Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, and it is quite likely that there will be, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026
(1 day, 4 hours ago)
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Lord Livermore
That the Grand Committee do consider the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026.
Relevant document: 48th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, this debate will also consider the take-note Motion tabled by the noble Lord, Lord Clement- Jones, on the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025.
These statutory instruments form part of a wider package of legislation that gives effect to the new business rates multipliers for qualifying retail, hospitality, leisure and high-value properties. I thank the Secondary Legislation Scrutiny Committee for the detailed and thoughtful consideration of these statutory instruments in its 40th and 48th reports. Business rates are based on a property’s rateable value and a multiplier for each tax year. In the Autumn Budget 2024, the Government announced a comprehensive set of reforms to the business rates system in England, including the introduction of three additional multipliers from April 2026.
The three new multipliers are: a small business retail, hospitality and leisure multiplier for qualifying retail, hospitality and leisure properties with rateable values below £51,000; a standard retail, hospitality and leisure multiplier for qualifying retail, hospitality and leisure properties with rateable values of £51,000 to £499,999; and a high-value multiplier for properties with rateable values of £500,000 and above. In the Budget last November, the Government announced the rates for these new multipliers. These new rates will deliver permanently low multipliers for eligible retail, hospitality and leisure properties with rateable values below £500,000.
The Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026 prescribe the circumstances in which the new multipliers will apply. The new multipliers will replace the pandemic-era retail, leisure and hospitality reliefs that currently apply. These reliefs were introduced on a temporary basis in 2020, recognising the exceptional circumstances of the time. Continuing these reliefs would cost around £1.7 billion per year. The new multipliers will benefit over 750,000 retail, hospitality and leisure properties. However, unlike the existing relief, they are permanent, thereby providing businesses with greater certainty and support. They are also not subject to a cash cap, meaning that all qualifying properties in a retail, hospitality and leisure chain can benefit. Taking into account the upcoming business rates revaluation, the tax rate that retail, hospitality and leisure properties on the small business multiplier will pay next year will fall by nearly 12p overall. Similarly, the rate for retail, hospitality and leisure properties on the standard multiplier will fall by 12.5p compared with what they are paying now.
To ensure that support for the high street is sustainable, the Government will fund these new multipliers through higher rates on the top 1% of properties, those with rateable values of £500,000 and above. From April, the most valuable properties, such as large distribution warehouses occupied by online giants, will pay a tax rate that is 33% higher than that paid by small high street properties.
I turn to the Motion laid by the noble Lord, Lord Clement-Jones, which relates to the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025. These regulations set out the eligibility for the new multipliers and passed into law last year. The Government’s objective in setting these regulations was to reflect the same definition for eligibility as the existing retail, hospitality and leisure relief. We want sectors that benefited under the previous relief to continue benefiting under this new relief. For example, under the existing relief, businesses benefit if they are wholly or mainly used for retail, hospitality or leisure purposes. That includes the sale of most goods, services, food and drink or entertainment as well as accommodation to the public. These requirements are the same under the new relief.
Similarly, under the existing relief, businesses benefited only where they were used for in-person activity. The same principles apply under the statutory instrument that we passed last year. The Government have retained the same approach to ensure continuity in our support for the sector while making this support permanent and uncapped.
The new multipliers are being introduced alongside a revaluation of non-domestic properties, which the Valuation Office Agency carries out independently every three years. Currently, property values are based on values from 2021, during the pandemic. Values were generally lower at this time due to the unusual economic situation that the pandemic created. Many properties are therefore seeing their rateable values increase at this revaluation, reflecting post-pandemic recovery.
To support affected businesses, the Government announced in the Budget a significant support package worth £4.3 billion over the next three years. First, we are implementing transitional relief, which will cap increases next year by 5% for the smallest properties and up to 30% for the largest properties. Secondly, we are expanding the supporting small business scheme. Currently, the scheme caps the bill increases of those losing some or all their small business rates relief or rural rates relief. We are expanding it to those which are currently eligible for the 40% retail, hospitality and leisure relief. The supporting small business scheme will cap bill increases at the relevant transitional relief cap or £800 per year, whichever is higher.
Together, these schemes will mean that the majority of properties facing increases will see them capped at 15% or less next year, or £800 for the smallest. Even after the revaluation, around a third of properties will pay no business rates at all as they receive 100% small business rate relief. A further 85,000 properties will benefit from reduced business rates as this relief tapers. We have also extended the small business rate relief second property grace period from one year to three years, to support small businesses as they grow.
Following the Budget, concerns were raised about how the valuation methodology for pubs was applied. We have listened and responded to those concerns by launching a review into how pubs are valued for business rates. This review will also cover how hotels are valued and will include extensive engagement from valuation experts, businesses and their representatives. It will report in time for any decisions that follow to be implemented for the 2029 revaluation.
In the meantime, we are taking steps to support pubs for not only next year but the next three years. From April, pubs and live music venues will receive 15% off their new business rates bill on top of the support announced in the Budget. Bills will then be frozen in real terms for a further two years. This support is worth around £1,650 to the average pub and will mean around three-quarters of pubs seeing their bills either falling or remaining the same next year. This decision will mean that the amount of business rates paid by the pub sector as a whole will be 8% lower in 2028-29 than it is today.
The Government are also committed to going further to reform the business rates system to incentivise more investment. That is why we published a call for evidence on the next phase of business rates reform in November last year; that consultation will close later this month, and the Government will respond in due course. We recognise that transforming the business rates system is a multi-year process, and we are committed to working with stakeholders throughout this process to achieve meaningful change.
The reforms being delivered through these statutory instruments will benefit over 750,000 properties across England while ensuring that the top 1% most expensive properties, including those used by online giants, pay their fair share. They will support investment and create a fairer business rates system. I beg to move.
Lord Clement-Jones (LD)
My Lords, I wish to speak to the Motion standing in my name on the Order Paper.
I have not secured this debate to oppose the Government’s ambition to support the high street. Permanent lower multipliers for retail, hospitality and leisure are, in principle, a welcome step towards stability. Instead, I have tabled this Motion to highlight a critical flaw in the definition of who qualifies for this support. By drawing the lines of eligibility too narrowly, these regulations inadvertently exclude the engine room of our £8 billion music industry and the R&D hubs of our visual arts sector, threatening the very existence of the UK’s grass-roots creative infrastructure.
Our recording studios face a perfect storm and I know that the noble friends of the Minister, the noble Lord, Lord Brennan, and the noble Baroness, Lady Keeley, are both very supportive of what we are trying to highlight today and regret that they unavoidably cannot be here to say so. I know that the noble Lord, Lord Berkeley of Knighton, would also want to say something if he were able and did not have other engagements. Under the 2026 revaluation, which coincides with these new multipliers, these businesses face an average increase in rateable value of 45%, with some seeing hikes of nearly 100%. Simultaneously, because Regulation 3 excludes them from the retail, hospitality and leisure RHL category, they are denied the lower tax multiplier that their neighbours on the high street will receive.
The Music Producers Guild has provided alarming evidence that 50% of studios surveyed are considering closure within the next year. These businesses operate on ultra-thin margins, often requiring 85% occupancy just to break even. They compete in a global market. If it becomes too expensive to record here, artists will simply move to eastern Europe or the United States. We are already seeing top UK artists recording major projects abroad. The urgency cannot be overstated. I have seen correspondence from the Music Venue Trust highlighting a terrifying reality: directors of these businesses are running their figures for April and realising they will be insolvent. Under HMRC rules, to continue trading would constitute what is called fiscal recklessness, risking personal liability. This means we risk a wave of closures before the first bills even land, simply because the Government have failed to provide certainty.
Let me draw the Committee’s attention to the 40th report of the Secondary Legislation Scrutiny Committee. The committee explicitly noted the submissions from UK Music and the Music Producers Guild regarding this exclusion. The committee highlighted a glaring inconsistency in government policy. Film and TV studios currently benefit from a specific 40% business rates relief, which the Treasury confirmed will continue. The SLSC invited this House to question the Minister on this matter, so on what basis does the Treasury protect the infrastructure of our film industry while the infrastructure of our music industry, facing identical economic pressures, is left to face what the sector describes as an existential threat?
The Government’s justification for excluding these studios is that they are not reasonably accessible to visiting members of the public. I must challenge this, using the Government’s own guidance. Paragraph 22 lists funeral directors, shoe repairers and key cutters as eligible because they constitute the provision of a service. Recording studios are functionally identical: they provide a specialist service accessible to any member of the public willing to pay for it, be that a professional band, a local choir or a community group. Do the public browse a funeral parlour? No, they book a specific service. A recording studio is no different. If a key cutter qualifies, surely a recording studio does too.
We know that the Government can act when the system creates anomalies. Just weeks ago, following concerns regarding pubs, the Chancellor announced a 15% reduction in bills and a freeze for two years. The Minister in the other place, referring to music venues, said:
“It would not be right to seek to draw the line in a way that includes some and not others”.—[Official Report, Commons, 27/1/26; col. 771.]
Yet that is exactly what these regulations do: they support the venue where music is performed but tax the studio where music is created out of existence. The music ecosystem is a pipeline: if you destroy the creation phase, you eventually starve the venues. The Chancellor justified the pub relief by calling pubs “community assets”. If that is the test, studios that host community choirs, youth education projects and amateur bands must surely pass it.
Reports suggest that the Chancellor is resisting wider relief for hotels and restaurants because she cannot afford to support every business. I understand that constraint, but we are not talking about thousands of hotels; we are speaking of roughly 500 recording studios. The cost must be negligible compared with the £300 million package announced for pubs, yet the value to the £8 billion music industry is existential.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
It might be helpful to the Committee if I explain that we are considering only the first Motion on the agenda at this time. I shall call the noble Lord, Lord Clement-Jones, to move his Motion when we have concluded this debate. We are debating them both, but we can take only one at a time. The one that we are taking now is the first Motion from the noble Lord, Lord Livermore, but the noble Lord, Lord Clement-Jones, has been in order by speaking to his Motion, because it has been grouped with the government Motion.
