 - (18 Jan 2024)
The Parliamentary Under-Secretary of State for Justice (Laura Farris)
Clause 30 makes amendments to the Criminal Justice Act 2003 to ensure that offenders who are convicted of coercive or controlling behaviour and receive a sentence of 12 months or more in custody are automatically managed under the multi-agency public protection arrangements. That will mean that the police, probation and prison services must assess and manage the risk of controlling or coercive offenders in the same way as violent, sexual and terrorist offenders. A range of agencies will also have a duty to help to assess and manage these risks.
This is just the latest development of the law on coercive and controlling behaviour. This Government were the first to formalise coercive control as a criminal offence under section 76 of the Serious Crime Act 2015. We extended it to apply even after the end of a relationship under the Domestic Abuse Act 2021. In a number of different legislative vehicles, we have applied coercive control as an aggravating or, in some cases, mitigating factor for the purposes of sentencing. Today, we are adding it to the MAPPA arrangements in certain circumstances.
We are doing this for three reasons. First, it will build on what we have already done to ensure MAPPA is used for high-risk domestic abuse cases. We have strengthened the statutory guidance to require agencies to consider discretionary management under MAPPA in all domestic abuse cases. In the last reporting year, we have seen a 30% increase in the take-up of that offer. For that reason, we consider it appropriate to put it in the Bill.
Secondly, we also know that it is a significant risk factor for future abuse and that it is a known risk factor in domestic homicide, so this clause is pre-emptive. It will support the identification and risk management of perpetrators, thereby disrupting potential abuse, preventing revictimisation and protecting future victims.
Third, we are bringing coercive and controlling behaviour offences in line with other violent offences connected with domestic abuse. Perpetrators of other forms of domestic abuse, including threats to kill, actual and grievous bodily harm, attempted strangulation, harassment and certain stalking offences, are already eligible for automatic MAPPA management. We think that it is right to bring coercive control in line with those.
Jess Phillips (Birmingham, Yardley) (Lab)
I have just said that I would not contribute because I want to get off, but obviously I have not stuck to that. How many people will this clause bring in line with the law? We have some evidence from Refuge, which I cannot put my finger on right now—I am sure I will be able to manage that in a moment. I know and remember from the evidence sessions that a tiny, tiny fraction of people receive a sentence of more than 12 months in cases of coercive control. Would the Minister provide us with some understanding of exactly what this groundbreaking realignment of the law will actually bring about?
We still fail to recognise, though we must recognise it, that no one is convicted in the vast majority of cases of coercive control, domestic abuse-related crime or sexual violence. The monitoring that is needed must come before the instance. Schemes are currently being run by the Metropolitan police around the 100 highest priority at-risk offenders. In reality, however, although I am delighted that the Minister heralded some previous amendments of mine in a Bill Committee not dissimilar to this one—she is welcome—that is not what we are talking about in this clause. If it is more than 200 people, I would be surprised to hear that. I will find the data while she responds.
The Government are proposing legislation that allows us to monitor people as we do for terrorism, but in cases of terrorism no convictions are needed to undertake the type of monitoring that we hope our security services are doing day in, day out to prevent terrorism. To suggest that monitoring will happen only on conviction is absolutely not in line with terrorism. We still have a two-tier system, where the actual domestic terrorism that occurs in people’s homes is still very much allowed to happen.
Alex Cunningham (Stockton North) (Lab)
The clause makes a straightforward amendment that would provide for the automatic, rather than discretionary, MAPPA management of offenders convicted of controlling or coercive behaviour in an intimate or family relationship who are sentenced to 12 months or more. As a result, such offenders will be treated as category 2 rather than category 3 offenders for MAPPA purposes.
It should come as no surprise to the Government that we enthusiastically support the clause. Labour has committed to halving incidents of violence against women and girls within a decade. For far too long, those dangerous criminals have been let off and victims have been let down. Indeed, the multi-agency public protection arrangements were introduced by the last Labour Government in 2001 under the Criminal Justice and Court Services Act 2000, being strengthened again in the Criminal Justice Act 2003. Those arrangements see the police, probation and prison services working together to ensure the proper management and monitoring of sexual or violent offenders. In a joint thematic inspection of MAPPA, I have seen them called
“one of the success stories of the criminal justice system”.
The inter-agency approach of MAPPA improves public protection by bringing together criminal justice organisations, as well as others, in a structured way to address and actively manage the behaviour of offenders who can sometimes be difficult to accommodate and who may pose serious levels of risk. Labour is in complete agreement with the Government that perpetrators of coercive and controlling behaviour should be brought more directly under the remit of MAPPA. As Women’s Aid said, this signals that the crime of coercive and controlling behaviour, which is central to so much domestic abuse, is being taken more seriously by the justice system. As it also points out, bringing CCB offenders automatically under the remit of MAPPA is particularly important given the links between coercive control and homicide.
For cases where there is high risk of domestic abuse, the active management and inter-agency engagement that MAPPA provides can be an effective response. However, a report by His Majesty’s inspectorate of constabulary and fire and rescue services in 2021 identified a lack of multi-agency management of individuals who posed the most significant risk of harm to women and girls through domestic abuse. As part of the inspection, HMICFRS asked forces to identify the five individuals whom they considered posed the highest threat to women and girls within the local force area. Of the 40 individuals identified, only three were being managed under MAPPA.
Additional guidance for category 3 offenders who are perpetrators of domestic abuse has been welcome, but HMICFRS noted in its 2022 MAPPA review that there
“is still not a clear enough pathway for those who pose a risk of harm through domestic abuse, particularly for those who commit lower-level offences over a sustained period of time but pose a real risk of harm to their victims through long-term abuse.”
The impact that the clause might have, while welcome, as my hon. Friend the Member for Birmingham, Yardley said, is relatively limited, given the number of individuals who have been convicted of coercive and controlling behaviour since the introduction of the offence in 2015. Fewer than 2,000 people have been convicted of that offence, and yet—I think this is probably one of the most important points that I will make during this Committee—the data from the crime survey in England and Wales estimates that 2.1 million people experienced domestic abuse in the year ending 2023. Not every case of domestic abuse will include instances of coercive and controlling behaviour, but given the centrality of such offending behaviours in many cases of domestic abuse the number of CCB convictions still appears very low. Since the provision will apply to that relatively small cohort of offenders, it is difficult to discern what huge impact it will have.
I am interested to hear from the Minister about any additional provisions that her Department has been looking at in preparation for the Bill in relation to MAPPA and perpetrators of domestic abuse, particularly if it has looked at other measures that would make individuals who have committed domestic abuse MAPPA-eligible, because repeat perpetrators of this appalling violence against women and girls too often get away with their patterns of criminality and go on to commit more violence and cause more harm.
As I said, we fully support the clause and will vote with the Government, but we fear the level of impact that it will have. The criminal justice system is in crisis, and the Government are completely failing to address the shocking levels of violence against women. As with much of the Bill, we do not oppose the measures, but we are left wondering if these tweaks are all that the Government have to offer a system in crisis.
Laura Farris
I thank the shadow Minister for his speech and for supporting the clause. In answer to his final criticism that we have abandoned women and girls, the Serious Crime Act that created the offence of coercive, controlling behaviour received Royal Assent in February 2015. With respect to the hon. Member for Birmingham, Yardley, it predates her arrival in Parliament, but we created that criminal offence and we have been evolving its implementation since.
Laura Farris
I will make some progress. I want to respond to the points raised by the shadow Minister. [Interruption.]
The Chair
You do not need to apologise, but we are more freewheeling in Committee. If the hon. Lady wants to come back in later, she can.
Laura Farris
The provision has been welcomed by the Domestic Abuse Commissioner. She said:
“This provision will help to ensure that perpetrators are properly managed in the community and victims can be kept safe from further harm. The Commissioner welcomes this provision and will continue working with the government to develop proposals for the effective management of perpetrators.”
In answer to the hon. Lady’s question, in the data we have, which is from 2022, 566 people were convicted of coercive control, and it is estimated that, as she suggested, around 200 would be serving 12 months or more and would have been eligible for MAPPA management. We simply make the point that the MAPPA framework is used for the most serious offenders; whether it is a sexual, violent or terrorist offence, people qualify for MAPPA if their sentence is one year or more. We are not doing anything unorthodox or irregular in having that criteria in relation to coercive control.
I will respond to one of the shadow Minister’s final points. He asked whether there was provision for other forms of domestic abuse to fall under MAPPA management —the answer is yes. We strengthened the statutory guidance to clarify that MAPPA management can be considered by the relevant agencies in all domestic abuse cases. I hope that answers his query.
Jess Phillips
I did not find the piece of paper from Refuge, but I knew it would be about 200 people. Just to make it clear for the record, in one ward in my constituency there will be 200 violent perpetrators of domestic abuse. To the Minister’s point that she did not wish to take my intervention on the piece of legislation that was passed, I will never, ever criticise this Government on that. They have passed lots of legislation, so the skins of goats have had lots of words written on them. It means absolutely nothing—pieces of words on goat skin mean absolutely nothing if they are not then properly resourced, managed and implemented in our communities. The women in refuge accommodation speak of little else than what a nirvana it has been recently under this Government.
Laura Farris
I beg to move amendment 37, in clause 31, page 26, line 23, at end insert
“(and, in the case of a service offence, the corresponding offence is not so specified).”
This amendment provides that, for a service offence, the corresponding offence must also not be specified in Schedule A1 to the Sentencing Code.
The Chair
With this it will be convenient to discuss the following:
Government amendment 38.
Government amendment 39.
Clause stand part.
Laura Farris
Amendments 37 to 39 are not technical amendments, as my brief says; they are amendments that extend the operation of clause 31 to Scotland. I will be scolded by my officials if they do not agree, but that is what the amendments do.
Clause 31 ensures that categories of offender who were previously out of scope for polygraph testing are brought into scope. It ensures that there is express provision to enable the Secretary of State to impose mandatory polygraph testing as a licence condition for the most serious offenders who pose a risk of sexual offending or who committed historic offences connected to terrorism.
Polygraph examinations are used, most importantly, to monitor compliance with licence conditions, and the information obtained during testing is used by probation practitioners to refine and strengthen risk management plans. They have proved to be somewhere between 80% and 90% effective and have been used successfully by the probation service in the management of sexual offenders since January 2014. More recently, they were extended to terrorist offenders under the Counter-Terrorism and Sentencing Act 2021. Provisions in the Domestic Abuse Act also enabled the Secretary of State to commence a three-year pilot of mandatory polygraph testing on specified domestic abuse perpetrators.
Laura Farris
I don’t—[Interruption.] Yes, it has.
The clause extends eligibility for polygraph testing to offenders who have been convicted of murder and are assessed as posing a risk of sexual offending on release. It extends eligibility to those who are serving multiple sentences where the index sex offence will already have expired. To give a rather grim illustration of what that might look like, if somebody is sentenced for convictions of rape and murder, by the time of their release the sentence for the sex offence will have expired, and they would therefore not automatically qualify for polygraph testing without the extension that the clause provides.
The clause also extends polygraph testing to a cohort of individuals who have received non-terrorism sentences. At this point, I want to pick up on what Jonathan Hall told the Committee in evidence just before Christmas. This measure could apply, for example, in the case of someone who was convicted of conspiracy to murder but whose offences were an act of terrorism, took place in the course of an act of terrorism or were committed for the purposes of terrorism, if they committed their offences before the relevant legislation came into force.
The way in which we make that assessment will depend on the judge’s sentencing remarks. If, in sentencing, the judge made an express reference to the offending being in the course of terrorism, the extension provided by the clause would make polygraph testing applicable. We define this cohort as historical terrorism-connected offenders, and the polygraph testing licence condition is currently unavailable as a tool to manage the risk that they pose, although it would be available for an individual who commits the same offence today.
The intention of the clause is to fill the gap and provide more effective risk management in the community. I reassure the Committee that that does not mean that the person can be recommitted to prison. It is an assessment of their licence conditions. It affects their risk management. If it should later transpire that they have breached licence conditions, they could be recalled, but not by the polygraph test alone. As a whole, the clause will ensure that polygraph testing can be used to strengthen the management of those who pose a risk of sexual offending and those who committed historical terrorism-related offences.
Alex Cunningham
In his evidence to the Committee, Jonathan Hall said:
“In fact, if you look at the wording of the Bill, the Secretary of State will be allowed to be ‘satisfied’—not beyond reasonable doubt, just satisfied—on exactly the same test that currently applies to judges”
in determining whether the test should be taken. He went on to say:
“There is obviously a fundamental issue there, which I can expand on, but there is also a really practical issue, because what is a terrorism offence is not always very obvious.”—[Official Report, Criminal Justice Public Bill Committee, 12 December 2023; c. 66, Q170.]
He was clear that the clause might not have all the bolts and washers that it needs to be totally effective.
Nevertheless, I thank the Minister for introducing the clause. As she said, it will allow the polygraph condition to be imposed where the Secretary of State considers that an offender convicted of murder
“poses a risk of committing a relevant sexual offence on release”,
and where an offender is
“serving a relevant custodial sentence in respect of an offence who…at an earlier time during that sentence was concurrently serving a relevant custodial sentence in respect of a relevant sexual offence”.
It will also extend the use of polygraph conditions for terrorist offenders by enabling the Secretary of State to extend polygraph conditions to offenders where the Secretary of State is satisfied—just satisfied: this was the issue that Jonathan Hall was concerned about—that the offence
“was, or took place in the course of, an act of terrorism, or…was committed for the purposes of terrorism.”
Labour supports the clause. Where polygraph conditions have proved to be effective with certain offender cohorts, we should certainly be enabling the courts to impose such conditions to improve public protection. The extensions included in the clause are sensible additions to the scope of polygraph conditions.
We are also happy to support the Government amendments to the clause. They clarify some matters in relation to service offences and offences with alleged terrorism connections in Scotland. I would be interested if the Minister could share any additional recent evidence that she may have of the effectiveness of polygraph conditions on public protection, particularly if there are any ongoing assessments by her Department of the current use of polygraph conditions in England and Wales. Conducting polygraphs can be an expensive and time-consuming process, so I am sure the Minister will agree that we need to ensure that there is a robust evidence base to show that expanding the conditions will contribute further to public protection.
Although we support the clause, I am left to ask the Minister: is this all there is? Offender management has been in disarray for years, especially following the failed structural reforms through which the Government have dragged it. The Public Accounts Committee said that the probation service was
“underfunded, fragile, and lacking the confidence of the courts.”
That was even before the additional serious challenges that it has faced throughout and following the pandemic.
The chief inspector of probation noted that the high-profile independent reviews into the supervision of the likes of Damien Bendall and Jordan McSweeney found
“broader systemic issues in both cases which we are seeing time and time again, both in our local probation inspections and thematic reviews. These included: overloaded practitioners and line managers with well above their target workloads; significant delays in handing over cases from prison to community probation staff, resulting in last minute and inadequate release planning; and incomplete or inaccurate risk assessments. This is the case at both the court stage and start of supervision, with very inexperienced staff being handed inappropriately complex cases with minimal management oversight.”
That is the reality of our probation service today. It is another criminal justice agency in deep crisis.
A properly functioning probation service—I will say more about this on a later clause—is essential to keep the public safe by managing the risk of offenders in the community. The Government have brought yet another justice Bill before us and have given themselves another chance to improve the probation service and provisions around offender management. The Minister will probably talk about the new investment in the probation service, but we have to set that in the context of the huge cuts that the service has suffered since the current Government came to power in 2010. They have missed a lot of opportunities with this Bill. As I said on the previous clause, the offender provisions in the Bill are so slight that their impact will be negligible.
We are seeing a Government who have simply run out of ideas and are not doing enough to keep our communities safe. Although we fully support the clause, I again put on record our disappointment at the lack of ambition that the provisions show when our justice system is in chronic and intractable crisis.
Laura Farris
On Jonathan Hall’s comments, there are two points to make. First, given his expertise, it is relevant to consider what he said about polygraphs in general, which is that
“polygraph measures for released terrorist offenders are a good thing.”––[Official Report, Criminal Justice Public Bill Committee, 12 December 2023; c. 64.]
You asked for an updated example of where polygraph testing had been instrumental, and he gave an example—in fact, I do not think it had been used—when he said:
“I was in favour of polygraph measures after Fishmongers’ Hall. It was partly on the back of one of my recommendations that polygraph measures were brought in. They always, or at least for a long time, existed for sex offenders. You will recall Usman Khan, who was clearly a very deceptive man. My view was that polygraph measures could be useful.”––[Official Report, Criminal Justice Public Bill Committee, 12 December 2023; c. 66.]
It is difficult to prove a negative, but they were brought in shortly after that.
Carolyn Harris (Swansea East) (Lab)
Can the Minister clarify whether the polygraphs are administered by the private sector or the statutory sector? Given that we have had some startling problems with technical issues in the private sector of late, it would be interesting to know who is responsible for the polygraphs.
Laura Farris
Can I come back to you on that? The shadow Minister talked about the categorisation of former terrorist offenders, and I hope I can answer his point.
We have made the point, and I hope it was clear, that those who were convicted of an alternative offence where there was a strong belief that there was a terrorism connection—it is a small cohort—were convicted before the counter-terrorism law came in. They would have been convicted separately. Politicians are not making a random adjudication of whether an offender should be classified retrospectively as a terrorist. It is about looking at the sentencing remarks and what the judge, who heard all the evidence and sat through the trial, made of that offender.
It is a fair challenge. I know that it is quite an irregular provision in law to have, effectively, a retroactive clause. However, when you look at the failings that applied in the Fishmongers’ Hall case, there is a very strong public interest in ensuring that we maximise and extend the protection of this provision in a way that the public would find reasonable. When you refer back to sentencing remarks, you can be reasonably confident that you are—
The Chair
Order. I gently remind members of the Committee, from Ministers down, that when you use the word “you”, you are referring to me. You must refer to the hon. Gentleman either by his constituency or by his title, otherwise I might get a bit worried about what I have been up to.
Alex Cunningham
The Minister will know that we are very supportive in this entire area, but we have the right to highlight the issues that others have raised with the Committee. Jonathan Hall talked about the powers to carry out tests for people who may have served a sentence for a terrorism offence abroad and who return to this country. He went into some detail about that in his evidence. The Minister said that it is important that we have as strong a law as possible in the UK. On the overseas powers, Jonathan Hall’s final sentence was:
“Slightly ironically, the power that Parliament is being asked to create here would make the protections available to a domestic offender less than those that apply to a foreign offender.”––[Official Report, Criminal Justice Public Bill Committee, 12 December 2023; c. 65, Q170.]
That is why the Minister needs to look again at the aspects that she has outlined. Clearly Jonathan Hall thinks that they could be strengthened.
Laura Farris
I thank the hon. Gentleman for his intervention, although I am not sure that I completely followed it.
To answer the point about who administers the polygraph testing, it is the probation service.
The hon. Gentleman asked about resourcing and funding. We have injected extra funding into the probation service, as he acknowledged: it is now getting an extra £155 million a year. In the past 12 months, there has been a recruitment exercise that brought in over 1,500 new recruits. That is on top of the 2,500 since 2021, so in the past two and a half years alone we have added 4,000 people to the service and given it some increased funding. I hope that that answers the hon. Gentleman’s questions.
Amendment 37 agreed to.
Amendments made: 38, in clause 31, page 26, line 31, after “applied” insert
“(and was not an offence in relation to which section 31 of the Counter-Terrorism Act 2008 would have applied if paragraph (b) of subsection (1) of that section were omitted)”.
This amendment excludes, from inserted subsection (4BB), an offence tried in Scotland where it was alleged but not proved that the offence was aggravated by having a terrorist connection.
Amendment 39, in clause 31, page 27, line 4, leave out “(4BB), (4BC) and” and insert “(4BA) to”.—(Laura Farris.)
This amendment is consequential on amendment 37.
Clause 31, as amended, ordered to stand part of the Bill.
Clause 32
Confiscation
Amendment made: 40, in clause 32, page 27, line 8, at end insert—
“(2) In Schedule 5 to the Proceeds of Crime Act 2002 (criminal lifestyle offences: Northern Ireland), after paragraph 9A insert—
‘Offences relating to things used in serious crime or vehicle theft
9B (1) An offence under section 1 of the Criminal Justice Act 2024 (articles for use in serious crime).
(2) An offence under section 3 of the Criminal Justice Act 2024 (electronic devices for use in vehicle theft).’”—(Chris Philp.)
This amendment adds the offences created by clauses 1 and 3 of the Bill to the offences listed in Schedule 5 to the Proceeds of Crime Act 2002 (criminal lifestyle offences: Northern Ireland).
Question proposed, That the clause, as amended, stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 62, in schedule 4, page 119, line 18, leave out paragraph 25.
This amendment would remove the risk of dissipation as a condition for the making of a restraint order.
Schedule 4.
The Minister for Crime, Policing and Fire (Chris Philp)
As always, Dame Angela, it is a pleasure to serve under your chairmanship.
Clause 32 introduces schedule 4 to the Bill, making reforms that are more than technical: they are significant reforms to the confiscation regime in part 2 of the Proceeds of Crime Act 2002, to which I suggest we refer henceforth as POCA. That Act was passed over 20 years ago. The measures that we are introducing apply only to the regime in England and Wales contained in part 2 of POCA; there are separate confiscation regimes that apply in Scotland and Northern Ireland in parts 3 and 4 of POCA respectively. We are discussing with the Scottish Government and the Northern Ireland Department of Justice whether the reforms introduced by the Bill should also be applied to the regimes in Scotland and Northern Ireland. If they so wish, no doubt there will be amendments in due course.
In 2018, the Home Office commissioned the Law Commission of England and Wales to review the confiscation regime and make recommendations. The commission’s report was published just over a year ago, in November 2022. It contains 119 recommendations, which have shaped the measures we are introducing in this Bill; essentially, we are implementing the Law Commission’s recommendations.
Reform is necessary to ensure that the confiscation regime operates as efficiently and effectively as possible, prevents criminals from retaining the ill-gotten gains of their criminality, and makes it clear to offenders and victims that crime does not pay. We will achieve that in schedule 4 by streamlining processes, creating realistic confiscation orders and expediting enforcement.
The Government have consulted extensively on the measures for reform, which benefit from over 20 years of operational insight. These reforms will support the delivery of key objectives in the economic crime plan 2 and the fraud strategy to reduce money laundering and increase asset recovery. The 10 parts of schedule 4 contain a number of reforms, which, broadly speaking, do what I have set out; I would of course be happy to go through them in detail should any Committee member so wish.
I note that the hon. Member for Nottingham North has tabled amendment 62. I propose to respond briefly to that amendment once the hon. Gentleman has spoken to it.
Alex Norris (Nottingham North) (Lab/Co-op)
It is a pleasure to see you in the Chair, Dame Angela. I rise to speak to amendment 62.
Clause 32 and the weighty schedule that it introduces deal with confiscation orders and the regime that governs them. As the Minister says, they are not technical; they are substantial and important. It is safe to say that it is a matter of unanimity across the House that where people are convicted who have benefited, and in many cases made huge sums, from crime and its attendant misery, that money should be recovered from them where possible. Convicted criminals should not make out ahead as a result of their crimes. They should always know that that is what we believe in this place—perhaps they should have priced it in as a cost of doing business that they will not benefit from the misery that they bring.
It is no great surprise that we believe strongly in the Proceeds of Crime Act 2002, but it is important to ensure that it remains effective, two decades on, and that gaps are closed wherever they may exist. The Law Commission work commissioned by the Home Office was very valuable. Its 119 recommendations will help us to improve the process by which confiscation orders are made, ensure that orders are made realistic and proportionate, and improve the enforceability of orders. Those are noble goals, and we are grateful to the commission for its excellent work. We welcome and support clause 32 and schedule 4.
There is only one small change that I would suggest, and I am interested in the Minister’s views on it. I am grateful that he is letting me make my case first; sometimes with groups of amendments we get the case against what we are about to say before we have said it, which always seems a little unkind. I would like to see what he thinks about my amendment 62.
The Committee took evidence from Kennedy Talbot KC that dissipation was a material factor in delaying or preventing restraint orders. He suggested that we take it out. His evidence was of great interest:
“I am sure that the Committee is familiar with the power for the court to make restraint orders preventing people who are suspected of crime, and then charged with crime, from dealing with their assets. At the moment, a statutory proposal in the Bill is that the risk of dissipation factor—such risk needs to be established for an order to be made under case law, not under statute—should be specified. The answer, in my view, is to scrap the risk of dissipation, so that it is not a requirement.
In many cases, what prevents prosecutors from applying for restraint orders is that they feel they cannot meet that test. Normally, that is because the case is brought to them some time after an investigation first started. The defendants are often aware that they are being investigated, and the case law more or less establishes that unless you can show that a defendant is on the point of selling his house or moving £100,000 to the UAE or whatever it may be, you cannot get a restraint order. Scrap the risk of dissipation.”––[Official Report, Criminal Justice Public Bill Committee, 14 December 2023; c. 102, Q44.]
The challenge put to us by Kennedy Talbot KC is that although the risk of dissipation factor is well meant and was designed to find a fair balance as to effectiveness and proportionality between the individual and the collective, it is acting as a perverse incentive not to pursue confiscation orders or pursue assets. I do not think that that is what we want.
I must say, my amendment is possibly not the most elegant way of making that a reality. It would simply delete paragraph 25 of schedule 4, which relates to the risk of dissipation. There may be—in fact, there doubtlessly will be—other ways in which that could be done, and we would be very interested in that.
I am interested in what the Minister has to say in response because, if he is not willing to accept my amendment, I think it is incumbent on him to say whether he shares Kennedy Talbot KC’s concern. If he does, how else might we clear that test? But if he does not share it, why not, because that seemed a pretty reasonable point to me?
On Scotland and Northern Ireland, the Minister pre-empted a question that I was going to ask. This seems like another area where a four-nations approach would be desirable, so that there are no parts of the Union where someone is treated differently, or where it is better to base oneself to exploit differences in regimes. The Government have tabled an awful lot of amendment for this Committee stage. I would hope and expect them to slow down that approach over the rest of this Bill’s stages—in this and the other place—but we would very much welcome it, and they would have nothing to fear, if they tabled an amendment. Perhaps the Minister will say whether any further conversations are planned. Clearly, very effective conversations have taken place on the rest of the Bill, but I wonder whether conversations on this have ground to a halt. Could the Minister tell us whether this is an ongoing process?
Chris Philp
I will first respond to the questions about amendment 62, to which the shadow Minister just spoke. I agree with the concern that he is raising. We must ensure that the barrier is not set too high, and that these orders can be made so that, where there is a risk of dissipation, the assets can, essentially, be placed under control so that they cannot be sold—or “dissipated”, as the Bill puts it.
As the hon. Gentleman said, there is already case law that the court has developed. It cannot be done arbitrarily. The court is essentially freezing someone’s assets, or preventing them from disposing of them at least, and there should be some sort of test before that draconian—but, of course, sometimes necessary—step is taken. That is currently in case law; all we are doing here is putting it on to a statutory footing. Law enforcement partners have welcomed that, because it provides clarity where currently there is simply case law.
Therefore, the Committee could reasonably ask itself whether the way in which this is drafted is reasonable and whether the test is set at the right level. The relevant part is part 8 of schedule 4, which starts at line 18 of page 119 and sets out exactly what the test is. As we would expect, the first test is that the first to fifth conditions in this section of POCA already apply. Secondly, the critical phrase is in paragraph 25(2)(a):
“there is a real risk that relevant realisable property”—
meaning stuff that someone can sell—
“held by any person will be dissipated unless the Crown Court exercises the powers”.
Therefore, the test is set as there being a real risk that the relevant property may essentially be sold off. That is where the threshold is: “a real risk”.
Chris Philp
I will in just one moment. Then, to determine whether there is a real risk, the schedule sets out towards the end of page 119 what the court may have regard to. That includes the nature of the property and the extent to which steps have already been taken, which is only one consideration, not a determinative consideration. Other items include the circumstances of the person and evidence of their character, which means that, if they are a crook, the court would take extra care. It would also have regard to the nature of the defendant’s criminal conduct. Are they a fraudster? Are they into money laundering and moving cash around? It will also take into consideration the amount of money involved and the stage of proceedings. Presumably that means that the further advanced the proceedings, the more sensitive the court will be. None of those different factors is individually determinative, but they should all be considered. On page 119, line 24 of the Bill, schedule 4 inserts in the Proceeds of Crime Act 2002 the critical phrase,
“there is a real risk”.
I would be interested to hear the shadow Minister’s view on that point, and not on any other points he may wish to intervene on.
Alex Norris
The Bill defines many terms, and I hope that “crook” will become one such term at a later stage. It is a great phrase.
In previous debates, the Minister has said that putting things on the record may be valuable to future court interpretation. What I am hearing from the Government is a clear message that by “risk of dissipation”, we are talking about not acts of or in the throes of, but a much broader definition. That would be enough comfort to me on my amendment.
Chris Philp
Yes, I am very happy to give the shadow Minister that assurance and to state clearly on the record in Hansard that that is the Government’s intent, and I think it is also the Committee’s intent—I can see waves of agreement rippling around Committee Room 10. We do intend for this to be applied widely. This does not just mean that an asset is on the cusp of being sold; it is much wider than that. It means that any real risk that property might be sold should engage the provisions of this clause, and the judge should have the confidence and, when this is passed, the statutory basis to make that order. The shadow Minister is absolutely right that there is cross-party agreement that this should be quite widely interpreted by the courts, should it be passed. I absolutely put on the record what he was saying.
On the shadow Minister’s other question, discussions are ongoing with the devolved Administrations. We would be very happy to extend these provisions to them. As he said earlier, it is much better that these things are done on a UK-wide basis. We the UK Government are certainly engaging constructively. I am hoping to have more to say on Report. If those jurisdictions want to take up these provisions, I expect there will be an amendment on Report, but it would obviously require their agreement. That is certainly something we would want to facilitate.
Question put and agreed to.
Clause 32, as amended, accordingly ordered to stand part of the Bill.
Schedule 4
Confiscation orders: England and Wales
Amendment made: 49, in schedule 4, page 96, line 21, at end insert—
“(4A) After paragraph 9B (inserted by sub-paragraph (4)) insert—
‘Offences relating to things used in serious crime or vehicle theft
9C (1) An offence under section 1 of the Criminal Justice Act 2024 (articles for use in serious crime).
(2) An offence under section 3 of the Criminal Justice Act 2024 (electronic devices for use in vehicle theft).’” —(Chris Philp.)
This amendment adds the offences created by clauses 1 and 3 of the Bill to the offences listed in Schedule 2 to the Proceeds of Crime Act 2002 (criminal lifestyle offences).
Schedule 4, as amended, agreed to.
Clause 33
Suspended accounts scheme
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 33 and schedule 5 will enshrine in law a power for the Secretary of State to create a suspended accounts scheme, with details to be set out in regulations. The scheme will allow financial institutions, such as banks and building societies, to transfer to a Government-appointed scheme administrator amounts equivalent to the balances of customer accounts that have been suspended based on suspicion of criminality. These funds would then be used to finance projects relating to economic crime.
As part of its commitment to tackling economic crime, alongside its legal obligations—for example, to combat money laundering—the financial sector has been suspending customer accounts where it suspects criminal activity. Where practicable, our law enforcement agencies will then investigate such criminality. However, it is not always possible for law enforcement to investigate the alleged criminality to the point that a conviction can be secured, for a variety of reasons, including where the source of the funds and the owners cannot be identified, especially where techniques designed to obfuscate the funds’ origins or ultimate beneficial ownership have been deployed. As a result, quite a lot of money remains suspended across industry. From a survey conducted with the financial sector, it is estimated that it currently holds £200 million of suspected criminal funds in suspended accounts and that a further £30 million a year could be suspended in the future. There is currently no way to access those funds; they simply remain suspended.
This scheme presents an opportunity to leverage our world-class public-private partnership to extract the money that is currently suspended and to invest it in measures to combat economic crime. I am sure that we can all get behind that opportunity. We worked closely with industry partners on developing this measure and consulted with them. We held targeted stakeholder engagement to test the proposals, and they are broadly supported. I am grateful to the stakeholders for the work they have done. I think that this is quite a sensible measure: it will get more cash out of suspended accounts, where it is not doing any good, and into combating economic crime for the benefit of all of our constituents.
The Chair
Order. It is my fault—I started it—but let us concentrate on the Bill. I call the shadow Minister, Alex Norris.
Alex Norris
It is absolutely right that we do that, Dame Angela.