The Earl of Clancarty (CB)
My Lords, I am very pleased that the noble Lord, Lord Clement-Jones, has called this debate, which is so important for the arts. He has summarised the arguments extremely well. I am grateful, too, to the noble Lord, Lord Livermore, for his introduction.
I am grateful for the briefings from both the Music Producers Guild and UK Music. I am particularly grateful for the conversation I had last week with Gaby Grafftey-Smith, who runs the prestigious Angelic Studios in Northamptonshire. Angelic was founded by musician Toby Smith of Jamiroquai—
“by a musician for musicians”,
as its website eloquently puts it. Since 2017, when Toby Smith sadly died, the studio has been run by Gaby. One of the first things that she told me was that no one runs a studio to make money; they do so out of a passion for music. It is less a business and much more a vocation. The artists and technicians themselves build up the heritage. A studio develops organically in a creative manner. In terms of business, the margins are tight, as the noble Lord, Lord Clement-Jones, said, and there is a ceiling on income, because only so many artists can be booked. The space itself often has to be for the desired sound, which may be created by choirs or a grand piano—a big space.
It is also precious. Gaby talks about the precise mix of cultural and technical specification that make up her recording studio and others. Trust is built up over time between the studio recording engineer and artist. Each recording studio will have a different character and a different sound; they are all individual. She told me about a drummer for a well-known band, who, having tried different studios across the country, has said that her studio is the only one that provides the right environment for the particular sound that the drummer is trying to achieve.
Angelic is also one of a few key residential studios, which further cements the crucial relationship between artist and studio. In particular, for major stars such as Harry Styles or Black Sabbath, it means, as Gaby puts it,
“a unique, rural, isolated space to work”.
If such artists cannot find such spaces in the UK, we will lose these stars to America. By their very nature, they are not spaces where public access is appropriate, but, as the noble Lord, Lord Clement-Jones, said, they can nevertheless be used by anyone.
Like other studios, Angelic also has an apprenticeship scheme, but Gaby points out that, if recording studios cannot afford to take on those who are learning what is a key craft in the music recording industry, those who come into the industry in the future are much more likely to be from a moneyed background. That is an effect that the Government ought to think hard about. The major effect would of course be on the artists themselves, with artists turning to studios in other countries, such as in New York or Paris, in the event of studios closing or booking charges increasing. Just as worrying is the possibility that new British artists would not get a rung on the ladder or be able to record in a professional environment alongside established musicians.
Like all recording studios, Angelic is extremely worried about the increase in business rates. The Music Producers Guild reports that, for Angelic, that increase would be 48%—slightly higher than the average predicted increase of 45%, itself a massive increase. On business rates, Gaby believes that, for the reasons that I have laid out, studios should have their own category and be linked to yearly turnover, rather than a square-footage rateable value. I have described the character of one recording studio to show how much creative effort goes into the provision of one important specialist facility that cannot be expected to grow and diversify like an ordinary office-based business—it grows in a different way.
It ought to be pointed out here that Abbey Road, with its mixed portfolio, is, for obvious reasons, an outlier. Abbey Road is far and away the most famous recording studios in the world and a tourist attraction, so identified is it globally with the Beatles—although, of course, those studios also have a remarkable classical legacy that stretches back to Elgar, as the noble Lord, Lord Berkeley of Knighton, will well know.
I hope that this debate will make it very clear how much our recording studios are as much critical creative infrastructure for the music industry as film studios are for the film industry. Yet film studios receive 40% relief on business rates without, of course, needing any public access. The loss of a single recording studio would be tragic, but the loss of possibly up to half of our recording studios would be catastrophic—a tragedy that would be writ large on the music industry.
Lord Freyberg (CB)
My Lords, I, too, add my thanks to the noble Lord, Lord Clement-Jones, for setting out the issues surrounding these regulations with such clarity. Like the noble Earl and the noble Lord, I wish to express my gratitude to the Music Venue Trust, UK Music and the Music Producers Guild for their helpful briefings and for joining several Members of this House —the noble Lords, Lord Clement-Jones, Lord Parkinson of Whitley Bay and Lord Bassam, and my noble friend Lord Clancarty—before Christmas to brief the Arts Minister, the noble Baroness, Lady Twycross, on the consequences of these measures for grass-roots music venues, recording studios and artists’ studios. Let me briefly set out how I see the key issues facing each of the sectors affected by these regulations.
For grass-roots music venues, the picture is stark. Despite contributing over £500 million to the UK economy in 2025, the sector remains structurally fragile, with an average profit margin of just 2.5% and over half of venues showing no profit at all. These venues face a collective £7.2 million increase in their tax base from the 2026 revaluation. Hundreds will see rateable values rise by over 50%, with some experiencing increases of 100% or more. The Music Venue Trust projects that between 200 and 300 venues could close over the next four to five years. For venues already operating on razor-thin margins, these are not merely bills; they are closure notices.
For recording studios, the situation is equally perilous. Around 250 studios—roughly half the UK’s commercial studio base—are at risk of closure without mitigation by April 2026. Studios are facing an average business rates increase of 45%, with some experiencing rises of up to 100%.
These are not marginal businesses. Dean Street Studios, created by Tony Visconti and used by artists from David Bowie to Adele, has already closed three of its commercial studios, sold equipment and cut staff by 80%. The Motor Museum in Liverpool, which has supported artists from Oasis to Arctic Monkeys, is fully booked seven days a week, yet it tells us that a mere £50 increase in daily rates would drive away the emerging artists it exists to support. The studio is on track to becoming unviable.
More than 75% of recording studios are outside London, in Manchester, Liverpool, Birmingham and beyond. This is not a London-centric problem; it is a crisis affecting local economies, regional talent development and cultural infrastructure across the entire country.
As the noble Lord, Lord Clement-Jones, highlighted, the visual arts sector faces the same structural vulnerability. Artists’ studios operate on extremely low margins, keeping rents deliberately below market rates to remain affordable. Like grass-roots music venues, they function as public-benefit cultural infrastructure, not commercial property. The removal of retail, hospitality and leisure relief, combined with the new multiplier, will force rent increases that artists already at breaking point cannot absorb—or it will trigger studio closures. We have already seen this pattern in major cities across the country.
As the noble Lord, Lord Clement-Jones, has also highlighted, the 40th report of the Secondary Legislation Scrutiny Committee drew attention to a notable contrast in the Government’s approach. It observed that film studios benefit from a specific business rates relief: a 40% reduction on gross bills until 2034, worth some £470 million over 10 years. Yet recording studios, which are equally critical creative infrastructure for the music industry, receive no equivalent support. Indeed, the regulations before us specifically exclude premises used for the production or recording of music. This makes little sense.
Lord Watson of Wyre Forest (Lab)
My Lords, I declare my interest, as in the register, as the proud outgoing chair of UK Music, the umbrella body for the British music industry. I am sure I do not have to tell my noble friend that the United Kingdom is one of only three countries in the world that remain net exporters of commercial music. That is not an accident; it is the result of a delicate and highly successful ecosystem. After two terms and six years chairing UK Music, I have spent a great deal of time reflecting on what makes this country so distinctive in the breadth and quality of its music, and its renowned commercial success. There is no single explanation, but there are four essential pieces to that jigsaw.
The first is our songwriters. They are unique, special and precious. They are often contrarian, usually very clever, and sometimes fragile and tender, much like the songs they write. The second is our performers—the artists who wear their heart on their sleeve night after night, festival after festival. Last week, it was a pleasure to see British artists Lola Young and Olivia Dean win acclaim on the world stage at the Grammys. The third is our musicians. They are technically gifted, are often poorly paid and frequently struggle to make ends meet. Yet, for them, music is often not just a job but a vocation.
The fourth piece of that jigsaw, and often one of the most overlooked, is our producers and their recording studios. A few are famous, such as AIR Studios, founded by Sir George Martin, which still has trailblazing engineers such as Olga FitzRoy, who helped to give the London 2012 Olympic Games their music; she has also worked with Coldplay and my personal hero, George Michael. Then there is Mickie Most, the founder of RAK Studios, who worked with artists including Herman’s Hermits, The Animals and Jeff Beck.
However, there is also a generation of producers who are perhaps less well known but still highly regarded around the world. They include: Manon Grandjean, a leading figure from the grime scene, who has worked with Stormzy and Dave; Paul Epworth, a producer for both Adele and Florence and the Machine and the owner of the Eurythmics’ former studio; Catherine Marks, an award-winning producer who has worked with Alanis Morissette and Wolf Alice; and the great Cameron Craig, a mixer and producer for Grace Jones and Annie Lennox, with multiple Grammy awards to his name.
Together, these producers and studios shape the sound of modern Britain and underpin our global success. That is why I am extremely grateful to the noble Lord, Lord Clement-Jones, for bringing this important report from the Secondary Legislation Scrutiny Committee to the attention of the Committee.
One of the reasons given for excluding recording studios from this measure is that, unlike music venues, they are not accessible to the public. With respect, that suggests a misunderstanding at the Treasury of what recording studios are and the role they play in the music ecosystem. Recording studios are not private; they are not private members’ clubs. They are working spaces. They are social and cultural. Anyone can hire them—artists, musicians, producers and engineers do so every day. Some of them even have bars. The sector spans everything from a small studio on an industrial estate to large facilities capable of hosting orchestras, as well as landmark studios that are part of our national cultural heritage.