The clause and the schedule govern suspended bank accounts and, more pertinently, what happens to the money in those accounts. We should say on the record that it is right that banks are vigilant to the possibility of fraudulent activity and, when they suspect that it is taking place, that accounts are suspended. We know that that sort of regime and the culture of the industry have changed significantly in recent years. We could argue that there is a commercial disincentive to doing that, but banks clearly understand that being a trusted part of a system that does not want fraudulent activity or to have money washing around is good for everybody. That work and its creative use should be recognised, because, as the Minister says, if we held strictly to a criminal standard, there would be all sorts of reasons why that money would not be stopped. We know that good uses of terms and conditions for holding an account have been employed by the industry, which is welcome.
It is important to have a suspended account scheme in place so that those funds have somewhere to go. We support this clause and schedule. Earlier this week, I was getting very excited about the use of regulations rather than putting things in the Bill. This is a case where that is the right approach, and we look forward to good engagement while that is being developed.
Paragraph 114 of the explanatory note says:
“For the past…15 years, organisations in the financial sector (and to a lesser extent in other parts of the Anti-Money Laundering Regulated sector) have been suspending accounts and transactions where criminality is suspected. Organisations have been doing so on a private law basis taking into account their terms and conditions and threat analytics.”
Clearly, this has been going on for a while, and we are now catching up with a regime so that we can give some shape for releasing that money. It is sensible that the funds have somewhere to go, and of course we would support the purpose of that money being to go back into tackling economic crime. That is a good, virtuous loop.
I hope that the Minister will address this. We know that there has not been a scheme to release this money. Are we to understand from that paragraph of the explanatory note that there are 15 years’ worth of suspended funds just sat there? I do not see anything about that in the Bill, and I wonder whether the Minister can make it clear whether he anticipates there being anything in regulation that would mean that funds that predate the legislation would be out of scope of the scheme. I do not read anything about that in the Bill; as I said, my reading is that they are in. That gives rise to a very obvious question: how much money is there? That will be an issue of great interest for colleagues.
The beginning of schedule 5 says that financial institutions “may” take part in this scheme. I wonder whether the Minister got a sense from the consultation responses and the conversations that he has had with the industry of how widely he expects financial institutions to participate in the scheme and of whether there is a degree of risk—or any anxiety in the Home Office about there being a degree of risk—of displacement to financial institutions that are known not to take this action. Again, I suspect that most of the major players are doing this activity and therefore would wish to be part of it. I would be interested to know how widespread the Minister expects take-up to be.
It is right that there is a compensation mechanism for individuals who have their fund suspended and taken away, because mistakes can and doubtlessly will be made in this sort of scheme. Paragraph 5(1)(c) of schedule 5 governs that this ought to be part of the regulations, and we support that. I presume that that would be a liability against the scheme in its aggregate. Paragraph 5(2) states that it is possible to cap the amount of compensation money that the scheme can pay an institution. What is the reason for that? Clearly, there are institutions that are not being careful, so I presume that the measure covering the money they pay to the scheme is an incentive for them to be more careful in how they handle and freeze accounts. However, is there not a risk that shareholders or executives decide to cap the contribution at the compensation sum, so that they do not inadvertently create a liability on their balance sheet? The Minister might say that that will be covered by regulations, but there is nothing in the Bill to say that once a financial institution is part of the scheme, it must always be part of it, or that, for every account it suspends, it must send all of the money, in full, to the suspended accounts scheme.
The Government may not know the answer to that yet, but they must have thought about it because they have set up a compensation cap. If someone has had their account frozen incorrectly and they have not engaged with it for a number of years, that money is going to a suspended accounts scheme. If they then come back and say, “Hang on a minute, I’d like my money back,” it is not unreasonable—in fact, it is very reasonable—to think that they should get it back in full. The Government have chosen to cap that. That might be because they want to encourage good behaviour, but I am keen to get an explanation from the Minister. I really look forward to having, hopefully to a pounds and pence level, a sense of how much he thinks will go into this scheme when it is opened on day one.
Chris Philp
I mentioned this in my introductory remarks. It will apply to all the balances currently held, which includes all those balances accumulated over the last 15 years. The estimation is that that adds up to £200 million. We estimate that the inward flow each year will be £30 million or more. I hope that gives the shadow Minister a sense of the quantum.
We expect wide take-up across the whole financial services industry. Obviously, financial institutions are already suspending accounts, to the tune of £200 million up to date and, we think, £30 million or more a year going forward. Our engagement suggests that there will be wide take-up.
On the shadow Minister’s point about the limit to the compensation, the last words of paragraph 5(2) of schedule 5 are “in any period”, which I presume is to ensure that the scheme remains solvent. He is right to say that any compensation will be paid from inside the scheme and not subsidised by the wider taxpayer, so it will be internally financed, not creating any wider financial liability. It may be the case that, if there is one big claim, the “in any period” caveat would allow for the compensation to be paid over more than one period.
The shadow Minister also asked whether this might inadvertently create a perverse incentive for financial institutions to only make transfers up to the limit of the cap. Clearly, where that cap is set requires some thought. That is a very good question to dig into when these regulations are brought forward and debated. I will make sure that colleagues in the Home Office designing these regulations do so with that concern in mind. When we bring the regulations back, the shadow Minister or his colleagues can have a look at how that is designed. He has made a good point, and we will make sure it is reflected in the way in which the regulations are designed in due course.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Schedule 5 agreed to.
Clause 34
Electronic monitoring requirements
Chris Philp
I beg to move amendment 84, in clause 34, page 27, line 16, at end insert “and Northern Ireland”.
This amendment and amendments 85 to 88 provide that a serious crime prevention order made in Northern Ireland may include electronic monitoring requirements.
The Chair
With this, it will be convenient to discuss the following:
Government amendments 85 to 89.
Clause stand part.
Government amendments 90 to 108, 110 to 113, 115, 118, and 120 to 132.
Chris Philp
I have about 10 minutes on each amendment, if that is all right. [Laughter.] No?
Chris Philp
I would like to remain popular with colleagues, so I will not do that.
The Government amendments relate to clauses 34 to 37, which seek to strengthen the operation of serious crime prevention orders. SCPOs are a powerful tool for preventing and disrupting the activities of the highest-harm criminals involved in serious crime. However, they are not currently being used to maximum effect and their use is significantly lower than was when they were introduced in the Serious Crime Act 2007.
As drafted, clauses 34 to 37 apply to England and Wales only. Having consulted the Northern Ireland Department of Justice, we tabled the amendments to extend the application of the clauses to Northern Ireland, which will ensure parity between England and Wales and Northern Ireland when it comes to SCPOs. Scotland will keep the existing regime, as set out in the 2007 Act, whereas Northern Ireland will benefit from the various provisions of clauses 34 to 37. In particular, I draw the Committee’s attention to the express power for courts to impose electronic monitoring; the opportunity for a wider range of frontline agencies to apply directly to the High Court for an SCPO; the introduction of a prescribed set of notification requirements for these orders; and the enabling of the Crown court in Northern Ireland to make an SCPO on acquittal where the two-limb test is met.
Ideally, we would apply these measures on a UK-wide basis. However, at the request of the Scottish Government, they will not be extended to Scotland at this time. I think it would be better if they were, but on this occasion we will respect the request made by the Scottish Government. However, we have considered how we can manage the differences in regime between Scotland and the rest of the UK once the measures come into force.
Scotland will, of course, continue to benefit from the existing SCPO regime under the 2007 Act, and in instances where an SCPO made in England, Wales or Northern Ireland is breached, the offender will not be able simply to flee to Scotland. The offence of breaching an order, as set out in the 2007 Act, remains a UK-wide offence, so enforcement against breach continues on a UK-wide basis. The exception to that will be in breaches of the prescribed notification requirements in clause 36, as the offence of not providing that information will apply to England, Wales and Northern Ireland but not to Scotland.
That is the substance of the amendments. As for the substance of clause 34 itself—I think that we will talk about clauses 35, 36 and 37 separately—it provides an express power for the courts to impose an electronic monitoring requirement as part of an SCPO. Tagging the subject will be used to monitor their compliance with various relevant terms, such as an exclusion zone or a curfew, and that will make the orders more effective. They are strengthened in other ways too, but those ways are set out in clauses 35 to 37, which we will talk about later. Clause 34 provides for those electronic monitoring or tagging obligations to be imposed as part of the SCPO.
Alex Cunningham
I am sure that the Government Whip, in particular, will be pleased to know that I am going to make one speech to cover clauses 34 to 37, and it is relatively brief.
Clauses 34 to 37 make several amendments to the Serious Crime Act 2007, in relation to serious crime prevention orders, that will apply to England and Wales only.
The Chair
Order. We are debating clause 34. I know that the clauses are connected, but there will be separate debates on clauses 35, 36 and 37. I wonder whether the hon. Gentleman could concentrate on clause 34 and all the amendments to it. I will call him again at the appropriate time if he wants to make points specific to clauses 35, 36 or 37.
Alex Cunningham
I will be guided by what you say, Dame Angela.
We support the changes proposed in relation to clause 34 on electronic monitoring requirements. We recognise, as the Minister did, that SCPOs can be a powerful tool for disrupting the activities of the highest-harm serious and organised criminals. The orders are not currently being used to maximum effect and clause 34 amends the 2007 Act to strengthen and improve their functioning. Applications to the High Court have been significantly lower than anticipated since the 2007 Act was passed. The idea is to streamline the process for the police and other law enforcement agencies, place restrictions on offenders or suspected offenders, and stop them from participating in further crime.
As I have said before—it is particularly pertinent to clause 34—the Government have recognised the Bill’s many weaknesses, evidenced by the many amendments they have tabled. In fact, I do not recall, having scrutinised half a dozen justice Bills, seeing seen so many amendments to one clause. Even with the amendments, the Bill will not bring about the changes necessary in the light of the crisis in our probation system, which will have a major role to play in the work created by this clause. I recognise what is, in fact, the replacement of funding to the probation service outlined by the Under-Secretary of State for Justice, the hon. Member for Newbury. I acknowledge that we also now have additional staff—4,000 people. That is very good news, but the probation service is still playing catch-up, and the people recruited are of course very inexperienced in comparison with those who have left the service.
It was not so many years ago that the then Justice Secretary, the right hon. Member for Epsom and Ewell (Chris Grayling), implemented a disastrous privatisation of the service, and it has been under a huge strain ever since. Even with the partial reversal of those reforms in 2021 with the partial renationalisation of probation, the service is still facing huge challenges and pressures due to a host of issues. That impacts very much on the work introduced by the clause.
I will quote directly from a report from the chief inspectorate that contains important context. It states:
“We’ve found chronic staff shortages in almost every area we’ve visited and poor levels of management supervision – as well as large gaps in whether the needs of people on probation that might have driven their past offending are being met.
It swiftly became clear that the service was thousands of officers short of what was necessary”—
I acknowledge that more have been more recruited—
“to deliver manageable workloads under the new target operating model for the re-unified service…68 per cent of probation officers and 62 per cent of PSOs rated their caseloads as being… ‘unmanageable’”.
Against that backdrop, does the Minister expect these changes to fulfil their statedobjectives?
Furthermore, the outgoing chief inspector of probation, Justin Russell, reported in September that
“chronic staffing shortages at every grade…have led to what staff report perceive to be unmanageable workloads”.
The Government frequently boast about the funding put into the recruitment of staff and having beaten their target of recruiting 1,000 trainee probation officers. However, that should not distract from the huge problems around retention and burnout in the service. The probation system’s own case load management tool shows that probation officers are working at a case load of between 140% and 180% of their capacity. It should be 90% 95%, so half the current load, for staff to do their job effectively.
In the year to March 2023, 2,098 staff left the probation service, which is an increase of 10% on the year before. Two thirds of those had five or more years’ experience; 28% of probation officers who left in 2023 had been in service for less than four years, so something clearly needs to be done to recruit and retain staff; and 19% of trainee probation officers recruited in 2021 have left the service.
The staffing shortages and retention issues put a strain on those doing more work than they can manage. In 2022, 47,490 working days were lost due to stress among probation staff; the average working-day loss per staff member due to stress was two days. We know that that has an impact on public safety. The recent report by Justin Russell warned about the impact that cuts to probation were having and said that there was “consistently weak” public protection. That followed a similar report in 2020.
In the cases of Damien Bendall and Jordan McSweeney, we saw the impact of the poor conditions facing probation. In both cases, incorrect risk assessments meant that junior probation officers were dealing with offenders who should have been classed as a high risk. The Government’s impact assessment states:
“There is insufficient data with which to monetise the benefits of this measure”.
Can the Minister address whether data collection in this department could do with improvement?
The impact assessment for the Sentencing Bill, which is being scrutinised in parallel to this Bill, shows that the case load for probation will increase by between 1,700 and 6,800. That will cost around £3 million for probation, with a running cost of between £3 million and £4 million a year—a good measure, with real costs and issues behind it. I look forward to the Minister’s response.
Chris Philp
Many of the questions concerning the probation service are for the Ministry of Justice, not the Home Office, but I know that the Ministry of Justice is investing more resources. Now that the probation service has been effectively renationalised, there is a lot more direct control over its activities and some of the quality problems that arose a few years ago. It is worth saying that it is not the probation service that manages SCPOs, but the National Crime Agency, but I wanted to offer the hon. Gentleman reassurance about the probation service.
The National Crime Agency supports these measures. In last two years, between 2021-22 and the current financial year, 2023-24, there has been a 21% increase in its budget from £711 million to £860 million, giving it quite a lot of bandwidth to monitor these orders. The issue, really, is getting more orders made, but the monitoring of them is also important, as the shadow Minister says.
Amendment 84 agreed to.
Amendments made: 85, in clause 34, page 27, line 18, after “Wales” insert “or Northern Ireland”.
See the explanatory statement to amendment 84.
Amendment 86, in clause 34, page 27, line 28, at end insert “—
(a) where the order is made in England and Wales,”.
This amendment is consequential on amendment 87.
Amendment 87, in clause 34, page 27, line 30, at end insert—
“(b) where the order is made in Northern Ireland, must be of a description specified in an order made by the Department of Justice under Article 40(3) of the Criminal Justice (Northern Ireland) Order 2008 (N.I. 1).”
This amendment provides that the person responsible for conducting electronic monitoring must be a person specified by the Department of Justice under Article 40(3) of the Criminal Justice (Northern Ireland) Order 2008 (N.I. 1).
Amendment 88, in clause 34, page 28, line 23, leave out “The court” and insert
“A court in England and Wales”.
This amendment sets out the requirements to be satisfied for a court in England and Wales to impose an electronic monitoring requirement. It is limited to England and Wales because electronic monitoring is available throughout Northern Ireland.
Amendment 89, in clause 34, page 28, line 29, leave out “In” and insert “For the purposes of”.—(Chris Philp.)
This amendment clarifies that the definitions in new section 5C(5) are relevant to subsection (4)(a) (but the defined terms are not all set out in subsection (4)(a)).
Clause 34, as amended, ordered to stand part of the Bill.
Clause 35
Applicants for an order: England and Wales
Amendments made: 90, in clause 35, page 30, line 16, leave out “the appropriate court” and insert “a court or sheriff”.
This amendment restates the position under sections 8 of the Serious Crime Act 2007 in relation to applications for serious crime prevention orders to the High Court of Justiciary or the sheriff in Scotland under section 22A of that Act.
Amendment 91, in clause 35, page 30, leave out lines 32 and 33 and insert—
“(ii) the Director of the Serious Fraud Office,
(iii) the Director General of the National Crime Agency,
(iv) the Commissioners for His Majesty’s Revenue and Customs,
(v) the chief officer of police, or
(vi) the Chief Constable of the Ministry of Defence Police, and”.
This amendment provides that the persons listed in the amendment may apply to the High Court in Northern Ireland for a serious crime prevention order.
Amendment 92, in clause 35, page 30, line 34, leave out from “by” to end of line 39 and insert
“a person listed in paragraph (a)(iii) to (vi), only if the person has consulted the Director of Public Prosecutions for Northern Ireland.”
This amendment omits the requirement that a chief officer of police in Northern Ireland may only apply for a serious crime prevention order if it is terrorism-related. It also provides that each of the applicants listed in paragraph (a)(iii) to (vi) must consult the Director of Public Prosecutions for Northern Ireland before making an application.
Amendment 93, in clause 35, page 30, line 39, at end insert—
“(1D) A serious crime prevention order may be made by the Crown Court in Northern Ireland—
(a) only on an application by—
(i) the Director of Public Prosecutions for Northern Ireland,
(ii) the Director of the Serious Fraud Office, or
(iii) a chief officer of police, and
(b) in the case of an application by a chief officer of police, only if—
(i) it is an application for an order under section 19 or19A that is terrorism-related (see section 8A), and
(ii) the chief officer has consulted the Director of Public Prosecutions for Northern Ireland.”
This amendment makes provision for the Director of the Serious Fraud Office to apply to the Crown Court in Northern Ireland for a serious crime prevention order.
Amendment 94, in clause 35, page 30, leave out lines 41 to 44 and insert—
“(a) in paragraph (a)—
(i) omit sub-paragraphs (i) and (iii);
(ii) after sub-paragraph (iv) insert—
“(v) in any other case, the person who applied for the order;”;
(b) for paragraph (b) substitute—
“(b) in relation to a serious crime prevention order in Northern Ireland, the person who applied for the order.””
This amendment makes provision for the meaning of “relevant applicant authority” for serious crime prevention orders in Northern Ireland, and is consequential on amendment 91.
Amendment 95, in clause 35, page 31, line 17, at end insert—
“(4A) In section 28 (power to wind up companies: Northern Ireland)—
(a) in subsection (1)—
(i) in the words before paragraph (a), after “Northern Ireland” insert “or the Director of the Serious Fraud Office”;
(ii) in paragraph (b), for “of Public Prosecutions for Northern Ireland” substitute “concerned”;
(b) for subsection (1A) substitute—
“(1A) A person mentioned in section 8(1C)(a)(iii) to (vi) may present a petition to the court for the winding up of a company, partnership or relevant body if—
(a) the company, partnership or relevant body has been convicted of an offence under section 25 in relation to a serious crime prevention order made on an application by the person, and
(b) the person considers that it would be in the public interest for the company, partnership or (as the case may be) relevant body to be wound up.”;
(c) in subsection (3), for the words from “the Director of Public Prosecutions for Northern Ireland” to the end substitute “a person who is authorised to present a petition in accordance with subsection (1) or (1A).”
This amendment makes provision for each of the new applicants for a serious crime prevention order in Northern Ireland to be able to present a petition to the court for the winding up of a body which has been convicted of an offence in relation to an order made on the application of the applicant. It is consequential on amendment 91.
Amendment 96, in clause 35, page 31, line 18, at end insert—
“(za) in paragraph 12—
(i) in paragraphs (a) and (b), after “England and Wales” insert “or Northern Ireland”;
(ii) in paragraph (c), after “section 27” insert “or 28”;”.
This amendment extends the functions of the Director of the Serious Fraud Office in relation to serious crime prevention orders in Northern Ireland, and is consequential on amendment 91.
Amendment 97, in clause 35, page 31, line 24, after “England and Wales” insert “or Northern Ireland”.
This amendment and amendments 98 and 99 extend the functions of the Director General of the National Crime Agency in relation to serious crime prevention orders in Northern Ireland, and are consequential on amendment 91.
Amendment 98, in clause 35, page 31, line 29, at end insert “or Northern Ireland”.
See the explanatory statement to amendment 97.
Amendment 99, in clause 35, page 31, line 33, after “section 27” insert “or 28”.
See the explanatory statement to amendment 97.
Amendment 100, in clause 35, page 31, line 43, after “England and Wales” insert “or Northern Ireland”.
This amendment and amendments 101 and 102 extend the functions of the Commissioners for His Majesty’s Revenue and Customs in relation to serious crime prevention orders in Northern Ireland, and are consequential on amendment 91.
Amendment 101, in clause 35, page 32, line 4, at end insert “or Northern Ireland”.
See the explanatory statement to amendment 100.
Amendment 102, in clause 35, page 32, line 8, after “section 27” insert “or 28”.
See the explanatory statement to amendment 100.
Amendment 103, in clause 35, page 33, line 7, after “England and Wales” insert “or Northern Ireland”.
This amendment and amendments 104 to 105 extend the functions of the Chief Constable of the Ministry of Defence Police in relation to serious crime prevention orders in Northern Ireland, and are consequential on amendment 91.
Amendment 104, in clause 35, page 33, line 12, at end insert “or Northern Ireland”.
See the explanatory statement to amendment 103.
Amendment 105, in clause 35, page 33, line 15, at end insert “or Northern Ireland”.
See the explanatory statement to amendment 103.
Amendment 106, in clause 35, page 33, line 20, after “England and Wales” insert “or Northern Ireland”.—(Chris Philp.)
See the explanatory statement to amendment 103.
Chris Philp
The clause amends the Serious Crime Act 2007 to provide additional agencies with the power to apply directly to the High Court for a SCPO. The High Court can already make an SCPO upon application by the Crown Prosecution Service and the Serious Fraud Office, as well as by the police in terrorism cases. However, as we have heard already, these orders are not being used to maximum effect. In the 10 years between 2011 and 2021, only two applications were made to the High Court for an SCPO in the absence of a conviction, of which only one was successful.
The clause extends the power to make applications to the High Court for an SCPO to other agencies, particularly the National Crime Agency, His Majesty’s Revenue and Customs, the police in all cases, the British Transport police and the Ministry of Defence police, so that many more law enforcement agencies can use it. The clause also sets out who is authorised to make those applications, and it streamlines the process for doing so, in the hope that that will encourage more applications. In many cases where criminal proceedings cannot be pursued, those agencies will be best placed to lead the process of applying for an SCPO as they will have in-depth knowledge of the case and subject matter expertise.
The CPS is responsible for evaluating the merits of an application to ensure that an SCPO is not being used inappropriately as an alternative to prosecution, and it can intervene if it thinks prosecution would be more appropriate. In recognition of this role, the agencies being given the right to apply directly to the High Court will be required to consult the CPS before making an application. It will be for the law enforcement agency that applied for the SCPO to monitor and enforce it once it is imposed on the individual concerned.
The clause also extends to those additional agencies the power to submit a petition to the court for the winding-up of a company or partnership. A petition can be submitted only if the body has failed to comply with the terms of the SCPO and it is in the public interest for the body to be wound up.
In summary, we hope that extending the range of law enforcement agencies that can apply for an SCPO will, when combined with the other streamlining measures, help to encourage more applications. I commend the clause to the Committee.
Question put and agreed to.
Clause 35, as amended, accordingly ordered to stand part of the Bill.
Clause 36
Notification Requirements
Amendments made: 107, in clause 36, page 33, line 35, at end insert “and Northern Ireland”.
This amendment and amendments 108 and 110 to 113 make provision for notification requirements by persons other than individuals who are subject to a serious crime prevention order in Northern Ireland.
Amendment 108, in clause 36, page 33, line 38, after “Wales” insert “or Northern Ireland”.—(Chris Philp.)
See the explanatory statement for amendment 107.
Chris Philp
I beg to move amendment 109, in clause 36, page 33, line 39, leave out from second “the” to end of line 40 and insert
“first day on which any of its provisions comes into force—”.
This amendment adjusts the time period within which a notification under section 15A(1) must be made.
The Chair
With this it will be convenient to discuss the following:
Government amendments 114 and 116.
Amendment 69, in clause 36, page 35, line 2, at end insert
“or, where the person is in custody, within three days of the day on which the person is released from custody,”.
This amendment would mean that, where a person in custody is made subject to a serious crime prevention order, the three day time period within which they must notify the police of notifiable information does not start until the day they are released from custody.
Government amendments 117 and 119.
Clause stand part.
Chris Philp
The clause amends the Serious Crime Act 2007 to provide that all those subject to an SCPO are required to provide the police with specified personal data as standard. It includes a set of appropriate requirements for bodies corporate. All those requirements can currently be attached to an SCPO at the discretion of the court, on a case-by-case basis, but the clause will place the same set of notification requirements on all individuals without the need for case-by-case applications.
Most respondents to the public consultation agreed with this proposal. Many highlighted that standardising notification requirements will create consistency and save the court some time. The notifiable information includes information such as the person’s address, employment details, telephone numbers, email address and some financial information.
Government amendments 117 and 119 will add to the list of notification requirements. The clause already includes things such as usernames and display names for social media, because monitoring these individuals’ activity online is very important. Amendment 117 adds to that list a requirement so that, in addition to usernames for social media, the relevant individuals must notify the police of any names used to access, or that identify them on, an online video-gaming service with messaging functionality. Law enforcement agencies report that such gaming websites are frequently used by individuals to communicate with other people, including in an attempt to circumvent restrictions on communications detailed in their order, so that they may re-establish their criminal enterprises.
Tightening the legislation will remove that loophole.
Amendments 109 and 116 provide that the time within which an individual made subject to an SCPO must provide the relevant information to the police is three days from the day the order comes into force—not three days from the day the order is made, as drafted. Although some orders come into force on the day they are made, others do not until, for example, the individual has served their prison sentence. The amendments allow for those different circumstances and will ensure that individuals do not inadvertently fall foul of the offence of failing to provide the required information when that would not be the Government’s intention or be reasonable. The amendments have the same effect as amendment 69, tabled by the hon. Member for Stockton North—I apologise that the Government have adopted the measure, if that is the right word.
Chris Philp
There we are. We have enthusiastically embraced the hon. Gentleman’s idea. I give him and his colleagues full credit for conceiving it. I acknowledge that the Government amendment does the same thing as his amendment 69 would do, for which I thank and congratulate him.
Finally, Government amendment 114 is a drafting amendment—it might even be a technical drafting amendment—to ensure that the definition of a “relevant body” in proposed new section 15A of the Serious Crime Act 2007 carries through to the proposed new section 15C. I am sure that even the shadow Minister will agree that that is fairly technical in nature.
Alex Cunningham
This has been a long time coming. The Minister and I have looked across at each other many times in this room over the past few years, and I think this is the first time he has accepted that we have actually got it right. I am obliged to him for that. This set of measures improves the efficiency of our court system, and anything that we can do to enable that is critical. Adding the information to the system automatically will make it much easier in future to ensure that those people are properly monitored and can be contacted wherever they are. We are happy to support the clause.
Amendment 109 agreed to.
Amendments made: 110, in clause 36, page 34, leave out lines 4 to 6 and insert—
“(3) A person who is subject to a serious crime prevention order made by a court in England and Wales commits an offence under the law of England and Wales if, without reasonable excuse, the person fails to comply with a requirement imposed by subsection (1) as it applies by virtue of the order.
(3A) A person who is subject to a serious crime prevention order made by a court in Northern Ireland commits an offence under the law of Northern Ireland if, without reasonable excuse, the person fails to comply with a requirement imposed by subsection (1) as it applies by virtue of the order.”
This amendment clarifies the jurisdiction in which a person commits an offence for failure to comply with a notification requirement under section 15A.
Amendment 111, in clause 36, page 34, line 7, leave out “on summary conviction to a fine” and insert “—
(a) on summary conviction in England and Wales, to a fine;
(b) on summary conviction in Northern Ireland, to a fine not exceeding level 5 on the standard scale.”
This amendment makes provision for the penalties to apply in Northern Ireland for a failure to comply with the notification requirements set out in section 15A.
Amendment 112, in clause 36, page 34, leave out lines 22 to 24 and insert—
“(3) A person who is subject to a serious crime prevention order made by a court in England and Wales commits an offence under the law of England and Wales if, without reasonable excuse, the person fails to comply with a requirement imposed by subsection (2) as it applies by virtue of the order.
(4) A person who is subject to a serious crime prevention order made by a court in Northern Ireland commits an offence under the law of Northern Ireland if, without reasonable excuse, the person fails to comply with a requirement imposed by subsection (2) as it applies by virtue of the order.”
This amendment clarifies the jurisdiction in which a person commits an offence for failure to comply with a notification requirement imposed by section 15B.
Amendment 113, in clause 36, page 34, line 25, leave out “on summary conviction to a fine” and insert “—
(a) on summary conviction in England and Wales, to a fine;
(b) on summary conviction in Northern Ireland, to a fine not exceeding level 5 on the standard scale.”
This amendment makes provision for the penalties to apply in Northern Ireland for a failure to comply with the notification requirements set out in section 15B.
Amendment 114, in clause 36, page 34, line 36, at end insert—
“(3) In this section “relevant body” has the same meaning as in section 15A.”
This amendment inserts a definition of “relevant body” into section 15C.
Amendment 115, in clause 36, page 35, line 1, after “Wales” insert “or Northern Ireland”.
This amendment and amendments 118 and 120 to 123 make provision for notification requirements by individuals who are subject to a serious crime prevention order in Northern Ireland.
Amendment 116, in clause 36, page 35, line 2, leave out from “with” to end and insert “the first day on which any of its provisions comes into force,”.
This amendment adjusts the time period during which a notification under section 15D(1) must be made.
Amendment 117, in clause 36, page 35, line 13, at end insert—
“(da) any name—
(i) which the person uses to access a video game that is a user-to-user service or that is available as part of a user-to-user service, or
(ii) the function of which is to identify the person as the user of such a game;”.
This amendment requires the subject of a serious crime prevention order to notify the police of any name used to access a video game which is a user-to-user service or which identify the person as the user of such a game.
Amendment 118, in clause 36, page 35, leave out lines 24 to 36.
This amendment and amendment 120 clarify the jurisdiction in which a person commits an offence for failure to comply with a notification requirement under section 15D and make provision for the penalties to apply on conviction in Northern Ireland.
Amendment 119, in clause 36, page 36, line 12, at end insert—
“(e) ‘user-to-user service’ has the meaning given by section 3 of the Online Safety Act 2023.”
This amendment defines “user-to-user service” for the purpose of amendment 117.
Amendment 120, in clause 36, page 36, line 12, at end insert—
“(6) A person who is subject to a serious crime prevention order made by a court in England and Wales commits an offence under the law of England and Wales if the person—
(a) fails, without reasonable excuse, to comply with a requirement imposed by subsection (1) as it applies by virtue of the order;
(b) notifies the police, in purported compliance with such a requirement, of any information which the person knows to be false.
(7) A person guilty of an offence under subsection (6) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine, or both.
(8) A person who is subject to a serious crime prevention order made by a court in Northern Ireland commits an offence under the law of Northern Ireland if the person—
(a) fails, without reasonable excuse, to comply with a requirement imposed by subsection (1) as it applies by virtue of the order;
(b) notifies the police, in purported compliance with such a requirement, of any information which the person knows to be false.
(9) A person guilty of an offence under subsection (8) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine, or both.”
See the explanatory statement to amendment 118.
Amendment 121, in clause 36, page 36, line 18, after “person” insert—
“who is subject to a serious crime prevention order made by a court in England and Wales”.
This amendment and amendments 122 and 123 clarify the jurisdiction in which a person commits an offence for failure to comply with section 15E(1).
Amendment 122, in clause 36, page 36, line 21, at end insert—
“as it applies by virtue of the order”.
See the explanatory statement to amendment 121.
Amendment 123, in clause 36, page 36, line 30, at end insert—
“(3A) A person who is subject to a serious crime prevention order made by a court in Northern Ireland commits an offence under the law of Northern Ireland if the person—
(a) fails, without reasonable excuse, to comply with a requirement imposed by subsection (1) as it applies by virtue of the order;
(b) notifies the police, in purported compliance with such a requirement, of any information which the person knows to be false.
(3B) A person guilty of an offence under subsection (3A) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine, or both.”
See the explanatory statement to amendment 121.
Amendment 124, in clause 36, page 37, leave out lines 10 and 11 and insert—
“(3) A person who is subject to a serious crime prevention order made by a court in England and Wales commits an offence under the law of England and Wales if the person fails, without reasonable excuse, to comply with subsection (1) in relation to the notification.”
This amendment and amendment 125 make provision for a person to commit an offence under section 15G(1) under the law of Northern Ireland.
Amendment 125, in clause 36, page 37, line 17, at end insert—
“(5) A person who is subject to a serious crime prevention order made by a court in Northern Ireland commits an offence under the law of Northern Ireland if the person fails, without reasonable excuse, to comply with subsection (1) in relation to the notification.
(6) A person guilty of an offence under subsection (5) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine, or both.”
See the explanatory statement to amendment 124.
Amendment 126, in clause 36, page 37, line 20, after “Wales” insert “or Northern Ireland”.—(Chris Philp.)
This amendment provides for a court in Northern Ireland to make provision in a serious crime prevention order about how notifications under section 15A to 15E are to be made.
Clause 36, as amended, ordered to stand part of the Bill.
Clause 37
Orders by Crown Court on acquittal or when allowing an appeal
Amendments made: 127, in clause 37, page 38, leave out lines 19 to 21 and insert—
“(2) A court that makes an order by virtue of subsection (1) in the case of a person who is already the subject of a serious crime prevention order in England and Wales must discharge the existing order.