This matters far beyond London, too. A brief example illustrates the point. Habitat Studio, a short walk from Manchester Piccadilly station, hosts between 120 and 150 bands every month, around 80% of whom are grass-roots artists. Alongside this, it works with established touring acts, charities and universities. Facilities such as this operate seven days a week, with small teams providing professional, affordable and reliable spaces for recording and rehearsals, and food and drink. They are not marginal operations. They are busy, productive and deeply embedded in their local music economies and cultural scenes.
What concerns me most is the logic underpinning their exclusion. First, there is an economic inconsistency. Studios face the same pressures as venues, including high energy costs, specialist premises and skilled staff. Supporting one part of the supply chain while excluding another risks distorting behaviour and, over time, pushing recording activity overseas. Secondly, studios act as regional anchors. They sustain skilled employment, support freelancers and help create creative clusters in towns and cities across the country. Thirdly, studios are not peripheral. They are upstream infrastructure. Without studios, there is no recorded music. Without recorded music, there is no touring product. Without touring, there is no export success.
Britain’s music industry is one of the country’s great success stories. It depends on an ecosystem in which every part matters, from the songwriters to the performer, from the musician to the producer and the studio that brings that work to life. If we value that ecosystem, our tax and rating policies should reflect how it functions. To borrow a lyric from a song recorded by the Korgis at Crescent Studios in early 1980, I say to the Minister:
“Change your heart, look around you”.
Recording studios are not an optional extra. They are essential cultural and economic infrastructure and our policy should recognise them as such.
Lord Fuller (Con)
My Lords, having heard from the Deputy Chairman of Committees that we were going to the first Motion first, we have the second Motion first. I want to go back. I do not want to talk about studios. It is not that I do not know anything about recording studios; it is that I have nothing to add to what noble Lords have said.
I want to raise a wider point about what happens when you make changes in the business rates system. It is important that the business rates system has the right incentives and is fair to small businesses, particularly those on the high street that make such a cultural contribution to our nation. We have seen in the newspapers as well as in these regulations what happens when you make alterations to the business rates that pertain to pubs, hotels, restaurants, between retail and industrial, and to large businesses versus small. It is one of those truths that the winners tend to keep quiet, but it can be existential for losers. That is partly because the amount of money that is raised by business rates is fixed and, as you give a relief in one place, it pops up as additional burdens elsewhere. That is just the way the system works.
However, for local government, stability and buoyancy in the system are important. When you change the system, there are downstream consequences, because business rates very largely pay for the delivery of local government services. Yes, there is redistribution within the nation of the money that is raised. For example, we are in Westminster, which raises nearly £1 in every £12 raised in business rates in our nation, and that £2 billion or so is redistributed to Redcar, Redruth, Wroxham and all around the country with a complicated process of ceilings and floors. There are also systems within county areas, as they tend to be, so that all the councils can pool together to grow the economy. That is important, because the system is designed with powerful incentives for councils to grow the economy on the simple truth that the more you grow the economy, the more you keep. Of course, resets happen every now and again and they are a disincentive to grow. All that effort is wasted as the business rates baseline is washed away. That is the context within which I wish to make my subsequent remarks.
In the past few weeks, there have been technical changes in the way that baselines and pooling are done that would have had material effects on district councils. For most councils, about 10% of their net budget would have been swept away, badly impacting on homelessness, recycling, building and all the things that we need to get the economy going. That is especially germane because district councils outside the M25 and the urban metropolitan centres tend to be the planning authorities that get growth going.
I know that the District Councils’ Network and, more widely, the local government family are grateful that the technical changes that could have caused that 10% disaster have been fixed for the coming year, but for one year only. As we look at business rates more generally and at altering the application of business rates, we need to make sure that the Treasury and the local government department are better aligned in future years so that we avoid the perverse outcomes that we might have seen.
It is not fair on councils to have the uncertainty. It is certainly not the right thing for the economy, because confidence and long-term stability provide that central alignment between central and local government to generate wealth in these islands. It is incumbent on the national Government to ensure that they do not accidentally damage that delicate balance that keeps the economy growing, people in work and taxes paid.
Lord Parkinson of Whitley Bay (Con)
My Lords, I add my name in support of all the noble Lords who have spoken in favour of the take-note Motion of the noble Lord, Lord Clement-Jones. I am grateful to him and to the members of the Secondary Legislation Scrutiny Committee for drawing our particular attention to the regulations before the Grand Committee.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
I apologise for interrupting the noble Lord, but a Division has been called. We look forward to hearing from him again in about 10 minutes.
Lord Parkinson of Whitley Bay (Con)
My Lords, we had to hit pause, but I shall resist the temptation to hit rewind and repeat what I said. I was echoing the points that have been made: a lot of the problems here are with the way the Valuation Office Agency tries to understand the particular nature of these important businesses. At the very helpful meeting with the noble Baroness, Lady Twycross—which the noble Lord, Lord Freyberg, alluded to—we heard from a lot of people across the sector. They are frustrated that they have one conversation with the Government but hear something different from the Valuation Office Agency. If there is a way to short-circuit that, I know that they would appreciate it.
There is also the broader question of how the Government value and account for things. Can the Minister say whether, in bringing these measures forward in the discussions that His Majesty’s Treasury had with the Department for Culture, Media and Sport, he was able to talk to the team there that works on the culture and heritage capital programme? That team is working to arrive at a Green Book-compliant way of valuing the wider benefits that we have heard about. That includes the social benefits of our cultural infrastructure in terms of not just our physical and mental health and well-being or tackling isolation and loneliness, particularly in rural areas or areas of deprivation, but trying to put a value on inspiring the future generations of musicians, artists and others.
It seems that the decision here runs counter to the Government’s noble aims in their creative industries sector plan to grow what are already world-leading sectors for the United Kingdom. Nevertheless, they are precarious and challenged by a number of global competitors, which are breathing very heavily down our necks. As the noble Lord, Lord Watson of Wyre Forest, said, we have a very delicate ecology and ecosystem in these sectors, and it is very important that we all do everything we can to maintain that.
Lord Clement-Jones (LD)
My Lords, I am not quite sure, as the procedure is rather arcane, but I think I manage to get a very quick wind-up. The positive thing today is that we have heard so much about our music ecosystem, and people have been celebrating that. The noble Lord, Lord Parkinson, was absolutely right when he talked about the impact of Covid—the perfect storm, in a sense, of inflation, national insurance and so on—but that ecosystem is hanging on. It is still there, and it is absolutely fundamental to the music industry. In a sense, that is the good news; the bad news is that some of the issues we have been talking about today on business rates are going to kill what the noble Earl, Lord Clancarty, called the critical creative infrastructure.
Baroness Neville-Rolfe (Con)
My Lords, I rise to speak to these two closely related sets of regulations, which together established the new tiered system of business rates for the 2026 financial year. One determines which hereditaments fall into each multiplier band, and the other fixes the resulting liabilities for larger premises. I thank the Minister for his clear and careful introduction to the new rules.
Although I plan to focus elsewhere today, I am very grateful to the noble Lord, Lord Clement-Jones, and others for drawing our special attention, so eloquently, to the second instrument, to the anomalous position of the recording studios and to the hikes in rates that they face. This could lead to unwelcome closures and to the expected moves of some studios abroad. I have visited Abbey Road Studios as a private citizen. Those studios are an important part of our rich art and cultural heritage, which has been referenced so many times today—indeed, I have walked across the famous zebra crossing, made of worldwide importance by the Beatles.
I am also grateful to the Secondary Legislation Scrutiny Committee for its, I have to say, critical report. It was disappointed that the Government had not seen fit to publish any of the wide range of evidence and analysis it considered on the effects of the new multipliers, other than high-level data. It also sought a proper explanation of why the Government consider it fair that, apparently without advancing evidence, a low multiplier should apply to smaller RHL premises compared to non-RHL properties. I look forward to a full response from the Minister on that report.
Prior to the election, the now Prime Minister promised a regime of permanently lower business rates multipliers. Since then, the Chancellor has claimed that, on this basis, business rates are at their lowest level since 1991, yet many businesses now face substantial increases in their bills. That is why it is so profoundly misleading to characterise these changes as record low taxation by reference to multipliers. Multipliers are not the tax rate. Bills are, and it is bills that businesses have to pay and real people have to bear.
Turning to the substance of the regulations, in their first Budget, this Government chose to cut back retail, hospitality and leisure relief, a tax rise worth £1.1 billion a year. At the same time, they have locked in automatic, inflation-linked increases every year. Can the Minister explain, in specific terms, what the Government believe the cumulative effect of these decisions will be by the end of this Parliament? What modelling has the Treasury done on business closures, employment losses and investment being deferred? For SMEs, the challenge is acute. Shops, hotels and restaurants face even steeper rises. Does the Minister seriously believe that this trajectory is sustainable?
Under the new system set out in these regulations, combined with the revaluation, businesses across retail, leisure and hospitality will face higher bills and fewer businesses will benefit from relief than under the previous 40% scheme. As the Explanatory Memorandum makes clear, local authorities previously had greater discretion over which premises benefited. Can the Minister tell the Committee what estimate the Government have made—the Valuation Office Agency will undoubtedly have provided one—of how many businesses will lose out because that discretion has now been removed?
I turn now to the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations, which I have looked at in combination with the draft Local Government Finance Act 1988 (Calculation of Non-Domestic Rating High-Value Multiplier) (England) Regulations. As confirmed in the letter sent by MHCLG to the chief finance officers of English billing authorities this very day, these set the new high-value multiplier at 50.8p, compared to a standard multiplier of 48p—an extra 2.8p in the pound.
The Government’s intention is for these measures to be directed at large online warehouses with rateable values of around £500,000 or above. However, as the provision currently stands, a greater number of retail premises will in fact be captured by the higher rate, including many of the anchor stores that play a central role in sustaining footfall and economic activity in our high streets. I remember these so well from my time at Tesco, since they were at the heart of a regeneration strategy in poorer areas that provided jobs for the unemployed and fresh fruit and vegetables, which Southampton University found materially improved health locally. The study was actually paid for by Sainsbury’s, but the outcomes were very positive.