(2A) The Crown Court in Northern Ireland may make an order under this section in relation to a person who is acquitted of an offence by or before the court, or where the court allows a person’s appeal against a conviction for an offence, if—
(a) the court is satisfied that the person has been involved in serious crime (whether in Northern Ireland or elsewhere), and
(b) the court has reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime in Northern Ireland.
(2B) A court that makes an order by virtue of subsection (2A) in the case of a person who is already the subject of a serious crime prevention order in Northern Ireland must discharge the existing order.”
This amendment and amendment 128 make provision for the Crown Court in Northern Ireland to make serious crime prevention orders on acquittal or when allowing an appeal.
Amendment 128, in clause 37, page 38, line 27, at end insert
“or (as the case may be) Northern Ireland”.
See the explanatory statement to amendment 127.
Amendment 129, in clause 37, page 38, line 38, at end insert—
‘(5A) In section 3(4), for “section 1(2)(a)” substitute “sections 1(2)(a) and 19A(2A)(a)”.’
This amendment is consequential on amendments 127 and 128.
Amendment 130, in clause 37, page 39, line 4, after “19A(1)” insert “and (2A)”.—(Chris Philp.)
This amendment is consequential on amendments 127 and 128.
Question proposed, That the clause, as amended, stand part of the Bill.
Chris Philp
Clause 37 also amends the Serious Crime Act 2007 to provide the Crown court the power to impose an SCPO on a person who has been acquitted or when allowing an appeal. The High Court already has the power to impose an SCPO in lieu of conviction, provided that it meets the two-limb test set out in the 2007 Act: the court must be satisfied that a person has been involved in a serious crime, presumably on the balance of probability, and it must have reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime. The serious offences are defined in schedule 1 to the 2007 Act, and they include slavery, drug trafficking, firearms offences, terrorism, armed robbery, people trafficking and economic crime, including fraud, money laundering, sanctions evasion and offences in relation to the public revenue.
Clause 37 sets out that the Crown court can impose an SCPO on acquittal or when allowing appeal if the same test is met. The Government believe that the Crown court, on application from the Crown Prosecution Service or the Serious Fraud Office, is best placed to decide whether to make an order against a person whom it has just acquitted, given that the court will have heard all the evidence relating to the person’s conduct and can ensure that the two-limb test has been met.
There are reasons why a person may be acquitted of a particular offence where the standard of proof is high—beyond reasonable doubt—but where an SCPO may still be appropriate: for example, when the evidence may not satisfy the court beyond reasonable doubt that a serious offence has been committed, but there may be sufficient evidence to satisfy the court that the person has been involved in serious crime. The court could then decide that imposing an SCPO would protect the public.
There is precedent for this approach: domestic abuse protection orders under the Domestic Abuse Act 2021 and restraining orders under the Protection from Harassment Act 1997 also allow for court orders to be made against individuals on acquittal or when allowing an appeal. This clause will streamline the process and help ensure that SCPOs can be used more frequently where appropriate.
Alex Cunningham
The Minister rightly said that, when somebody is acquitted but the court is considering the imposition of an SCPO, the grounds on which the order is made must be very robust and they must pass the necessary tests. How do we ensure that that happens? Given that these people have been acquitted of an offence, will there be any report to Ministers or to Parliament on how the clause is working? It is significant if a person is declared innocent but is still subject to a control order. I would welcome clarity on whether we would have feedback on that.
Chris Philp
The shadow Minister asks how he can be sure that these orders will be used reasonably. The answer to that lies in the two-limb test, which was set out in the 2007 Act. I guess it must have been either the Blair Government or the Brown Government who set out the test. It is that the court—now it will obviously be the Crown court as well as, previously, the High Court—is satisfied that a person has been involved in serious crime and that it has reasonable grounds to believe that the order will protect the public. The protection really is that the court must be satisfied of those two things. All we are really doing is extending to the Crown court the ability that the High Court has had already in applying those tests, which have been around for the past 17 years.
Jess Phillips
I absolutely do not expect the right hon. Gentleman to have right now the data that I am about to ask for; that would be unreasonable. He raised the case of DVPOs, which are not in practice being used quite yet; it is still just a pilot up in the north-west. I wonder how many cases we have seen where this has happened under the restraining order that he outlined. I just want to feel confident that courts will actually do this, because I can envisage thousands of cases where it would absolutely be the right thing to be happening, but I have personally never seen it in cases of acquittal. I just wonder whether some sort of data—I do not expect it now—could be provided to the Committee about how it has worked with regard to restraining orders.
Chris Philp
I thank the hon. Member for her question. She has anticipated the fact that that data is not immediately at my fingertips, but I would be happy to provide her, by way of follow-up correspondence, with the data that she has just requested.
In relation to monitoring, which I think the shadow Minister asked about, there will be post-legislative review, three to five years after Royal Assent, that will check up on progress and how this is being used in practice. We do want to ensure that it is properly used, in the sense that it is applied to all the cases where it could protect the public. The hon. Member for Birmingham, Yardley is, I think, right to highlight the risk that it might not be used as frequently as it should be, so we need to ensure that the Crown Prosecution Service, the barristers who are presenting these cases before the court, and the court itself—Crown court judges—are fully informed about this power once we pass it.
Of course, being able to issue an SCPO at the point of acquittal—there and then, on the spot—is much easier than having to make a separate application to the High Court, which I can imagine might get forgotten about, so this should result in a much larger number of SCPOs: the judge can do it on the spot, on acquittal, having just heard all the evidence, and without the need for a whole separate application and process in the High Court to be gone through. But we should definitely monitor the situation to ensure that the power is actually used. I think that probably answers the points that have been raised.
Question put and agreed to.
Clause 37, as amended, accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Westminster Hall
(3 months, 3 weeks ago)
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Backbench Business
(3 months, 3 weeks ago)
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COP10: WHO Framework Convention on Tobacco Control
(3 months, 3 weeks ago)
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Andrew Lewer (Northampton South) (Con)
I beg to move,
That this House has considered COP10 to the WHO Framework Convention on Tobacco Control.
It is a pleasure to serve under your chairmanship, Mr Vickers. I thank the co-sponsors of today’s debate, the hon. Members for Ealing, Southall (Mr Sharma), and for Linlithgow and East Falkirk (Martyn Day). I also thank all colleagues who have requested to speak, and the Backbench Business Committee for giving this application the urgent consideration that was asked for. The fact that Members wished to contribute to this debate, and to many others on similar topics of late, demonstrates how important this issue is across our United Kingdom.
I am pleased to see my right hon. Friend the Minister in her place, and of course I welcome her back to Government. I say that with no small amount of friendly bias, as she and I are constituency neighbours in Northamptonshire and have known each other for a very long time. We look forward to hearing from her later. I also welcome the shadow Minister, the hon. Member for Bristol South (Karin Smyth); I am keen for her to share her perspective on today’s proceedings. I state for the record that I have served as a vice-chair of the all-party parliamentary group for vaping.
I beg your indulgence, Mr Vickers, as I set the scene for why we are here today and outline the importance of what we are discussing. My co-sponsors and I were clear that this debate is not yet another opportunity to opine generally about smoking and vaping, or to merely rehash some of the well-known talking points that arise when we talk about these issues. Hopefully, it will not be a debate in which each side of the political divide claims to be cloaked in unique righteousness. I was pleased to have tripartite support for the debate application, and even more pleased that colleagues from a wide array of political parties, and from all four parts of the UK, have expressed a desire to speak in this and related debates.
It has been a stressful few days in Parliament. In some senses, the timing of this debate is very important, as it comes ahead of the 10th conference of the parties, but in other senses it is less fortunate, coming as it does straight after what we have been through over the past two or three days. Nevertheless, the debate is an opportunity for this mother of Parliaments to show our democracy at its best. We in the legislature can come together on a non-party basis to question the Executive and hold the Government to account. We should be conscious that many people from around the world will be watching these proceedings, given that the debate relates to international agreements and has a global perspective.
To the best of my knowledge, this debate is one of a kind. It is the only substantive discussion on next month’s meeting of the framework convention on tobacco control, COP10, taking place in any parliamentary democracy. It is my hope that we can shine a light on the World Health Organisation’s sometimes less than ideal proceedings.
I thank my hon. Friend the Member for Harrow East (Bob Blackman) for having secured the debate in this place on the WHO framework convention on tobacco control in March 2020. We all share a dislike, to put it mildly, of smoking. I pay tribute to the work that he and his colleagues do on the all-party parliamentary group on smoking and health to drive smoking cessation. Who in Parliament does not hate smoking? I do, and where we have differences, they are only on how best to drive it out. Since that debate nearly four years ago, we had one subsequent conference of the parties to the WHO: FCTC COP9, which took place in Geneva in November ’21. Today, of course, we are discussing COP10, which will be held in Panama in just over a fortnight.
We all know the term “COP”; it has become something of a household name, thanks to the United Nations climate change conference, which concluded its COP28 meeting in the United Arab Emirates last year, and which is heralded as a beacon of openness, transparency and engagement. The UK hosted COP26 in Glasgow in November 2021, which was expertly presided over by my right hon. Friend the Member for Reading West (Sir Alok Sharma). Ministers from Governments from all over the world attend these meetings. Indeed, our own Minister for Energy Security and Net Zero, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), was so enthusiastic about COP28 that he went to it twice. The conference sessions are open to the media, to civil society and to other interested stakeholders to participate in.
What a contrast that is with the FCTC and COP10. Despite smoking being one of the leading causes of death in the UK, killing about 80,000 people every year and causing one in four cancer deaths, there is likely to be no ministerial representation from the Government in Panama. It is unfortunate that such an important area of health policy is left to officials. Unlike the climate change COP, the FCTC COP meets and takes decisions behind closed doors, away from the scrutiny of Parliament and the press. The decisions taken in Panama next month will have wide-ranging influence over the UK Government’s approach to smoking cessation and the regulation of tobacco harm reduction products, which many smokers use to quit combustible tobacco.
For nearly a year, I have been asking the Department of Health and Social Care who will be in the UK’s delegation to COP10 in Panama. I have been asking what positions that delegation will take, and whether we will continue to stand up for Britain’s world-leading and evidence-based approach to tobacco control and smoking cessation. I know that a great many Members from across the House have made similar representations to the DHSC. Despite repeated oral and written parliamentary questions on the subject, Ministers have not yet set out the UK Government’s approach to COP10 in any detail. Clearly, none of us wants our Government to be as opaque as the World Health Organisation is on this and many other issues.
My first request of the Minister is that she asks my right hon. Friend the Minister for Energy Security and Net Zero to give serious consideration to attending COP10 in Panama next month. Members may ask why that is so important. The UK is one of the largest financial contributors to the FCTC, with millions of pounds of taxpayers’ money being shipped off to the WHO in recent years to support this agenda. That is whole streets-worth of residents of my constituency’s total contribution to the Exchequer. Every penny of tax that street after street of them pay goes to funding the WHO. We have an obligation to our constituents to ensure that the money is well spent, so we need to know who will be standing up in Panama on their behalf, and what policy positions will be supported or opposed.
What we do know is that the WHO takes a highly sceptical view of tobacco harm reduction products, including vapes, heated tobacco and oral nicotine pouches, arguing that they pose a risk to health. As I have mentioned, that is in direct contrast to the UK’s world-leading approach to tobacco control. It really is world leading, and we should be proud of what we have accomplished in recent years in driving down smoking rates and saving lives. Public Health England, which is now the Office for Health Improvement and Disparities, has been clear that vaping is at least 95% less harmful than smoking, and that heated tobacco products are considerably less harmful than conventional combusted tobacco cigarettes. That is independent, peer-reviewed evidence from a glittering array of public health experts, clinicians and scientists, not funded by players in the tobacco industry. Not only has it formed the bedrock of the UK Government’s approach to smoking cessation in recent years, but our model has been heralded by public health experts in countries and universities across the world as a beacon to follow. I therefore pay tribute to the Minister’s predecessor, my hon. Friend the Member for Harborough (Neil O'Brien), for the groundbreaking “swap to stop” scheme, which he announced early last year. For many of my constituents, vaping is a vital alternative that helps them to curb their smoking habits and quit, and the “swap to stop” scheme, which offers free vape starter kits to smokers, is a welcome tool in the arsenal.
When the Minister unveils her legislation later this year, we will have the opportunity to debate some of the fundamentals, including ensuring that children do not access nicotine products, and giving trading standards the enforcement powers that they need to tackle rogue traders who sell to minors or sell illegal products. However, we must not throw the baby out with the bathwater by introducing draconian measures that discourage adult smokers, whether deliberately or not, from making the switch to vaping. That is a fundamental point. Over-regulation and blanket bans are not the safe option; they could cost lives.
I agree with the Minister’s remarks in the debate last week that we must clamp down on packaging with cartoon characters, and vapes shaped like toys, but I discourage the misconception that flavoured vapes are not designed for 60-year-old smokers. There is very clear research on this: in a 2003 opinion poll by OnePoll, 83% of smokers stated that flavours helped them to quit smoking, and there is a definitive and widely available study on this matter by the University of Pennsylvania. Constituents tell me that it is precisely the availability of a wide range of non-tobacco flavours that enables them to make the switch away from harmful cigarettes. I oppose the suggestion from the hon. Member for Walthamstow (Stella Creasy) that adults are not interested in fruit-flavoured vapes. Why should adult smokers be discouraged from switching away from smoking, which will cost them their life, by a vaping market that is reduced to tobacco-only flavours that constantly remind them of smoking, and trigger their desire to smoke a cigarette?
There is also a danger that over-regulation will exacerbate the black market. In fact, as colleagues pointed out in the Westminster Hall debate on illegal vapes on Tuesday, the black market has flourished in recent years. Between 2020 and 2023, more than 2.5 million illicit vapes were seized by trading standards across 125 local authorities, and the enforcement agency warns that that is just the tip of the iceberg. Do we want to grow that iceberg, or reduce it as much as possible?
There is a tendency for us politicians to pass legislation or produce guidance from Whitehall so that we can say that we are taking robust action on an issue, without having regard to how it might be implemented. The UK already has stringent restrictions in place via the Tobacco Advertising and Promotion Act 2002, so much of the issue is really about enforcing the many existing laws, rather than a need for new ones. Speaking as a long-standing local government man—and I am still vice president of the Local Government Association—underpinning this issue is the new burdens doctrine, which this Government have signed up to and adhered to for many years. That doctrine states that all new burdens on local authorities must be fully assessed and funded. It is a cornerstone of Whitehall Departments’ preparatory work before they pass responsibilities on to local authorities, and I urge the Minister and her officials to keep that broader point in mind for discussions at the conference.
The real risk is that at COP10, the WHO will, as is expected, call for regulatory equivalence for tobacco harm reduction products, so that they are treated in exactly the same way as combustible tobacco products. That is not only counter to the UK Government’s position; if successful, it will significantly harm public health goals, not just in this country but across the world. Some countries have already banned vapes but not cigarettes, and that will cost huge numbers of their citizens’ lives.
Additionally, why bother to “swap to stop” at all if cigarettes and vapes are taxed in the same way and there is no price differential or flavour incentive to quit? That said, I am conscious that the Minister is still compiling her response to the recent consultation on smoking and vaping ahead of new legislation, which we await with interest.
There is one occasionally repeated fallacy that must be nailed and not repeated, given its harmful potential. It is not nicotine that causes lung cancer, and nor does nicotine itself kill its long-term users; rather, it is the constituent chemicals inherent in the combustion of tobacco within cigarettes that causes harm. Nicotine vapes, oral nicotine pouches, and indeed heated tobacco products—which are sometimes known as “heat not burn”, given that there is no combustion involved—are all essential in giving adult smokers a range of solutions for their smoking cessation journey. For the avoidance of doubt, I quote Cancer Research UK, which says that nicotine
“is not responsible for the harmful effects of smoking, and nicotine does not cause cancer.”
Tackling misinformation is at the heart of this debate, as we consider some of the measures that the WHO is proposing to enact at next month’s COP10 meeting, and the harmful effects they will have on public policy here at home.
As ever, the devil is in the detail, so I ask colleagues to forgive me if I take a few minutes to speak to some of the specific policies under consideration in Panama, and why the UK delegation must stand firm against them. The words of the Chief Medical Officer for England are ringing in my ears:
“If you smoke, vaping is much safer; if you don’t smoke, don’t vape”.
We need to consider how our public health bodies can effectively communicate that to adults who currently smoke.
One of the most worrisome proposals being put forward by the WHO is item 6.2 on the agenda, which covers tobacco advertising, promotion and sponsorship. It is widely understood that the WHO will push for an expansion of article 13 of the FCTC to include reduced-risk products—vapes, “heat not burn”, and oral nicotine pouches —within the restrictions on advertising, as if they were the same as combustible tobacco, when, as I hope I have already illustrated, they are not.