It appears to be difficult to reconcile hitting such stores hard with the commitments made prior to the election, when it was said that business rates would be replaced with a fairer system intended to address disparities between large online operators and physical retailers. Will the Minister say why the Government are choosing to target anchor retail stores? What assessment has been made of the knock-on effects on surrounding businesses in the same development or high street when these anchors are weakened or lost?
The higher rates are being introduced alongside rising employment costs, NICs, national minimum wages, especially for the young, increased alcohol duties, high energy costs and the proposed tourist levy on hotels and bed-and-breakfast accommodation. UK Hospitality has warned that should mayoral authorities choose to exercise these new powers, the additional cost to consumers could amount to £518 million. Layering new fiscal burdens, even where individually justified, can in aggregate undermine the very sector that the Government wish to support.
At what point do the Government consider the cumulative impact of these measures, taken together, and reflect on whether the overall burden risks becoming counterproductive? Of course, I understand the challenges the Government face, but it is this cumulative effect that is such an acute problem. What consideration has been given to the impact on consumer prices and demand, especially at a time when households remain under significant financial pressure?
We would take a different approach. We would provide permanent 100% business rates relief for retail, hospitality and leisure businesses with rateable values of up to £110,000, supporting around 250,000 small businesses across the country. That support would be funded through a more disciplined and focused approach to welfare spending, as set out clearly at our party conference last year.
In these circumstances, I was pleased to hear from the Minister during his Statement on 29 January that the Government were looking at the adverse effect of the changes on hotels and that the wider review of business rates was ongoing. We heard that any changes to business rates would be considered at the Budget in the usual way. Can the Minister confirm that we are talking about the 2026 Budget and comment on the budgetary position? Is there new money for pubs and music venues—and, if need be, for hotels—or does everything have to come out of the £4.3 billion announced in the previous Budget?
Can the Minister please confirm that the wider review of business rates, which currently has an ongoing call for evidence due to close in a few days’ time, as he mentioned, will address not only large infrastructure businesses and premises such as airports, but small and medium-sized businesses in the context of the current economic and tax environment? Will he take a good look at incentives and anomalies in the VOA rules and at the need to align Treasury and local government thinking, as mentioned by my noble friend Lord Fuller? Will he look in particular at the problem facing recording and artist studios, raised so eloquently by my noble friend Lord Parkinson of Whitley Bay, the noble Lord, Lord Clement-Jones, who has led with his Motion, the noble Earl, Lord Clancarty, the noble Lords, Lord Freyberg and Lord Watson of Wyre Forest—and UK Music? Discussions with DCMS could, it seems, also be helpful to the VOA.
Noble Lords will know that we believe in backing those who take risks, create employment and invest in the productive economy. In our view, these regulations move in the opposite direction. For that reason, I urge the Government to reflect carefully on their approach and on the conclusions that they reach from the review that they are undertaking.
Lord Livermore (Lab)
My Lords, I am grateful for all the comments and questions raised throughout the debate. Let me start with the Motion tabled by the noble Lord, Lord Clement-Jones, and the comments made on that. The Motion he has laid relates to the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025. These regulations set out the eligibility for the new multipliers, and they passed into law last year. As I said at the outset, the Government’s objective in this statutory instrument was to reflect the same definition for eligibility as the existing retail, hospitality and leisure relief. We want sectors that benefited under the previous relief to continue benefiting under the new relief. We have therefore retained the same approach to ensure continuity and fairness in our support for the sector while making this support permanent and uncapped.
I have heard clearly in the course of this debate the strong views expressed and the passion for the sector. There were comments from the noble Lords, Lord Clement- Jones, Lord Freyberg and Lord Parkinson of Whitley Bay, the noble Earl, Lord Clancarty, and my noble friend Lord Watson of Wyre Forest, who I was sorry to see is not sitting on this side of the Committee. I hope there is nothing for the Whips to worry about in that.
Noble Lords asked in the course of the debate many questions around recording studios. As I have said already, our objective in setting these regulations was to reflect the same definition for eligibility as the existing retail, hospitality and leisure relief. I suspect noble Lords will not like my answer here, but that existing relief is centred around retail, hospitality and leisure properties which are
“reasonably accessible to visiting members of the public”.
If a recording studio forms part of a single property with a qualifying hospitality or retail business, and the hospitality or retail aspect is the main purpose of the property, it will qualify for the lower multipliers. It is only if a property is wholly or mainly used as a recording studio that it will not qualify for the lower multipliers, as these are generally not open to the public.
The Earl of Clancarty (CB)
I do not know whether the noble Lord, Lord Clement-Jones, is going to leap up to ask some questions as well, but the Minister did not mention film studios. A number of us talked about the possibility that recording studios could be treated in the same way as film studios and have that exemption. Is that something the Government are prepared to look at, please?
Lord Livermore (Lab)
As I said, I cannot commit to introducing any specific targeted relief, but we keep all taxes under review.
Lord Fuller (Con)
I raised the issue that this year there was a misalignment between the Treasury and MHCLG regarding some of the changes that were made to the business rates. Will the Minister commit to at least having advanced discussions between MHCLG and the Treasury in future years? There has been a temporary sticking plaster—I might characterise it as that—and the sector is very grateful for that, but it is for one year only. Having got out of the fire this year, can we be clear that we will not accidentally stumble back in on a future occasion, otherwise we will be standing here in 12 months’ time having the same debate?
Lord Livermore (Lab)
I listened carefully to the noble Lord’s remarks and do not think he asked a specific question, which is why I did not give him a specific answer. Of course, the Treasury and MHCLG talk regularly on all matters and will continue to do so.
Lord Watson of Wyre Forest (Lab)
I sincerely apologise to the Minister for my location here today. In studio terms, I have accidentally ended up on the B-side, not the A-side.
Lord Livermore (Lab)
As my noble friend knows, some of the best songs are often on the B-side.
Lord Freyberg (CB)
Artists’ studios find dealing with the Valuation Office Agency very frustrating because when they approach it, it will not give them a model answer about how the square footage of their studios is calculated. It would be very helpful if the Valuation Office Agency could give a model or examples that other councils could follow, so that there is guidance on a national basis.
Lord Livermore (Lab)
I will put that to it. I have also committed to ask it to attend the meeting. If the noble Lord would like to attend that meeting as well, I am more than happy for that to happen.
Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025
Lord Clement-Jones
That the Grand Committee takes note of the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee
Lord Clement-Jones (LD)
It is probably illegitimate to talk for more than a couple of minutes after that debate, but I want to thank everybody, particularly the noble Baroness, Lady Neville-Rolfe, who neatly incorporated some recording studio references into her broader remarks. I thank her for that.
I suppose the depressing thing—I am inured to disappointment after quite a few years in this House—is that the Minister said that the Government have retained the same approach. One would hope that a new Government would have a new approach to these things, but I take some comfort from the fact that he specifically said that, even though he did not agree that recording or artists’ studios could be brought within the kind of exemption that film studios have, reliefs are kept under review.
The second and, I thought, most important aspect is that the Minister has reaffirmed his willingness to meet to talk about the VOA aspects and the valuation basis for some of these cultural assets. I very much hope that, following the debate today, he will take the initiative in setting up a meeting with a number of us, spearheaded by the famous B operator. There is certainly quite a lot of sentiment on his own Benches, which I am sure he has noticed, that we should find some solutions in this area, even if he cannot be specific at this point. The music industry has huge support across the House, on every Bench, and I very much hope he will respond at the meeting in whatever way he can. Certainly, the first step would be if he could organise that with most of us who have taken part in the debate.
In the meantime, I move my Motion. It is a take-note Motion, which I believe is uncontroversial, but at least it shows that we have put a marker down.
Cheshire and Warrington Combined Authority Order 2026
(1 day, 4 hours ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Taylor of Stevenage
That the Grand Committee do consider the Cheshire and Warrington Combined Authority Order 2026.
Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I will speak to both this draft order and the draft Cumbria Combined Authority Order 2026, which were laid on 18 December 2025. For both the Cheshire and Warrington combined authority and the Cumbria combined authority, I will use the term “strategic authorities” hereafter, unless there is a reason to be specific in the debate.
These orders provide for the establishment of two new strategic authorities and provide for their mayoral elections, as part of the Government’s commitment to widen and deepen devolution across England. This commitment is being delivered, in part, through the devolution priority programme, which provides a fast track to establish a new wave of mayoral strategic authorities. Cumbria and Cheshire and Warrington are two of the areas on the devolution priority programme, and taking forward these statutory instruments represents substantial progress towards fulfilling our commitment to move power out of Whitehall and back to those who know their areas best. The Government have worked closely with the constituent councils within Cheshire and Warrington and Cumbria on these instruments. All the respective constituent councils have consented to the making of their instrument, and I thank the local leaders and their councils for their support.
The instruments will be made, if Parliament approves, under the enabling provisions in the Local Democracy, Economic Development and Construction Act 2009. Both strategic authorities will be established the day after the day on which the instruments are made. The inaugural mayoral elections are due to take place for both on 6 May 2027, and their elected mayors will take office on 10 May 2027 on a four-year term.
The instruments make provision for the governance arrangements of the strategic authorities. In each case, each constituent council appoints two of its elected members to be a member of the strategic authority, with the mayor also a member once in office. The strategic authority can also appoint non-constituent and associate members to support its work. Each voting member is to have one vote, and the vast majority of decisions are to be determined by a simple majority of the members present and voting. Once the mayor takes office, that majority must include the mayor, or the deputy mayor acting in place of the mayor.
The instruments provide some functions in relation to transport and economic development, but there is a strong interrelation here with the English Devolution and Community Empowerment Bill. Subject to Royal Assent to that Bill, these strategic authorities will be classed as mayoral strategic authorities, and the functions reserved for that tier will automatically be conferred to the strategic authorities. Even before the mayor is in office, these strategic authorities will be able to exercise mayoral strategic authority functions, with the exception of those that are specifically reserved for the mayor.
Baroness Pinnock (LD)
My Lords, I thank the Minister for introducing these two statutory instruments, which are progress on the way to the Government’s policy of mayoral devolution. I accept the notion and principle of devolution as being very positive, but, as the Minister will know, I have questioned the way it is being done, and I have one or two comments to make in that regard.
Mayoral strategic authorities are being created across England, ostensibly of a similar nature. However, the population of the new Cumbria combined authority will be around 500,000, and the Cheshire and Warrington combined authority population will be nearly 1 million. How does this compare with what we have already? Well, in West Yorkshire, the mayoral authority serves 2.5 million people; it is five times as large as the new Cumbria one will be and, presumably, will be offering similar services. My own council, where I am still a councillor, has a population of nearly 500,000, which is as big as the proposed Cumbria combined authority.
I will be interested to hear how the Minister expects the Government to respond to this: there will be various layers of mayoral strategic authorities, because those mayoral authorities of a very large population, in the met areas mainly—of course, we always exclude London, because it is a separate entity altogether—will inevitably become the big players. How do the Cumbrias of this world, which are not as big as unitary councils, operate in being able to deliver on transport, skills and so on? There is a question of size, which I would like some answers on.
The other challenge in setting up these strategic mayoral authorities concerns the constituent members of the authority. For Cumbria, only two unitary councils are going to come together to form the Cumbria combined authority. The way in which these are set up—there is a directly elected mayor, and the combined authority consists of a member from each constituent authority plus those who can be nominated on—means that there will be three directly elected members on that constituent authority. That seems unusual to me, let us put it like that, because associate members will not be able to vote. Can the Minister explain how that might work?
The other question I have is about the fact that, as we are discovering in the English devolution Bill, mayors will be able to appoint up to seven commissioners to fulfil the tasks. I understand that there will be many major strategic tasks to undertake, but I challenge the idea of having appointees rather than people elected to these positions. Will Cumbria, for instance, be able to appoint up to seven commissioners? Do the Government expect that to be the case? Will there be any restrictions on the number? Ditto for the associate members, particularly for Cumbria, because it is quite small. The Cheshire and Warrington authority will not be much bigger; three authorities are combining there, I think.
This model of devolution is being rushed out across England. Where such a model has existed, have the Government done any assessment of the effectiveness of that model? I live in a mayoral strategic authority. If somebody asked me, as somebody who is already democratically elected in part of it, what has been achieved, I would struggle. I am sure that some things have been achieved, but are they going to shift the dial, as they say? I do not know, but I think the Government should have some way of testing the effectiveness of it all.
When I looked at the number of folk who engaged with the consultation, I discovered that it was very few. What on earth does it mean to your everyday person on the street? Not very much, so very small numbers engage. However, roughly two-thirds of those who did engage opposed it. How was that view taken into account? If it was not—that is, if it was just dismissed because the Government have this model that they want to roll out across the country, which they are entitled to do—then do not ask people, just do it, if you are not going to take any notice of the comments they make. It seems that people were totally ignored.
I have one final question in response to the comments made by the Minister. She said that, in the constitution of these authorities, if a mayor is not present for a decision-making purpose, the deputy mayor should take their place. The deputy mayor is an appointed person—
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, there is a Division in the Chamber.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The Committee will adjourn for 10 minutes; we will then come back to the noble Baroness.
Baroness Pinnock (LD)
My Lords, I will just repeat the final comment I had to make. When the Minister referenced how the constituent authorities would be able to vote in decision-making mode, she referenced the fact that if a mayor was not able to be there, the deputy mayor could take their place and vote. Either that means the deputy mayor is an elected councillor who is nominated to be the deputy mayor in a constituent authority, or it may mean, as it does in my mayoral authority, that the deputy mayor is an appointee. I have a problem if they are an appointee, because they are not democratically accountable. Decisions should be made by people who are democratically accountable to the electorate., I would love that to be clarified. I wish I had finished before the Division, but with those remarks, I hope the Minister will be able to put me right on all the issues I have raised.
Lord Jamieson (Con)
My Lords, I first declare my interest as a councillor in Central Bedfordshire. I am grateful to the Minister for introducing these orders, which establish mayoral combined authorities for Cheshire and Warrington and for Cumbria.
As we have made clear in the discussions on the devolution Bill, we support the principle of English devolution and promoted this while we were in government. We support the creation of combined authorities where they have genuine local support, are properly funded and are designed to reflect the identities and needs of their areas. However, that support for devolution in principle does not absolve the Government of their responsibility to demonstrate that these proposals meet the statutory tests as set out in the 2009 Act, nor does it remove the need for proper scrutiny.
The question of funding remains unresolved and frankly a little bit troubling. The Government have indicated that these new authorities will receive additional funding over a 30-year period. How such long-term funding commitments will be guaranteed in practice is not clear. Can the Minister explain how the Government intend to provide genuine certainty to these combined authorities? They will need that if they are going to invest in long-term infrastructure projects, skills and transport planning. That requires predictable funding going forward. Also, as an aside, will mayors in future combined authorities receive similar levels of funding?
Linked to this is the mayoral precept. These orders enable the new mayors to levy an additional charge on council tax to fund these functions. While that power may be appropriate in some circumstances, it raises legitimate concerns about local accountability and affordability. We would welcome clarification from the Minister on the detail of central government funding expected to support local devolved functions and on to what extent the Government anticipate or indeed rely upon the use of the mayoral precept to bridge any funding gap. That also raises the question that the noble Baroness, Lady Pinnock, was moving towards of how we ensure scrutiny and holding the mayor to account.
The noble Baroness, Lady Pinnock, also raised the issue of size. Given the powers that the Secretary of State will have in the English Devolution and Community Empowerment Bill to push through potential mergers, what is the Government’s intention here?
Finally, I raise a specific concern about Cheshire and Warrington, which is the financial position of Warrington Borough Council. The estimated £1.8 billion of debt carried by the council is concerning, and it is not at all clear how the creation of a mayoral combined authority interacts with that reality. We ask for further detail: what special measures will be put in place to ensure that the debt does not undermine the financial stability of the new authority as a whole? Can the Minister assure the Committee that the creation of a combined authority will not directly or indirectly place additional burdens on neighbouring councils or local taxpayers?
Devolution done well can be transformative, but devolution done poorly risks creating new layers of governance without the trust, clarity or resources required to make them effective. We urge the Government to consider seriously the concerns raised by local communities, the scrutiny committee and this House. We will continue to support devolution that is consensual, properly funded and genuinely local, and we will continue to challenge proposals that fall short of these principles.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Pinnock, and the noble Lord, Lord Jamieson, for their comments on this statutory instrument. I will try to answer all their questions, but, as usual, I will check Hansard and make sure I have replied to the issues that they have raised.
The noble Baroness raised the issue around the differing sizes of the authorities. I appreciate the points she makes on that. Of course, she will know—as I do, since I worked extensively with my noble friend Lady Hayman of Ullock on the Levelling-up and Regeneration Bill—that Cumbria is a very sparse rural area. When the Government look at the sizes for these local authorities, we need to agree sensible devolution geographies. The Government consider the scale, the economy, the contiguity, making sure we have no devolution islands, how we are going to deal with delivery, the alignment and the identity. It is not possible to meet all the principles. We prefer these combined authorities to have a population of around 1.2 million to 1.5 million, but that is not possible in all areas. We recognise that with Cumbria. It is important that we take account of local circumstances, so we work with the authorities to make sure we find optimal solutions to their issues.
On the constituent members, they are agreed with the constituent authorities concerned. They will vary because the areas vary, but it is important that constituent members play an important role in those local authorities. We set them up as bespoke arrangements depending on local circumstances.
On the noble Baroness’s question about commissioners, we will have a system where all mayoral combined authorities can appoint up to seven commissioners. Some may choose not to do that if it is not appropriate for their area, but we want the flexibility for those who wish to do it.
The noble Baroness asked about the assessment of effectiveness. There is an ongoing evaluation programme for the devolution programme. It is important that we do that. We have a number of authorities at different levels of devolution, including some established mayoral combined authorities. We continue to look at the programme, but the evaluation so far has told us that it is genuinely delivering for the communities involved. I am sorry if the noble Baroness does not feel that that is the case in her area; there may be people who have a different view on that locally.
The noble Baroness also asked me about the public responses to the consultation process. I take her point, but the purpose of the consultations is to gather evidence and information on the effect of establishing a mayoral combined authority over the proposed geography. A range of views was provided by respondents, including evidence setting out the potential benefits, as well as some of the concerns raised, and the Government carefully considered the responses received. The results of the consultation very much formed part of the assessment made by the Secretary of State—it needed to do so because it must meet the relevant statutory tests set out in Section 110 of the Local Democracy, Economic Development and Construction Act. For both Cheshire and Warrington and Cumbria, the tests were met.
Baroness Pinnock (LD)
Before the Minister finishes, will she answer my question about the position of the deputy mayor?
Baroness Taylor of Stevenage (Lab)
My apologies; I did not write that down because we were called out of the Room. A deputy mayor is there to do exactly what it says on the tin: deputising for the mayor. The deputy mayor can deputise for the mayor. It is not an elected position, and I understand the noble Baroness’s concerns about that, but all those mayors will need a deputy, so the deputy mayor can stand in for the mayor at meetings and cast the mayor’s vote. That is the situation.