Like everyone else in this room—I cannot stress the importance of this enough—we have to ensure that children are not targeted by nicotine products, but successful uptake by adult smokers of these reduced-risk products as part of the UK Government’s strategy of tobacco harm reduction relies on the ability of responsible manufacturers and retailers to provide important and accurate information about the products’ health benefits when set against traditional combustible cigarettes. There are still 6.4 million smokers in the UK, and they are our constituents, our neighbours, our families, and—I am very sorry to say—for many of us, our friends.
Misinformation on this issue is not only dangerous; it is lethal. The best must not be the enemy of the good. The extent of misinformation is such that, according to Action on Smoking and Health, four in 10 smokers believe that vaping is as harmful or more harmful than smoking. That figure increased by a third last year. A recent YouGov poll also found that over 50% of people thought that vaping was more harmful or as harmful as smoking. Whenever there is an online newspaper article about this subject, to which I have obviously been paying particular attention in the last week or so, I am amazed by the extreme, contradictory and occasionally potentially dangerous views expressed.
The proposals under discussion at COP10 would limit the ability to tackle misinformation on relative harms, while simultaneously restricting the promotion of reduced-risk products to adult smokers. As I alluded to earlier, the UK delegation must challenge any attempt to bring about regulatory equivalence between combustible tobacco and reduced-risk products—in particular “heat not burn” products, which the Office for Health Improvement and Disparities has made clear are substantially less harmful than smoking.
There is a risk through item 6.3 on COP10’s agenda that the WHO will seek to do just that: to push Governments around the world to regulate vapes and other reduced-risk products in the same way as combustible cigarettes, leading to the concern that that could extend to proposals on taxation and price points. If the WHO is successful, any financial incentive to switch away from cigarettes will be removed. That point has been made by many colleagues on many occasions, and I know from our work together on the APPG for vaping that the hon. Member for North Tyneside (Mary Glindon)—my colleague and co-author of an article on the issue—has spoken passionately about it and her own personal experiences. Such measures would send the wrong message, and would only perpetuate the dangerous myth, believed by 40% of smokers, that vaping is as harmful as smoking, and would therefore obviously discourage them from switching in the first place.
Will the Minister undertake to confirm that the UK delegation will block any measures to restrict the ability to effectively communicate with adult smokers on the health benefits of switching away from combustible cigarettes? Will the UK delegation oppose any move towards regulatory equivalence, including on taxation and price points?
I am conscious that other colleagues wish to speak. Thank you, Mr Vickers, for indulging me in setting the scene more generally and outlining some of the concerns as the Government head into COP10.
Sir Christopher Chope (Christchurch) (Con)
My hon. Friend is making a brilliant speech, and I am grateful to him. Can he explain why we would be required to follow any recommendations that come out of COP10? As a sovereign country, surely we would be able to decide whether we wished to accept the recommendations.
Andrew Lewer
I will develop my hon. Friend’s point in my closing remark.
If the UK delegation attends COP10 and goes along with international agreements, even if they are not legally binding, there will be a mood music and atmosphere, as we have heard in recent days, that because we are a signatory and have agreed to go along with them, we therefore need to follow along. My hon. Friend the Member for Christchurch (Sir Christopher Chope), possibly more than anyone else, has been robust about the limitations of international bodies with respect to this Parliament and this country. However, as we discovered this week, their prevailing influence is great, and not standing up to proposals at such events therefore leads inexorably to their proposals being absorbed into British policy and lawmaking.
It would be hugely beneficial if the Minister attended COP10 in Panama and flew the flag for our world-leading public health strategies for smoking cessation. She is someone who passionately championed, when she stood astride that Wembley stage back in 2016, Britain’s great future as an independent, free-trading and outward-looking nation, having taken back control of our laws, borders and money. I do not believe for one moment that she wishes to see responsibility for our public health policy abrogated to another supernatural—sorry, supernational: a Freudian moment there—unelected body of bureaucrats. To assist in setting out the UK position, perhaps my hon. Friend the Member for Winchester (Steve Brine), in his capacity as Chair of the Health and Social Care Committee, might have the UK delegation appear before him and his colleagues to answer questions before COP10 gets away on 5 February, as well as afterwards.
Our constituents, many of whom have written to us about this in recent days, have the right to know what the UK delegation will or will not be doing on their behalf, let alone who is in it. I am sure that I speak for many Members when I say that we would welcome clarity on that point. I am grateful to the Minister for coming to respond to the debate. I am sure that she will use the opportunity to provide us with some of the answers we seek, and will undertake to keep the House and colleagues fully informed. I hope she will make a statement from the Dispatch Box at her earliest convenience after the conclusion of COP10 to update us on the outcomes from Panama.
I look forward to the contributions of colleagues from all parts of the House, and to the response from the shadow Minister, the SNP, and the Minister, who I know shares my passion for ensuring that our Parliament retains its status as the sovereign decision-making body.
Mr Virendra Sharma (Ealing, Southall) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. I am grateful to the Backbench Business Committee for granting this debate on international tobacco control, and to the hon. Member for Northampton South (Andrew Lewer) for securing it.
In a mere few years, in this country at least, we have paved the way for our children and grandchildren to live healthier, fitter and longer lives. As a result of the hard work of doctors, nurses, charities, researchers and activists, we are on the edge of creating a future free from the shackles of smoking. Around the world, this pattern is being repeated, and along with many, I welcome global co-operation on ending smoking. The World Health Organisation’s framework convention on tobacco control will be discussed at the 10th conference of the parties, COP10, between 5 and 10 February in Panama. That is a great step towards our goal.
COP10 will present amazing opportunities, but also grave challenges. In the UK, we are clear that there is no silver bullet in the fight against smoking. Any strategy must accommodate an integrated approach—an approach that understands that targeted social support works with Government regulation, and that combines powerful new tools to help smokers quit with measures to prevent our young people from ever beginning this terrible habit.
Stopping people smoking is not cheap. After years of calls for a smoke-free future, only 67% of local authorities have enough funding to provide targeted specialist services. The evidence shows that without such services, people have low motivation to quit, and are more likely to relapse if they try to. That means that deprived areas, in which we should be most active with our efforts, are being left behind in the fight against smoking. It is no surprise that when we reduce funding for targeted social support, the siren call proves stronger than our critical messaging. We cannot afford to wait and treat only the symptoms; we have to treat the cause.
As things stand, we will miss our own targets. Without further action to encourage people to never start smoking in the first place, Britain will miss its Smokefree 2030 targets by seven years, with the poorest areas missing the target by at least 14. Modelling is clear, and is a lesson for countries around the world: the poorest areas will be the first to miss out. My concern is that the WHO and the FCTC are getting this wrong; they are putting the cart before the horse, and pretending that “abstinence only” works.
There is a strong link between illegal sales and under-age smoking, so tackling the problem at its source is by far the best approach. In the UK, we have missed opportunities to do that. I see it in my own constituency; illegal and counterfeit tobacco products are under-policed. Communities need a strengthened trading standards, able to impose the fines that His Majesty’s Revenue and Customs can. That was a missed opportunity in the middle of last year. Trading standards can only pass evidence to HMRC. The lack of action provides a safe harbour for criminal gangs and organised crime to generate cash.
In every country, we also need to tackle the alarming growth in vaping among children. Undoubtedly, the introduction of vaping products has dramatically improved people’s chances of quitting smoking, but the appeal of these products to children is concerning. We need action to ban children-centred advertising, branding and flavours, alongside strict legal penalties for those who sell to children.
Vaping works for many, and COP10 should not seek to make it harder for smokers to move into vaping. Any vaping rather than smoking is less harmful. Abstinence alone does not work. Not everyone who takes up vaping will give up smoking, and ASH estimates that 35% of vapers still smoke alongside vaping, so we need a solution to move those unsated by vaping.
Heat-not-burn products heat tobacco rather than burn it and are therefore a less harmful alternative to cigarettes. They mimic the experience of smoking much more closely than vapes, making the transition away from cigarettes easier for adult smokers. However, studies show that they are less attractive than vapes to younger people who have never smoked.
I want the UK to stand up at COP10 for a harm reduction approach that encourages every small step to help people move away from smoking, reducing prevalence at every level. It is in our diverse communities, such as my constituency, that the reduction has slowed the most, and the messaging and tools available are not working. When I was a councillor in the London Borough of Ealing, I chaired the scrutiny committee on ceasing smoking and bringing in related resources through the NHS and other services. That was in 2003 and 2004, and we are still talking about how the situation should be improved.
In Panama, I want to hear the Minister using their power and the UK’s authority to stand up for solutions that work. I want the Government to stand by these arguments. NHS policy papers, the Khan review and ASH show that allowing people to make smaller changes leads to longer-term change. If we use our position as one of the FCTC’s largest financial contributors, our voice should be heard. I urge the Government to lead, and the Minister for Primary Care and Public Health to join COP10 as part of our delegation.
Yes, we have made great steps towards our shared goals, but we risk it all as we approach the final hurdles. Now is not the time to diminish our resolve in the fight against smoking. To meet our bold commitments, we must use every weapon in our arsenal. Every less harmful product should be on the table. We must improve funding for specialist services, recognise the harm the industry does to our communities and tackle the illegal tobacco trade. We want COP10 to work, but it needs leadership based on evidence-led policy. Abstinence on its own does not work. A strategy is needed that can dispel smoking’s dark cloud, leaving a brighter, cleaner and healthier future for our children.
Mr David Jones (Clwyd West) (Con)
May I say what a pleasure it is to serve under your chairmanship, Mr Vickers? I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) and the hon. Members for Ealing, Southall (Mr Sharma) and for Linlithgow and East Falkirk (Martyn Day) for securing the debate, and I thank the Backbench Business Committee for facilitating it. At the outset, I declare an interest as an honorary life governor of Cancer Research UK.
I agree entirely with my hon. Friend the Member for Northampton South that the stance the UK adopts at COP10 next month will be crucial to the future of tobacco harm reduction in this country. To their great credit, the Government have pursued a distinctive and very successful UK-made policy on smoking that has significantly reduced its prevalence in this country. Nevertheless, as we heard from my hon. Friend, 6.4 million people still smoke—around 12.9% of the UK’s adult population.
To help reduce smoking rates, the UK is taking a world-leading approach, supporting the principle of tobacco harm reduction. In particular, the UK takes the view that vapes can have an important role in reducing the prevalence of cigarette smoking. The Government have allowed vaping to develop on a market basis, and that has gradually taken 1.5 million people off smoking altogether.
As we have heard, the smoke produced by combustible tobacco represents the greatest threat to the health of smokers. The UK has therefore been keen to point smokers to alternatives to combustible cigarettes. As we heard from my hon. Friend, in April the Department of Health and Social Care announced that a pioneering “swap to stop” strategy would be rolled out across England, providing a million smokers with a vape starter kit, alongside behavioural support to help them quit. That approach has a history of success. The largest such programme to date was conducted in Salford in 2018, and it resulted in over 60% of participants being smoke-free after just four weeks.
While no one route can be said to be the only one to help smokers to quit, the fact is that, for many, vaping does work. I repeat the quote my hon. Friend mentioned from the chief medical officer for England, who said:
“If you smoke, vaping is much safer”.
However, he went on to say:
“if you don’t smoke, don’t vape.”
The 2022 Khan review made it clear that the Government should
“embrace the promotion of vaping as an effective tool to help people to quit smoking tobacco.”
However, one solution does not suit all smokers. It is important that the Government, and indeed the devolved Administrations, which have responsibility for healthcare in their areas, keep as many options open as possible to have the highest chance of success in reaching smoke-free status by 2030. That is the Government’s highly commendable ambition, and it must not be thwarted by the likely stance of the World Health Organisation in Panama.
The WHO opposes reduced-risk products, including vapes, heated tobacco and oral nicotine pouches, arguing that there is insufficient data to understand their effects. The WHO, to be entirely blunt, is being stubbornly backward. It does not accept any harm-reduction approach to smoking. It does not accept that smokers switching to vapes is a better choice. It does not accept British scientific consensus—for example, the Public Health England report stating:
“While vaping may not be 100% safe, most of the chemicals causing smoking-related disease are absent and the chemicals that are present pose limited danger”
and that
“best estimates show e-cigarettes are 95% less harmful to your health than normal cigarettes”.
The WHO’s stance, therefore, runs counter to the UK Government’s successful, evidence-based approach to tobacco harm reduction through the use of reduced-risk products to help to cut smoking rates. We must remember that the United Kingdom is one of the largest financial contributors to the FCTC, and the Government should not be afraid to remind the WHO of that. British taxpayers have in recent years provided millions of pounds to support WHO policies that are contrary to those operated by the United Kingdom.
The WHO’s approach is that nicotine products pose a risk to health and that the safest approach is not to use them at all. Well, of course—that is self-evidently the case. Non-smokers should never start using nicotine, but it is counterproductive to prevent adult smokers from accessing reduced-risk products in a world in which 1.1 billion people still smoke. That makes no sense at all.
As my hon. Friend the Member for Northampton South said, some of the proposals in the provisional agenda for COP10, published on its website, are a serious cause for concern. For example, item 6.2 aims to impose the same restrictions on the advertisement, promotion and sponsorship of reduced-risk products as on conventional tobacco products. That would limit the ability of the UK Government, the devolved Administrations and public health bodies to promote to adult smokers less harmful alternatives as part of a smoking cessation strategy. It should be noted that, in contrast, Sweden is set to become the world’s first smoke-free country, after seeing substantial reductions in smoking rates through the use of a wide range of reduced-risk products.
Item 6.3 on the agenda threatens to establish regulatory equivalence between combustible tobacco and reduced-risk products. That sends a dangerous, misinformed message that reduced-risk products are as harmful as, or more harmful than, combustible cigarettes.
Sir Christopher Chope
Is that not exactly what has happened in China? China is regulating vapes in the same way as tobacco, and we know that the WHO is controlled by Chinese interests. Should that not make us really alarmed?
Mr Jones
Yes, it certainly should, and it is another reason why the United Kingdom, which has significant influence within the WHO, should actually exert that influence, and I propose to discuss that a little later in this speech.
Misinformation about vaping is already an important and worrying issue. According to Action on Smoking and Health, four in 10 smokers in the UK now believe that vaping is as risky as, or riskier than, smoking. That is the consequence of the misinformation, and the WHO’s position simply compounds the misinformation.
In the teeth of this hostility on the part of the WHO, the Government should confirm what policy positions the UK delegation to COP10 will take, especially on the agenda items that I just mentioned. I hope my right hon. Friend the Minister, in her winding-up speech, will be able to assure us that the Government will challenge the WHO on the science head-on. Will she say, as my hon. Friend the Member for Northampton South has asked, whether a Minister will attend COP? I believe that a Minister should be there—I think she should take a slow boat to Panama. We need ministerial involvement at this conference. Will my right hon. Friend also say what policy positions she will be instructing officials to take, and will she undertake to provide a further statement to the House on the key outcomes—particularly where there may be an impact on health policy and smoking cessation strategies—after the closure of the conference? Critically, will she confirm that the UK delegation will oppose, and if necessary veto, any proposals that would impact on the UK’s world-leading and evidence-based approach to tobacco control through the successful use of reduced-risk products?
I repeat that we are a major funder of this organisation. If we are to meet our goal of being smoke-free by 2030, the Government, working with devolved Administrations, must ensure that adult smokers are provided with a wide range of reduced-risk products to help them to quit, such as vapes, including single-use vapes; heat-not-burn and heated tobacco products; and oral nicotine pouches. Different solutions will work better for different people. Japan, with heated tobacco, and Sweden, with snus, the organic form of nicotine pouches, have had even more success in reducing smoking than the UK, so vapes should not be the only solution. Indeed, these products have been even more successful in their home markets than vapes have been here. We should be learning from other countries’ experiences.
At this COP, there will be an attempt on the part of the WHO to create a global norm of treating harm reduction products, including vapes and heated tobacco, exactly like combustible cigarettes, as if they were equally dangerous, including by raising their excise duties to the same level. That would be a colossal disincentive to any smoker who might consider switching to a less dangerous choice. I hope my right hon. Friend the Minister can confirm that the UK will stand against what would be a reactionary and profoundly dangerous error.
The WHO should not be allowed to undermine the UK’s evidence-based and science-led approach to tobacco harm reduction. The UK’s successful use of vapes to reduce smoking rates is rightly seen as a model of success around the world. The UK delegation at COP10 must do all it can to oppose measures that may threaten that.