In conclusion, these instruments deliver the commitment made—
Lord Jamieson (Con)
The Minister kindly answered my question on the investment fund. The two issues I had with it included that it is 30-year funding. If you are going to come up with a programme of infrastructure funding over 10 or 15 years, you need certainty that you will get that £27 million or that £11 million every year. I know it is a difficult question to answer, but what assurance or certainty will the new mayor have that that funding will be available for those 30 years? I appreciate the intention, but is there certainty? The second part of that question was: will a similar level of funding be available for all the other combined mayoral authorities as they go forward, accepting the point that the Minister made about population?
Baroness Taylor of Stevenage (Lab)
The purpose of devolution is, of course, to get the powers and funding out to local areas to do the investment they need. I am not going to guarantee exact amounts for funding settlements that we have yet not agreed with local areas, I am sure the noble Lord will understand that, but it is the Government’s intention that all the new areas will have investment funds, and of course they also have powers to borrow. Provided they meet the prudential requirements that all local government borrowing has to meet, they will have those powers as well.
In conclusion, these instruments deliver the commitment made to Cheshire and Warrington and Cumbria to establish combined authorities in their areas, and I hope that the Committee will welcome these orders.
Cumbria Combined Authority Order 2026
(1 day, 4 hours ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Taylor of Stevenage
That the Grand Committee do consider the Cumbria Combined Authority Order 2026.
Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee
Social Security Benefits Up-rating Order 2026
(1 day, 4 hours ago)
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Baroness Sherlock
That the Grand Committee do consider the Social Security Benefits Up-rating Order 2026.
Relevant document: 49th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, in moving this order I will speak also to the draft Guaranteed Minimum Pensions Increase Order 2026. In my view, the provisions in both instruments are compatible with the European Convention on Human Rights.
I will start with the draft Social Security Benefits Up-rating Order. This instrument will increase relevant state pension rates by 4.8%, in line with the growth in average earnings in the year to May/July 2025. It will increase most other benefit rates by 3.8%, in line with the rise in the consumer prices index in the year to September 2025. As such, the uprating order commits the Government to increased expenditure of £9 billion in 2026-27, of which £6 billion will be on state pensions and pensioner benefits, £2 billion on disability and carers’ benefits and £1 billion on working-age benefits. A further £2 billion of expenditure on working-age benefits will be incurred in 2026-27 as a result of uprating decisions made under separate legal powers in the Universal Credit Act 2025, which will set new rates for universal credit and income-related employment and support allowance.
I turn to state pensions in more detail. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by the highest of the growth in earnings, prices or 2.5%. This will be 4.8% for 2026-27, in line with the conventional average earnings growth measure. As such, from April 2026, the basic state pension will increase from £176.45 a week to £184.90 a week, and the full rate of the new state pension will increase from £230.25 a week to £241.30 a week. From April, the full annual rate of the new state pension will increase by around £575, while the full annual rate of the basic state pension will increase by around £440.
Other components of people’s state pension awards, such as those previously built under earnings-related state pension schemes—including the additional state pension—will increase by 3.8% in line with the statutory minimum requirement of prices. The safety net provided by the pension credit standard minimum guarantee will increase by 4.8%. From April, it will be £238 a week for a single pensioner and £363.25 a week for a couple, ensuring that the incomes of poorest pensioners are protected.
I turn now to the support given to people below the state pension age. Most benefits will also increase by 3.8%, including statutory payments such as statutory sick pay and statutory maternity pay, and the personal allowances of income support, housing benefit, jobseeker’s allowance, and contributory employment and support allowance. This order will also increase the child amounts, carer amounts and transitional severe disability premiums in universal credit, as well as the pensioner and carer premiums in income-related employment and support allowance, by 3.8%.
The uprating order will also increase by 3.8% rates for those in England and Wales with additional disability needs and those who provide unpaid care for them. This commits the department to increased expenditure of £2 billion in 2026-27. This means that benefits such as the disability living allowance, attendance allowance, carer’s allowance and personal independence payment will rise in line with the rise in the consumer prices index in the year to September 2025.
I turn now to the Guaranteed Minimum Pensions Increase Order 2026—the GMP increase order. It sets out the amount by which the GMP part of an individual’s contracted-out occupational pension, earned between April 1988 and April 1997, must be increased when it is being paid. The increase is paid by occupational pension schemes. It provides a measure of inflation protection to people who are in receipt of GMPs earned between 1988 and 1997.
GMPs earned between April 1988 and April 1997 must, by law, be increased by the percentage increase in the general level of prices, as measured the previous September, which is capped at 3%. The September 2025 figure was 3.8%. Because of the cap, the increase for the 2026-27 financial year will therefore be 3%. Having the 3% cap gives schemes more certainty. It allows schemes to forecast their future liabilities better, which is clearly important when trustees are considering the scheme’s funding requirements. The GMP indexation requirements strike a balance between protecting members against the effects of inflation and not increasing scheme costs beyond a level that both schemes and sponsoring employers can reasonably afford.
In summary, the draft Social Security Benefits Up-rating Order implements the Government’s commitment to the triple lock, provides for a real-terms increase in the value of the safety net in pension credit, increases the rates of benefits for those in the labour market, and increases the rates of both carers’ benefits and benefits to help with additional costs arising from disability or health conditions. The draft Guaranteed Minimum Pensions Increase Order requires formerly contracted-out occupational pension schemes to pay an increase of 3% on GMPs in payment earned between April 1988 and April 1997. This provides people with a measure of protection against inflation, paid for by their scheme. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I thank my noble friend the Minister for introducing the uprating order so clearly, and I welcome the opportunity to discuss the social security that it provides. It is a shame that it is tucked away in Grand Committee, with only a few dogged noble Lords present, given how important social security is to our society. As the impact assessment for the removal of the two-child limit Bill notes:
“Social security is the Government’s most direct lever”
to reduce child poverty, including the shockingly high level of deep poverty. To quote the recent Joseph Rountree Foundation report:
“Our social security system is one of the surest routes to tackling poverty and destitution that the government has at its disposal”—
so that a well-resourced and effective social security system is
“the bedrock of a strong society”.
At present, after a decade or so of cuts, our social security system is neither sufficiently well-resourced nor effective, but we are starting to turn the tide. Should anyone complain that doing so will contribute to the so-called ballooning welfare bill, I point out that spending on working-age social security is projected to flatline as a share of GDP over this Parliament. Although it is not part of the uprating, we cannot ignore the significant impact that the very welcome abolition of the “vicious”—to quote the noble Lord, Lord Freud —two-child limit will have on the numbers of children in poverty and on the depths of the poverty experienced by those who will remain below the poverty line.
I use this opportunity to ask the spokesperson for the Opposition, who is a decent lady, to dissociate the Opposition from the xenophobic Reform-echoing message of the Oral Question on this asked by one of their Back-Benchers last week, with its pejorative reference to foreign-born children receiving benefits, which I know disturbed a number of noble Lords across the House.
A particularly welcome aspect of the uprating itself, which I admit I did not realise until yesterday would be legislated for separately in a negative instrument just laid, mentioned by my noble friend, is the real increase in the value of the standard universal credit allowance, which will be repeated for the rest of this Parliament. I hope noble Lords will indulge me if I mention it now, given that we do not know whether or when the negative instrument will be debated. The uprating has to be understood in the context of the eight out of the 10 upratings between 2013-14 and 2022-23 that produced a reduction in its real value, leaving the basic level of support at a 40-year low, according to the JRF. A companion evidence pack of the child poverty strategy spells out how these cuts mean that basic benefit levels are worth “significantly less” than how the last Labour Government left them.
Nevertheless, as the Government themselves acknowledge, the real increase is only modest, especially when we bear in mind the differential inflation rate, which has hurt those on low incomes in recent years. The impact of this was emphasised at a Resolution Foundation conference on “Unsung Britain” this morning. There is a long way to go if universal credit is adequately to protect recipients against poverty and hardship. What this means was brought home to some of us by Jo, a member of Changing Realities, who spoke at a meeting here last autumn. She said:
“We are often exhausted parents trying hard to hide from our kids the mental gymnastics of managing tiny budgets in a big-cost world”.
She said that the effects are “immense and enduring”.
The JRF and Trussell, and also previously the then APPG on Poverty, of which I am co-chair, have recommended the establishment of an independent body to advise Governments on the benefit levels needed to meet essentials, as benefit levels have never been based on recipients’ actual needs. Of course, it would be for the Government and Parliament to decide on the actual levels, but they would do so on the basis of empirical evidence. Is this something my noble friend might take back for consideration? The need for benefit levels to reflect actual needs brings me to some buts—my noble friend the Minister knows me too well to think there would not be any.
First and perhaps foremost is the fact that retention of the overall benefit cap means that about one in 12 children who escape the frying pan of the two-child limit will be no better off, because they will be burned by the fire of the cap. Although the cap affects only a relatively small number, it is a key driver of deep poverty. According to the impact assessment for the removal of the two-child benefit limit Bill, 20,000 more households will be capped as a result.
One way that this effect could at least be mitigated would be if the threshold limits were uprated annually, in line with the UC standard allowance. As it is, they have only been uprated once since 2016, when they were cut. A Written Answer to me spelled out the effect on the threshold’s value: those for couples or lone parents would now be increased by £4,702—or £5,409 in Greater London—a year, had they been uprated in line with the UC standard allowance since 2016.
Secondly, it is disappointing that the local housing allowance freeze is being continued. IFS has criticised this approach to LHA as incoherent policy design. As the JRF has shown, one consequence is that four in 10 private renters in poverty are so only after housing costs are factored in, more than any other tenure group. Given that housing costs are identified as a key driver of poverty, there is no justification for a Government committed to reducing poverty and homelessness continuing the LHA freeze.