Sir Christopher Chope (Christchurch) (Con)
It is a pleasure to serve under your chairmanship, Mr Vickers. I had not expected to speak in this debate, but I think it is worth re-emphasising the point that the WHO is controlled by China in very dubious circumstances. The chairman and director general of the WHO were appointed under Chinese influence. We have debated several times in Westminster Hall the influence of China when it comes to other areas of activity with the World Health Organisation. Here we have a specific example of how Chinese leadership is trying to persuade this WHO body to introduce the same policies and regulations that it has already introduced in China.
We should be the world leaders in this. We should be out there explaining why tobacco harm reduction products are really well suited to the consumer and the battle against the harms caused by smoking, but we do not seem to be in a leadership role. I urge my right hon. Friend the Minister to show that leadership by leading the UK delegation in Panama. Otherwise it will seem as though we are diffident. There is even a danger that what we believe in this country and the pioneering work that has been done, to which reference has already been made, will count for nothing when it comes to the debates in Panama.
We know the extent of Chinese influence across the world. The next stage may well be that what is advisory for this WHO body will become mandatory. That is the Chinese agenda. They are trying to take over the these international bodies and get their way. What should we be doing? We should be fighting back robustly. We should not be naive about this. I fear that we are far too diffident.
I am disappointed that despite the number of constituents who have written to me and on whose behalf I have written to the Government, we have still not had clear answers about exactly what our position will be when the discussion takes place in February. My right hon. Friend the Minister has always been a champion of national sovereignty, but I urge her to demonstrate that by leading the way and telling the Whips that we can manage without her for a few days, while she raises the flag in Panama on behalf of the United Kingdom and all we are doing to improve our public health and reduce the harm that comes from smoking.
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Vickers. I am grateful to my cross-party colleagues, the hon. Members for Northampton South (Andrew Lewer) and for Ealing, Southall (Mr Sharma), for securing this debate. I should put it on the record that although I was an initial sponsor of the debate, I removed my name in order to sum up for the SNP. I agree with a lot of the points that my colleagues made; I take a different view on some of them, but one thing we are united in is our desire to know what the Government’s position will be at COP10.
Health is a devolved matter to the Scottish Parliament. Smoking is a significant public health issue in Scotland and a leading cause of preventable ill health, premature death and disability. However, international treaties, including those with World Health Organisation involvement, are reserved issues determined by this Parliament. Personally, I wish that it were otherwise and that Scotland could determine all matters for itself, but until then we need Ministers here to tell us what they are doing on our behalf.
Today’s debate is very timely, because the 10th session of the conference of the parties to the World Health Organisation framework convention on tobacco control, COP10, will take place from 5 to 10 February in Panama, having been postponed from November. I look forward to hearing the view that UK Ministers will be taking on our behalf when those decisions take place.
The framework convention on tobacco control is the first treaty negotiated under the auspices of the World Health Organisation. It came into force on 27 February 2005 and was one of the quickest-ratified treaties in UN history. It was developed in response to the globalisation of the tobacco epidemic. It is a supranational agreement that seeks to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke by enacting a set of universal standards stating the dangers of tobacco and limiting its use in all forms worldwide. I support those aims. The treaty’s provisions include rules that govern the production, sale, distribution, advertisement and taxation of tobacco. Importantly, FCTC standards are minimum requirements; signatories are encouraged to be even more stringent in their regulation of tobacco than the treaty requires.
Evidence suggests that the FCTC has been very effective where it has been implemented. It is significantly associated with lower smoking prevalence and consequently with an anticipated future reduction in tobacco-related mortality. Smoking declined much faster among children and adults after the UK became a party to the FCTC in 2005. It is worth pointing out that that was some time before e-cigarettes, which are the subject of a major debate in this country, took off. We should therefore endeavour to build on those standards and go further in tackling tobacco and smoking abuse.
Different countries take different approaches. Under the Australian model, e-cigarettes are available only on prescription. We need to take appropriate action to address our own smoking cessation objectives. The Scottish Government have ambitious targets to reduce smoking rates to less than 5% of the adult population by 2034, with the aim of creating a generation of young people who do not want to smoke, with all the health and economic benefits that follow. I cannot pretend to be a young person, and I have never smoked and never understood the desire to do so, but I have many friends who did so and went through great difficulties in stopping. Some have managed to stop, some have relapsed and some have used e-cigarettes to assist them.
Scotland was the first UK nation to commit to consulting on a proposed ban on single-use vapes and other measures. I am pleased to see the consensus that has formed on the need for prompt action, and I welcome the publication of the four nations consultation on smoking and vaping, which aligns with the Scottish National party-led Scottish Government’s goals for smoking cessation and tackling the environmental impact of single-use vapes. Scotland was littered last year by at least 2.7 million single-use vapes. We know that about half a million of our population were using vapes, some of them correctly. Worryingly, though, 22% of our under-18s had tried vaping, so there is a real danger of it being a gateway drug. I am concerned about that. Vaping remains one possible smoking cessation method, but it must not be a lifestyle accessory, and vapes should not be used by children, our young people or non-smokers.
I would be grateful for confirmation from the Minister that the UK delegation to COP10 will not agree to any measures that would restrict Scotland’s options to deliver its tobacco action plan or the recently published tobacco and vaping framework. I end with a question to the Minister: what discussions have taken place with colleagues in the devolved nations in advance of COP10?
Karin Smyth (Bristol South) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Vickers. I understand that this is the third debate this week about tobacco and vaping, so the subject is getting a good airing. I confess that I was not expecting to have a debate about sovereignty and taking back control this Thursday when talking about smoking, but one always has to be prepared to be taken back, as the Minister says. Like colleagues, I thank the hon. Member for Northampton South (Andrew Lewer) for securing this debate, and I thank the right hon. Member for Clwyd West (Mr Jones), my hon. Friend the Member for Ealing, Southall (Mr Sharma) and the hon. Member for Christchurch (Sir Christopher Chope) for their contributions and the work they do in this area.
As we have heard, the convention on tobacco control was adopted in 2003 and came into force in 2005. It has since become one of the most rapidly and widely embraced treaties in UN history. It was developed in response to the globalisation of the tobacco epidemic, and a quick glance at the statistics tells us why. Tobacco kills up to half its long-term users. It is responsible globally for an estimated 8 million deaths per year, 1.2 million of which are of non-smokers exposed to second-hand smoke, yet the global market is still worth more than £800 billion a year. Tobacco remains the largest cause of health inequalities, accounting for as much as half the difference in amenable mortality between the most and least deprived communities in the country.
My hon. Friend the Member for Ealing, Southall highlighted the work that he has done, particularly on reducing smoking among minority and ethnic communities. In my constituency, the tobacco industry has historically employed many thousands of people and there is a long legacy of tobacco, which can be seen in the higher rates of chronic obstructive pulmonary disease and other smoking-related conditions in Bristol South. Tobacco costs the taxpayer tens of billions every year, putting increased pressure on the NHS and care system, as well as contributing to the productivity crisis through lost earnings, unemployment and, sadly, early deaths.
That is why the Labour party is committed to building a smoke-free future. It is why we have said that we will support the Government’s measures to raise the legal smoking age by a year every year, so that a 14-year-old today will never legally be able to buy a pack of cigarettes. It is also why we would make sure that all hospital trusts integrate opt-out smoking interventions into routine care, so that every interaction with the NHS encourages quitting. Unlike the hon. Member for Linlithgow and East Falkirk (Martyn Day), I am a former smoker who did have to quit. I pay tribute to the people who do it: it is a very hard thing to do.
This is a global issue, which is why we have to tackle it globally. We have seen the tactics of the tobacco industry over many years. Hugely profitable multinational companies will use their muscle in individual states—we have seen in Uruguay, Vietnam and elsewhere how they will behave —so working together seems to be the way forward. The establishment of the WHO framework two decades ago is an important milestone in tackling a public health hazard. It encourages parties to implement common-sense policies that have strong public support, such as protecting public health policies from commercial and vested interests; protecting people from secondary smoke; and bans on advertising and on so on. Those have been developed over many decades.
As we have heard, the next conference of the parties will be the 10th since the convention entered into force and will take place in Panama. Agenda items up for discussion will be articles 9 and 10 of the convention, on the regulation of the contents and disclosure of tobacco products, which is addressed by the UK’s Tobacco and Related Products Regulations 2016. We all seem very keen to send the Minister to Panama—the right hon. Member for Clwyd West suggested a boat, which would take her some length of time—so we are all interested in whether she is going, and, more specifically, how she will be instructing the UK delegation to approach these really important discussions.
Does the Minister have any plans to bring other nicotine products, such as nicotine pouches, into the regulatory process as part of the Government's forthcoming legislation? Many colleagues will have received letters from constituents about e-cigarettes and vaping, which will be discussed at COP10. We hear what they are saying. E-cigarettes are an important tool for stopping smoking. Evidence indicates that they are less harmful than cigarettes, and that their use shows a positive association with quitting smoking, as we have heard so eloquently from colleagues today—something we would support. Particularly in this month, January, many smokers are grappling with their new year's resolutions, and we fully support them in that journey however we can. We must acknowledge, however, that vaping is not risk free, particularly for people who have never smoked, and that there is a lack of evidence on the long-term health impacts.
As we have said many times in this House, we are particularly concerned about the rise in youth vaping. In just the past two years, the number of children aged 11 to 17 who vape regularly has more than trebled. Over 140,000 more children have taken up vaping since the Government voted down Labour’s proposed measures in 2021 to crack down on companies that brand and advertise vapes to appeal to kids. We want tougher regulation of those products and for a strong message to be sent to those companies trying to make a profit at the expense of our children’s health. I hope that Ministers, via their role in the WHO, will push harder for stronger and clearer messages, based on the latest data and evidence, and seek to regulate this market in a way that promotes quality and safety and, crucially, that protects young people.
Will the Minister use the forthcoming tobacco and vapes Bill to close loopholes that allow nicotine-free vapes to be sold to under-18s, and free samples of even addictive nicotine products to be given to children? Is she considering strengthening the powers of the regulator, the Medicines and Healthcare products Regulatory Agency, to deal with the number of illegal vaping products circulating on the UK market today? She is welcome to our policy—will she back our proposal to ban companies from branding and advertising vaping products in a way that is appealing to children?
Just as the last Labour Government led the way on tobacco control, so will the next, with a road map to a smoke-free Britain. We want to make sure that hospital trusts integrate opt-out smoking cessation interventions into routine care, making every clinical consultation count. We will legislate to require tobacco companies to include information in tobacco products that dispels the myth that smoking reduces stress and anxiety, and tackle the rapid rise in youth vaping, on which the Government have failed to act so far. To tackle health inequalities and rescue the NHS from 14 years of decline, we need bold measures to tackle smoking and improve public health.
Mr David Jones
Could the hon. Lady say what measures she proposes to put in place to tackle the issue of youth vaping?
Karin Smyth
I am sure the right hon. Gentleman took great notice of the Labour party conference, where we announced a ban on targeting, and advertising and marketing to, young people. We think that where there is a will, there is a way. The ban on smoking, which I remember very well from when I was part of an NHS trust, was an incredibly difficult thing to do and enforce. But when the Government make clear that the targeting of young people is completely unacceptable, the market will react. We want to work with companies to make sure that happens. That is our plan for doing that and for getting the NHS back on its feet and making it fit for the future.
The Parliamentary Under-Secretary of State for Health and Social Care (Dame Andrea Leadsom)
It is a real pleasure to serve under your chairmanship today, Mr Vickers. I thank all colleagues who have taken part in this Backbench debate, especially my hon. Friend the Member for Northampton South (Andrew Lewer) for his leadership in organising it. It has been very interesting, and I can absolutely assure colleagues that I have learned some new things myself today.
To tackle the very first question, I do not intend to go to Panama for COP10. That is because I am preparing flat out for our smoke-free generation Bill, including the response to the consultation and the measures. I just do not think it would be a good use of my time to travel on 5 February. However, the Government will be represented by our excellent colleague from the civil service, Dr Jeanelle de Gruchy, who has done fantastic work representing the UK’s position.
I will give a rough overview of the UK’s position. There will be discussion about global progress on tobacco control. Of course, the UK is an outlier on the topic of vapes, and we will be putting forward our position that vapes are a very important tool for helping adults to quit. There will be some discussion on advertising and sponsorship. The UK has no plans to implement further restrictions on advertising and sponsorship, particularly in the COP’s desire to see further restrictions implemented. On novel and emerging tobacco products, different parties take different approaches. At the moment, the UK is still looking at issues around heated tobacco, so the UK delegation will be in listening mode. In terms of parties going further on tobacco control, certainly the UK Government would welcome other parties going further to protect people, but we will be monitoring the negotiations to ensure that nothing becomes mandatory. Finally, there will be discussions on whether there should be an increase in assessed contributions. The UK intends to press for contributions to stay where they are now. I am very happy to provide a statement to the House after COP10, giving feedback on exactly what happened. I think that covers a lot of the issues raised by colleagues. I hope that was clear, and I would like to again thank everyone for attending.
As has been pointed out, the framework convention on tobacco control was the first treaty negotiated through the World Health Organisation. However, as colleagues will appreciate, I am not one to get misty-eyed about international conventions, or indeed international regulatory frameworks. I am not terribly romantically attached to this, and I feel that the UK’s sovereignty is actually the most important aspect. My priority as the Minister will be to help us in the UK protect our citizens from harm. Is there not a song that goes, “I did it my way”? The UK has a world-leading approach to reducing harms from tobacco and nicotine, and we will continue to do that.
The conference of the parties has, however, been a helpful way of keeping strong tobacco controls at the top of the global health agenda. It is also, as I hope I have just illustrated, a very useful forum for sharing best practice. All papers are presented and all decisions made are published online via the dedicated COP10 website. The UK remains committed to the convention, because we are a world leader in tobacco control. Like many friends around the world, we want to see a tobacco- free future. Next month’s conference will be a fantastic opportunity for us to showcase the UK’s strength, being at the cutting edge of a smoke-free generation. As I have said, our deputy chief medical officer, Dr Jeanelle de Gruchy, is the chief delegate. I have every confidence that our team will encourage other countries to follow in our example.
Now, my hon. Friend the Member for Northampton South is a big fan of common sense, and so am I. I want to reassure everybody that our delegation will be bound by common sense, and not by conference decisions that run contrary to common sense, or indeed to decisions that run counter to our national interest. That includes the decisions we take in helping smokers to quit through quit aids such as vapes and nicotine replacement products. We are a sovereign nation, and it is not within the WHO’s remit to intervene in our internal affairs.
Last week, I was given a couple of opportunities to update the House on our progress towards a smoke-free generation. With permission, I would like to reiterate a few of the points I made then. Our new tobacco and vapes Bill will save lives. Unlike other consumer products, there is no safe level of smoking: it is a product that kills up to two thirds of its long-term users, causes 70% of lung cancer cases, and massively increases the risk of stillbirth. It causes asthma in children; dementia, stroke and heart failure in old age; disability and early death. Almost every minute of every day, someone is admitted to hospital because of smoking, and up to 75,000 GP appointments every month can be attributed to smoking. It takes a massive toll on both our health and our NHS.
Smoking also takes its toll on our economy. Detractors will say, “But what about the £10 billion a year the Treasury gets from taxes on tobacco—how will the Chancellor do without that?” But independent analysis shows that the overall cost of tobacco to society totals £17 billion a year, completely offsetting—and then some—whatever we receive in taxes. The cost of smoking is equivalent to the annual salaries of more than half a million nurses, almost 400,000 GPs, 400,000 police officers or 400 million GP appointments. Reducing smoking rates will bring down those costs and help our economy to become more productive. Our modelling suggests that the smoke-free generation policy we are looking to introduce will reduce smoking rates in England among 14 to 30-year-olds to close to zero by as early as 2040, and will provide cumulative productivity benefits of up to a staggering £85 billion over the next 50 years. That is why bold action is necessary. We are making history with this Bill.
I took up smoking at 14 and gave it up as my 21st birthday present to myself. It was not easy. To this day, I hate talking about smoking because I sometimes think, “I’d quite like a cigarette”, but I shall never be tempted. It is so hard to quit. To those hon. Members who mentioned that nicotine is not bad in itself—yes, it is; it is desperately addictive. When people try to give up nicotine, they suffer cravings and get irritable. It is really difficult to give up nicotine, no matter how it is consumed. Combustible tobacco certainly has all sorts of other horrendous health issues, but nicotine itself is not a harmless product by any means. There is no safe level of nicotine consumption.