Although the PIP cuts were thankfully withdrawn, some cuts are still affecting those claiming social security for health or disability reasons. The health element of UC will be halved for new recipients from April. Although not yet confirmed, the proposal to replace the contributory new-style JSA and ESA with a new unemployment insurance scheme, while certainly improving the situation of the newly unemployed, would mean a new time limit after six or 12 months for those who currently qualify indefinitely for new-style ESA. This could have particularly serious implications for the autonomy and security of affected women in couples, for whom the new-style ESA represents an important source of income in their own right. Can my noble friend update us on the thinking on this, as there have been rather contradictory reports in the media?
Returning to child poverty, the latest projections produced by the DWP suggest that, despite the welcome reduction of half a million children in poverty as a result of the abolition of the two-child limit, the largest reduction in a single Parliament since records began, there will still be around four million children—29% of all children—in poverty at the end of this Parliament. This depressing fact is a measure of how dire the situation inherited from the previous Government was.
However, it must also act as a spur for further action now, including the setting of targets and milestones in the baseline report promised for this summer, and a prioritisation of further action to improve social security in future Budgets. The child poverty strategy document itself described it as just
“the first step on our road to ending child poverty”.
Who better to quote than the Chancellor of the Exchequer, who, while expressing her pride in abolishing the two-child limit, last week wrote:
“I know that our work cannot stop here. We must keep building a country where every child has a fair start in life and where every parent is treated with dignity, respect, and the support they deserve”.
We still have some way to go before that country is built.
Lord Davies of Brixton (Lab)
I thank my noble friend the Minister for presenting the regulations. I will make a brief grouse that one of the sets of regulations we are debating was not on the table, and it was not even in the Royal Gallery. I know it is only three pages, but it should have been there, so I hope some action will be taken to make sure that it does not become a habit.
I have a couple of questions for my noble friend the Minister. One of the things that annoys me about current debates on pensions is when people fail to clarify or acknowledge that the triple lock applies only to part of the state pension.
Although the basic pension, or the new state pension, has increased by 4.8%, almost all of the rest of the other elements that go towards the total amount that people receive is being increased by 3.8%, so the average increase across the board will be somewhere between 3.8% and 4.8%. I feel it particularly personally because my own state pension will be going up by 4.2%; those of you who are any good at algebra will be able to work out what my state pension is from that simple fact. My question for my noble friend the Minister is: what is the average increase in the state pension across the board for all recipients? It is certainly not 4.8%, and it will not be 3.8%. It will be somewhere in the middle. I have not given notification of this question, so I would be quite happy to receive an answer in writing, but it is a very relevant figure that we should make sure people understand.
My second question arises from the accompanying document: the report from the Government Actuary on the uprating. On page 16 of the report, there are projections for the fund up to 2030-31. We see here that the balance in the fund at the end of the year is increasing from £89.6 billion in the current year and more than doubles over a period of five years to £163.7 billion. This is a relevant figure when we are told that state pensions are too expensive and at a time when the fund from which those pensions are paid is building up increasing balances.
Another relevant comparison is that, in the coming year, the balance at the end of the year as a percentage of benefit payments is 59% and, by the end of this five-year period, will have increased to 89%. This compares with the expectation—or a sort of target, though not a statutory target—that the balance should more typically be something like 17%. We are building up very substantial balances in the National Insurance Fund. Many people nowadays do not take the National Insurance Fund seriously at all, but I believe that it is a real fund; it is accounted for separately. I really want to know this: do the Government have a long-term plan for the balance to be held in the National Insurance Fund?
This has arisen, of course, because successive Governments have come to regard national insurance contributions as simply a way of raising additional revenue; I have made this point when we have discussed contribution rates in the past. This is the only figure we get that actually shows how contributions are affecting the National Insurance Fund. The Government need to explain it in a bit more detail to us again. I would be interested in what my noble friend the Minister says initially, but, again, a written explanation of the Government’s policy in relation to the size of the balance in the National Insurance Fund would be a relevant factor to take into account when discussing the affordability of national insurance benefits.
Baroness Stedman-Scott (Con)
My Lords, I thank the Minister for introducing these orders in her usual detail. I will speak to both: the draft Social Security Benefits Up-rating Order 2026 and the draft Guaranteed Minimum Pensions Increase Order 2026. Although they are being debated together today, they are fundamentally different instruments raising distinct policy issues. It is therefore right that they are addressed separately, so I will begin with the draft Guaranteed Minimum Pensions Increase Order.
Lord Davies of Brixton (Lab)
This is neither the opportunity nor the time to have a debate on the Pensions Act 2011, but the cap on GMPs was limited to 3% because the state took over the responsibility for paying increases on private pensions in excess of 3%. However, under the coalition Government’s legislation amending pensions, those increases were, in effect, lost. The noble Baroness expresses surprise, but we have to go back to the legislation introducing the new state pension, which was introduced by the coalition Government. In doing so, they took away the state’s obligation to pay increases in excess of 3%, so any obligation to pay anything more than 3% is solely on the state, not the employer. It would not be appropriate to suggest that the employer should pay increases over the 3% level because it was the state’s responsibility, but the coalition Government took it away.
Baroness Stedman-Scott (Con)
I appreciate the noble Lord’s intervention. I will read Hansard. We will write to the noble Lord and start some correspondence on that issue. I appreciate the points made by the noble Lord. Everybody knows that he knows what he is talking about and that he is well versed in pensions legislation. If he is happy for me to do so, I will pick that point up with my colleagues.
I turn to the draft Social Security Benefits Up-rating Order 2026. The shadow Secretary of State for Work and Pensions, Helen Whately, has rightly led calls for the Government to move more quickly and clearly in setting out their plans for welfare reform. Sickness and disability benefits alone are forecast to cost the taxpayer £100 billion by 2030. The shadow work and pensions team has consistently argued that the Government are failing to confront the structural drivers behind rising welfare expenditure. Delays in doing so carry a cost not only to the public finances but in missed opportunities to redirect spending towards other pressing government priorities.
It is extraordinary that the Timms review has only just agreed the names of the committee members appointed for a review that Stephen Timms is leading into sickness benefits, including with group members representing the disabled. The work has not yet begun. It is nearly two years after the general election, so can the Minister confirm that his committee is on track to give an interim review this spring? Can she also confirm that it will indeed be 2027 before his committee reports and that, by then, no progress will have been made in this Parliament, allowing for likely legislation following a government response?
These concerns sit alongside the wider economic impact of Labour’s jobs tax. The Autumn Budget 2024, in particular the increase in employer national insurance contributions, has been associated with the loss of an estimated 50,000 full-time equivalent jobs. This has implications for not only employment levels but the long-term health of the National Insurance Fund. The difficulty with this draft order is one not purely of substance but of process. The instrument uprates pensions and working-age benefits together, leaving no scope to consider the appropriateness of each element independently or to debate the Government’s policy intentions for each in detail.
Rather than dwell further on the procedural constraint, it is worth noting that the issues raised by this uprating instrument sit alongside the Government’s announcement yesterday on universal credit reform and the legislation now laid before Parliament. Taken together, they speak to the direction of travel in welfare policy and the assumptions underpinning the current uplift. The Government argue that these reforms are intended to rebalance the benefits system, to address perverse incentives and to support more people into work. We are told that the current gap between health-related universal credit payments and the standard allowance discourages labour market participation, and that narrowing this gap for new claimants is necessary to restore fairness and sustainability.
I therefore have a number of questions for the Minister. First, what assessment has been made of the behavioural impact of introducing a significantly lower health element for new claimants? Secondly, although existing claimants and those with severe or lifelong conditions are protected, how confident are the Government that the criteria used to determine severity are sufficiently robust, consistent and fair across the system? Thirdly, the Government have announced £3.5 billion in employment support alongside the expansion of pathways to work advisers. How will success be measured? Will outcomes be judged by sustained employment, earnings progression or reductions in case loads, and over what period?
Finally, the Government expect these reforms to deliver savings of £950 million by 2030-31. Do those projections assume stable labour market conditions? What sensitivity analysis has been undertaken should employer demand weaken further? I hope that the Minister sees the link and will be happy to answer these questions.
Baroness Sherlock (Lab)
My Lords, I shall get through as many points as I can, and if I cannot, I will check Hansard and write to noble Lords. I am delighted to find that writing to members of the Committee is now a bipartisan activity, rather than just on the government side, so it is all very interesting.
I will start with the overall critique from the noble Baroness, Lady Stedman-Scott. As she said, this is what the shadow social security team throw at the Government on a regular basis: that they are not doing enough to bring down welfare spending, and that everything is terrible. I start by saying that the system the Opposition critique is of course a system that we inherited from them. All the things we are often told are wrong with it are things that were entirely in the gift of the previous Government. They did not address any of those problems. The only attempts they made were struck down by the High Court for being illegal, whereas this Government have actually taken action.
As the noble Baroness alluded to, we have already taken action to make the health and disability system more sustainable by rebalancing rates of universal credit from this April to tackle some of those inappropriate incentives in it. Our investment in pathways to work will help many more people with health conditions back into meaningful work. We have started the Timms review to make sure that we find a sustainable way forward. On timing, I can say to the noble Baroness that we anticipate that the review will report in autumn of this year. I have no reason to believe that it is not on track to do that.
I will come on to some of the critique from the other side. Noble Lords have said that we are either not doing enough to reduce social security spending or not doing enough to increase it, so let me try and lean in the other direction to be balanced. My noble friend Lady Lister is absolutely right: we are in Grand Committee, and many of us have been in Grand Committee on a regular basis—annually—to do this. Some of us have moved positions from one side to the other, but now we are here. This point is that this debate is heard, it goes on the record, and I always look very carefully, whether in government or opposition, at the comments made by noble Lords. I am grateful for them; it is a debate well worth having.