Like so many smokers, I desperately wanted to give up this lethal addiction. We want to help more smokers than ever to quit through significant new funding and support. All smokers deserve our support to quit and lead a healthier, longer life, which is why we have announced we are doubling the funding to stop smoking services across England to a total of £138 million a year, to help around 360,000 people quit every year. We are also backing these efforts with substantial new money to support marketing campaigns. As my right hon. Friend the Member for Clwyd West (Mr Jones) and my hon. Friend the Member for Northampton South both pointed out, four in 10 smokers think vaping is as bad as, if not worse than, smoking cigarettes. With this substantial marketing support, the stop smoking campaigns will be common sense and easy to use, setting out the facts to help smokers to be able to quit. We will also provide vapes as a quit aid to those who want to stop smoking.
As colleagues will know, I am passionate about helping mums, mums-to-be and new families, which is why I have asked officials to redouble our efforts to tackle smoking in pregnancy. Women who smoke during pregnancy are two and a half times more likely to give birth prematurely. Smoking is also a significant driver of stillbirth. I want to do everything I can to spare parents the heartbreaking tragedy of losing a baby. One in 10 mothers smokes at the time of delivery; this figure rises to one in five in some parts of the country. Pregnant women who receive financial incentives are twice as likely to successfully quit in pregnancy as those who do not. We must also protect pregnant women and their babies from second-hand smoke. We are working to roll out a financial incentive scheme by the end of 2024 to help all pregnant smokers—and, crucially, their partners— to quit.
As I have said, vapes can be an effective tool to help smokers quit. That is why we have committed to providing 1 million vapes to smokers through our “swap to stop” programme. That is a different approach from that taken in the WHO proposals; we are proud to take it, because we know it works.
Along with millions of parents across the country, I am alarmed by the number of children using vapes, a device that should be used only by adult smokers who want to quit smoking. Youth vaping has tripled in the last three years, and one in five children has used a vape. We have a duty to protect children from under-age vaping while their lungs and brains are still developing, so we are taking decisive action to reduce the appeal and availability of vapes.
In our recent public consultation, we sought views on restricting flavours, point-of-sale displays and packaging, and on restrictions on disposable vapes. We will take tough new action to reduce the appeal and availability of vapes to children through the tobacco and vapes Bill.
I totally get the point that my hon. Friend the Member for Northampton South made about flavours. These are all areas that are being carefully looked at, but he will appreciate that Cherryade, Yazoo and bubble-gum flavours are not really designed for him and me. Packages that look like a little Coke bottle, or are brightly coloured, like a bubble-gum package, are marketed not at him, but at children. Of course we see the vape stand right next to the sweets stand, and vapes are sold, conveniently, at pocket-money price, so let us not be naive about this. A lot of the flavours and colours are specifically designed to appeal to children, and that has to stop. A strong approach to enforcement is a crucial part of making sure that it has a real-world effect.
Under-age and illicit sales of tobacco, and more recently vapes, are undermining the Government’s work to regulate the industry and protect public health. We are cracking down on this appalling illicit trade by backing enforcement agencies, including Border Force, His Majesty’s Revenue and Customs and trading standards, with £30 million extra per year. In the tobacco and vapes Bill, we will introduce powers to give on-the-spot fines, to tackle under-age sales.
Sir Christopher Chope
Will my right hon. Friend comment on the undue influence of China on the WHO, as exemplified in my remarks? China is trying to ensure that its policies are adopted by the WHO, and it seems to be funding the WHO and controlling it. Should we not be concerned about that?
Dame Andrea Leadsom
I will look into my hon. Friend’s concerns and respond to him in writing. That is probably the most helpful I can be, because that is not something that I have been briefed on. I am, as are all hon. colleagues across the House, concerned about the undue influence of China on public policy that finds its way into national policies. I am grateful to him for raising the issue.
Mr David Jones
Does my right hon. Friend know why the WHO exhibits such hostility to the harm reduction measures that the United Kingdom Government are putting in place?
Dame Andrea Leadsom
No, to put it simply—and I do not know if that is the case. I am grateful to my right hon. Friend. As he knows, I always listen carefully to his usually very wise words, so I will take that away and get an answer for him.
We should be proud of our record on keeping tobacco control at the top of not just the national agenda, but the global agenda. We are a world-leading trailblazer in tobacco control, and our delegation to COP10 will proudly set out our unique and sovereign approach. My firm belief is that our policy could save countless lives in this country and, through our example, overseas. Crucially, we are using the conference to showcase UK plc to the world.
I say to the hon. Member for Linlithgow and East Falkirk (Martyn Day) that I have been delighted with the collaborative, cross-party approach that colleagues in the devolved Administrations have taken to our smoking and vapes Bill. However, importantly, at an official level, there has recently been an agreed approach to the COP10 delegation. I hope that reassures him that all views from all parts of the United Kingdom are carefully being taken into account.
COP10 will be a forum in which we can exchange ideas with countries such as Canada and Australia. We will back other countries in their efforts to kick the habit, but we will also present our case as strongly as we can. We are going beyond the convention in certain areas, and we have a different view in others. All colleagues should be reassured that we alone will decide what those views are, through our sovereign Parliament.
Andrew Lewer
Small is beautiful. I found myself agreeing with virtually everything that everybody said; I do not think I have ever before been in a debate, here or in the main Chamber, where that has happened. It is confirmation that light is better than heat. Alas, the Minister is not attending COP10, but I am grateful to her for naming the chief delegate, and for outlining the policy stances in more detail than we have had before.
I have not said, and I do not think anyone else has, that nicotine is harmless. I do not want to minimise the impact of nicotine, but think of a man emerging from the desert, dying of thirst, who is given a glass of dirty water. The fact that he has a glass of water is more important than the fact that it is not perfectly crystal-clear water. That is the case with smoking cessation. I absolutely agree about children, but we should bear in mind the new burdens doctrine, and the huge plethora of laws that we already have. Properly funding trading standards, so that it can tackle the issue, is more critical than having new regulations. Also, there is no evidence for claims about a gateway; the recent University College London studies on 16 to 25-year-olds are especially compelling on that.
We need to dispel naiveté in both direction about flavours. We heard about packaging that looks like Coca- Cola bottles, and having the vapes next to the sweets. Let us just get rid of all that, and not have an argument about silly designs that are obviously for children. However, let us also not be naive about the huge number of people who use flavoured vapes, and about modern 20 and 30-somethings, who think a bubble-gum flavour is not obviously for a teenager; it is for them. Lots of people use flavoured vapes. I have a relative in her 30s who does. As a result, she is not smoking, and that is the more important thing. Plainer packaging that is not directed at children and not having silly names is fine, but flavours that take people away from the taste of tobacco have an important role to play.
I am not a banner by nature—I have voted against various measures banning stuff—but cigarettes are different. If, when smoking was invented, we had said, “The idea is that we roll up a weed and set fire to it to give ourselves lung cancer,” smoking would never have existed. When I was a Member of the European Parliament, I was on STOA, the Science and Technology Options Assessment Panel, which was supposed to be the science and technology committee on evidence-led policymaking. However, some of its members—I was one of them—were honest with themselves that we often come to an entrenched position and then go find the evidence that backs it up, rather than the other way round. We all do it; we do not all admit to it. It is useful that we are at an early stage of consultation, so that we do not have an entrenched idea that we must defend with convenient evidence. Instead, we are evidence-led, rather than having set in stone what we will do. The reassurances we have received on that point, and the outlines given on where we are going with COP10, are extremely welcome. With that positive and uplifting statement, it is my great pleasure to conclude the debate.
Question put and agreed to.
Resolved,
That this House has considered COP10 to the WHO Framework Convention on Tobacco Control.
Written Statements
(3 months, 3 weeks ago)
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Camp Bagnold: Gifting to UN
(3 months, 3 weeks ago)
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The Minister for Armed Forces (James Heappey)
I am today giving an update to the House describing the gifting of infrastructure to the United Nations multilateral integrated stabilisation mission—MINUSMA—in Gao, Mali. This infrastructure carried a net book value of £3,522,479 as at 7 September 2023.
MINUSMA is a UN-led non-combat mission to support the political processes in Mali. The UK contributed to MINUSMA from December 2020 to February 2023 with the long-range reconnaissance group Mali, under the name Op Newcombe.
On 16 June 2023, the transitional Government of Mali asked MINUSMA to leave Mali “without delay”, which was formalised in a United Nations Security Council resolution dated 30 June 2023 that directed MINUSMA to leave Mali no later than 31 December 2023.
On 17 July 2023, the Defence Secretary laid a written ministerial statement and departmental minute in Parliament to explain that the UK intended to gift the UK camp infrastructure to the UN as part of the withdrawal from Mali, for $1. The UN subsequently wrote requesting authority to dispose of the camp with no requirement to gift.
The process for transferring legal ownership of the camp to the UN has now been completed. The UK has transferred ownership of the camp infrastructure to the UN and no longer has any financial obligation for disposal or remediation of the site.
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High Speed 2: Safeguarding
(3 months, 3 weeks ago)
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The Secretary of State for Transport (Mr Mark Harper)
I am today formally lifting the safeguarding directions for HS2 phase 2a (between the west midlands and Crewe). In doing so, this Government are delivering on a commitment made in the Command Paper “Network North: transforming British transport”, published on 4 October 2023.
Safeguarding is a planning tool used to protect the land needed for the HS2 scheme from potential conflicting development. The safeguarding directions require the local authority to consult HS2 Ltd on planning applications within the safeguarded land. By lifting safeguarding, the Government provide certainty to people along the former route of HS2 and make development easier, as HS2 Ltd will no longer object to proposed development in the area to which the safeguarding directions had applied.
To allow phase 1 of HS2 to connect to the west coast main line I am continuing to safeguard land close to Handsacre. This connection at Handsacre will:
allow passengers to travel on HS2 trains through to Manchester, Liverpool and Scotland, joining the west coast main line for the rest of their journeys; and
reduce the journey time between London and Manchester by nearly half an hour (down to 100 minutes), facilitated through an upgrade of Handsacre junction which will allow more trains to reach key destinations north of Birmingham.
For areas where safeguarding has been removed, I have also today closed the rural support zone, extended homeowner protection zone and homeowner payment schemes and will review existing applications on a case-by-case basis. This is because these schemes were established to support those impacted when the Government intended to build phase 2 of HS2. The need to sell scheme remains open for now as a “safety net”, for those who meet the criteria and have a compelling need to sell, until the blighting effect of HS2 has fully receded. Further information about the different property schemes can be found at: https://www.gov.uk/claim-compensation-if-affected-by-hs2/overview.
High Speed 2 Ltd (HS2 Ltd) is writing to the owners of properties affected by this update explaining what these changes mean to them personally.
The Network North Command Paper also committed that phase 2b safeguarding will be amended by summer 2024, to allow for any safeguarding needed for Northern Powerhouse Rail. I can confirm that this work is underway and I will set out further details regarding those areas that will come within the scope of these new safeguarding directions in due course.
The lifting of safeguarding is separate from the programme for disposing of any property no longer needed for the HS2 project, which will begin shortly. More details will be set out soon.
I am depositing the High Speed 2 Handsacre connection to the west coast main line safeguarding directions and guidance, the Handsacre west coast main line safeguarding directions plans and the Handsacre west coast main line safeguarding directions key plan in the Libraries of both Houses.
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International Maritime Law
(3 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Transport (Guy Opperman)
My noble Friend, the Parliamentary Under Secretary of State for Transport (Lord Davies of Gower) has made the following ministerial statement:
I am making this statement to record updates to maritime legislation as a result of changes to international law. This fulfils a commitment made to Parliament to make such a statement. The legislative changes came into force on 1 January 2024.
Some domestic maritime secondary legislation includes ambulatory reference provisions to give direct effect in UK law to certain amendments to international obligations. This means that where the legislation refers to a provision of an international instrument, such as a requirement in a convention, this reference will be ambulatory, i.e. a reference to the most up to date version of that provision. This approach ensures so far as possible that the UK keeps up to date with its international maritime obligations.
Amendments to mandatory requirements in the International Convention for the Safety of Life at Sea, 1974 (“SOLAS”) took effect in UK law on 1 January 2024. SOLAS, a key maritime treaty, is frequently reviewed and amended by the Member States of the International Maritime Organization (IMO) to improve safety and to take account of new technologies. The technical provisions of SOLAS are usually amended to follow a four-year cycle of entry into force.
This statement summarises the amendments which affect five chapters of SOLAS. Full details of the amendments are available on the IMO website and guidance on all the changes being made will be available on www.gov.uk.
SOLAS Chapter II-1 relates to ship construction and makes mandatory the international code of safety for ships using gases or other low-flashpoint fuels (“the IGF Code”). The substantive changes to the IGF Code apply only to ships constructed on or after 1 January 2024. These include permitting a higher loading limit for liquefied gas fuel tanks, new requirements for fuel distribution outside of machinery space, improvements to the requirements for explosion relief systems for ships with piston type internal combustion engines, improvements to the requirements for fire protection for fuel storage hold space and a requirement for fuel preparation rooms with potential ignition sources to be provided with a fixed fire-extinguishing system. Other changes to the IGF Code include improvements to the method of calculating liquefied gas fuel tank locations, aimed at preventing explosions, amendment to the list of suitable pressure relief systems, and amendments to materials that can be used for the welding of metallic materials and non-destructive testing.
Amendments to SOLAS Chapter II-1 have also been made with respect to towing and mooring equipment, vessel stability, subdivision, watertight and weathertight integrity, and stability management. For towing and mooring, there are now more specific requirements for ships built from 1 January 2024 relating to the design of mooring arrangements, mooring equipment and fittings. Existing guidance on shipboard towing and mooring equipment has also been revised for ships built from 1 January 2007 and from 1 January 2024.
Chapter II-1 also contains technical regulations which set out complex requirements for vessel subdivision and stability. The IMO has developed explanatory notes for these requirements. A new provision has been included in SOLAS Chapter II-1 which aims to improve stability management by providing requirements for water level detectors specifically for multiple hold cargo ships, other than bulk carriers and tankers. Finally, there are editorial amendments to the requirements regarding the emergency source of electrical power in passenger ships and cargo ships.
SOLAS Chapter II-2 contains rules for fire protection, detection and prevention and makes mandatory the international code for Fire Safety Systems (“the FSS Code”). An amendment has been made to remove the need for costly isolators to be fitted to fire detector units with individually locating detectors on cargo ships and passenger ship cabin balconies. The wording of some of the requirements for inert gas fixed firefighting systems has also been amended.
SOLAS Chapter III makes provision for life-saving appliances and arrangements on ships and gives effect to the International Life-Saving Appliances Code (“the LSA Code”). The LSA Code has been amended to remove the requirement for lifeboats that have two independent propulsion systems, where the arrangement consists of two separate engines, shaft lines, fuel, tanks, piping systems and any other associated ancillaries, to carry oars. The requirement for oars continues to apply to all other lifeboats except free-fall lifeboats. The second amendment allows the launching and recovery of reserve rescue boats on certain types of lighter ships to be made by manual means, such as mechanical hand-operated winches, subject to minor qualifying criteria. The third amendment removes the requirement for free-fall lifeboats to be capable of being launched and towed when the ship is making headway at a speed of not more than 5 knots in calm water.
SOLAS Chapter III is also amended in relation to the survival craft embarkation and launching arrangements applicable to cargo ships of 20,000 gross tonnage and above. The amendment has the effect of applying the requirement to davit-launched lifeboats, rather than to all lifeboats.
SOLAS Chapter IV relates to radiocommunications. A comprehensive review of the Global Maritime Distress and Safety System (GMDSS) was undertaken in the IMO to modernise the GMDSS communications, remove obsolete requirements and to update guidance. SOLAS chapter IV has been revised, with consequential amendments to other SOLAS Chapters, to reflect the IMO’s findings and consolidate the requirements. There is a new obligation for two-way distress alerting radios to automatically include the position of the ship. In the case of malfunction of the source navigation receiver, the position and time of the position fix must be manually updated in the radio at least every four hours.
Chapter X of SOLAS gives effect to the high-speed craft codes, 1994 and 2000, which prescribe the standards for construction and operation of seagoing commercial high-speed craft such as hovercraft, catamarans and hydrofoils. The requirements for life-saving radiocommunication appliances have been moved within these codes as a consequence of the decision to move the life-saving radiocommunications requirements from SOLAS Chapter III (life-saving appliances) to SOLAS Chapter IV (radiocommunications).
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