I understand the point my noble friend is making about the adequacy of benefits, but from April, this Government are delivering the first ever sustained above-inflation rise in the basic rate of universal credit since it was introduced. Just under 4 million households will benefit overall from that change, which is estimated to be worth £760 a year by 2029-30 in cash terms for a single parent aged 25 or over, or around £250 above inflation. We have also done other things. We introduced the fair repayment rate from April last year, reducing overall universal credit deductions from 25% to 15%, which again benefited approximately 1.2 million of the poorest households. I respect my noble friend for constantly pushing us to go further, but I put on record that the Government have done something significant, and I thank her for acknowledging this.
In terms of the rebalancing, my noble friend Lady Lister is right that, unusually this year, the personal allowance rates of universal credit are not covered by these because the Universal Credit Act, which did the rebalancing, took them out for the relevant period. They will therefore be made by regulations but when we discussed the primary legislation, the Universal Credit Bill, the formula was made really clear. The only reason the numbers were not in there is because they relate to CPI, so the actual numbers depend on what CPI turned out to be. The percentage relationship to CPI was made clear and there was the opportunity to debate that in the Bill. Hopefully, that reassures her on that front.
I understand my noble friend’s concerns on the local housing allowance point, but we have to step quite carefully in this area. DWP currently supports renters by spending around £34 billion a year on housing support for low-income renters, including £12 billion in the private rented sector. The April 2024 one-year LHA increase cost an extra £1.2 billion in 2024-25. It will be approximately £7 billion over the next five years. This is an area where the changes cost a lot of money. We know that LHA rates will not meet all rents in all areas, but it has always been acknowledged that they would never be able to do that.
This Government are trying to address the underlying problems driving some of these issues by prioritising the fundamental issue of the lack of housing supply, through the £39 billion investment in the social and affordable homes programme, which is still the biggest boost to social and affordable housing in a generation. For those who need additional support and have a shortfall to meet their rent costs, our new crisis and resilience fund replaces discretionary housing payments in the household support fund from this April, supported by £1 billion a year, including Barnett impact, through the spending review period. Importantly, we have been able to give a multi-year reassurance to local authorities that the money is coming through.
On the benefit cap, I know that my noble friend will never be a fan of it, and I understand her concerns, but this Government believe that entering or returning to employment is best for individuals and the economy; we have taken significant steps to help them do so. The benefit cap encourages personal responsibility while maintaining a strong safety net. On uprating, this has to be reviewed every five years, and 2027 is the next time it will definitely have to be done. It is up to the Secretary of State when it is reviewed, and that is the latest it can be.
Lord Davies of Brixton (Lab)
If it helps my noble friend, I will put down some Written Questions to deal with this question. I probably should have done that in the past.
Baroness Sherlock (Lab)
If all my noble friend wants to know is what he has asked me, I can write to him—this would save him the trouble of writing and save me the trouble of writing back to him—but, obviously, he is always entitled to do that.
Finally, the National Insurance Fund is financed on a collective basis, with receipts collected in one year used to pay for certain benefit payments, including the state pension, paid out in the same year. I need to make it clear that, obviously, it is not accurate to suggest that there is a surplus in the fund that can be drawn on. The balance of the National Insurance Fund is managed as part of the Government’s overall management of public finances and reduces the need for them to borrow from elsewhere. Any additional spending from the National Insurance Fund would represent an increase in overall government spending. Without cuts in other areas of spend or additional taxes, it would therefore lead to an increase in government borrowing.
I think I have answered most of the questions asked by noble Lords. The noble Baroness asked some specific questions about metrics. I am not sure that I have an answer to hand; if I have anything, I will certainly write to her. I am grateful, once again, for what is always an interesting debate. I love the fact that this Committee takes these matters so seriously; they truly affect the lives of so many people. I am grateful to noble Lords for their time and expertise.
Guaranteed Minimum Pensions Increase Order 2026
(1 day, 4 hours ago)
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Baroness Sherlock
That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2026.
House of Lords
Introduction: Lord Nagaraju
Introduction: Lord Redwood
Under-16s Energy Drinks Ban
(1 day, 4 hours ago)
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Baroness Walmsley
To ask His Majesty’s Government when they expect to publish a timeline for legislation banning the sale of energy drinks to under-16s.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron)
My Lords, we are taking decisive action on obesity, easing the strain on our NHS and creating the healthiest generation of children ever. As part of this, we will fulfil our commitment to ban the sale of high-caffeine energy drinks to children aged under 16, introducing the ban within this Parliament. Our consultation has closed. We are analysing the responses and will set out further information on our timelines in due course.
Baroness Walmsley (LD)
My Lords, the Government promised to ban the sale of energy drinks in this Session. The consultation has ended but we have not seen the results yet. When will the responses be published and when will the Government publish the regulations? Will the ban extend to all under-18s and all retailers, including vending machines and schools? There is still time to pass the regulations before Prorogation. Will the Government get on with it? Otherwise, it will be a promise made but a promise broken.
Baroness Merron (Lab)
I hear the noble Baroness’s counsel but, as I said, we have committed to introduce the ban within this Parliament, as the Secretary of State said. He also said ideally sooner, if possible. I can confirm that all sellers, retailers and businesses of all sizes in England, including in-store and online sales, should be in scope of the ban.
Lord John of Southwark (Lab)
My Lords, in addition to the harms of energy drinks, the 156 cans of fizzy drink that the average child consumes in the UK each year can and do contribute to higher rates of childhood obesity and dental problems. With that in mind, will my noble friend the Minister commend the work of —would you believe—Southwark Council, which introduced the Fizz Free February public health programme in 2018, which has now been taken up in 25 other areas and aims to significantly reduce the consumption of fizzy drinks among children and young adults? Will she also explore ways in which Fizz Free February can be supported and introduced more widely across the country?
Baroness Merron (Lab)
I am very pleased to commend this initiative by Southwark Council. It was developed by the council’s public health team and is a good example of what local action can do. My noble friend talked about the extension of this initiative across the country. I very much support that. What struck me, having looked online at Fizz Free February, was the importance of the information that reminded us that more five to nine year-olds are hospitalised due to issues with their teeth than anything else. That is a very sobering thought.
Lord Ahmad of Wimbledon (Con)
My Lords, I declare an interest: my wife and I have constant battles with our children over the downsides of energy drinks and caffeine. Energy drinks can lead to type 1 diabetes. What processes and programmes are being undertaken to ensure that schools, in particular high schools, are part of this process in educating students? Once they are out of the door it is very much a decision that they make themselves. I also support the noble Baroness, Lady Walmsley, in that every outlet should be part of this regulation.
Baroness Merron (Lab)
I agree on that last point, not least because that makes a level playing field, but it is also the right thing if we are to make that ban. The noble Lord describes a battle that I am sure goes on in many households. Schools are crucial. The incentive for schools is that children and young people will be much better placed to learn. One of the most disturbing things about this, and a message which we need to continue to get across, is that more headaches, difficulty with concentration and greater anxiety are all potential consequences of energy drinks. We work very closely with schools to ensure that the message gets through.
Baroness Winterton of Doncaster (Lab)
My Lords, one of the real successes of the previous Labour Government’s Sure Start programme was teaching families about healthy diet and how to prevent obesity. Can my noble friend the Minister assure me that the new family hubs will take an equally robust approach?
Baroness Merron (Lab)
I can certainly confirm that to my noble friend. The new Best Start in Life hubs will take the best from previous programmes, including Sure Start. We are providing information through an online service that has had 4.5 million hits so far, and we are working closely with the Department for Education on that. But yes, we will be taking the best of Sure Start.
Lord Kamall (Con)
My Lords, when a Government restrict the sale of products to some but not all customers for whatever reason, it is essential to pre-empt the effects on businesses that will be at the sharp end of enforcing this ban, especially corner shops and small retailers. What engagement have the Government had with small retailers, especially small corner shops, some of which do not always feel represented by the Association of Convenience Stores, to understand their concerns over violence or abuse when they ask for ID from customers who may appear to be underage?
Baroness Merron (Lab)
As we discussed on the Tobacco and Vapes Bill in this Chamber, the whole issue of age verification is crucial. I feel that businesses are used to seeking age verification. What matters is that they feel empowered to ask for it and that staff are trained. That is why we are indeed working with businesses in the way the noble Lord says. Many of them responded to the consultation and we are very pleased to have their voice in that.
Lord Hampton (CB)
My Lords, does the Minister agree with me—working, as I do, with children as a teacher—that there is a certain irony in banning sports drinks for sale to children yet allowing those drinks to sponsor sports teams?
Baroness Merron (Lab)
I understand the noble Lord’s point. We are focusing on those energy drinks that contain 150 milligrams of caffeine per litre as the way of making the greatest impact to children aged under 16. When I think that over 100,000 children aged 11 to 15 consume at least one high caffeine energy drink per day, I believe that that is the right thing to do, as some of those drinks are equivalent to four cans of Coke or two espresso shots. That is how seriously we need to take this. I hear his point about going further, but it is important that we focus on the absolute immediate.
Baroness Manzoor (Con)
The Government introduced voluntary guidelines for manufacturers to reduce salt and sugar in baby food and milk food products for ages up to 36 months. How has that gone? Will they introduce statutory guidelines after the first 18 months? Have companies complied with the guidelines?
Baroness Merron (Lab)
We were glad to introduce the voluntary measures. To be proportionate and evidence-based, they will in the first instance be voluntary. We will review along the way how we are getting on and whether there is a need for statutory action, as the noble Baroness asks.
Baroness Bull (CB)
My Lords, the noble Baroness’s Answer referred to obesity. There is a risk of obesity from these high-sugar drinks, but caffeine is perhaps the bigger danger, particularly for smaller bodies, which cannot deal with the excessive caffeine. Are the Government monitoring the use of caffeine pouches that are now available, which are inserted between the gum and the lip to give a hit of caffeine, which can be dangerous for young people?
Baroness Merron (Lab)
I actually do not know the answer to that, so I cannot confirm it is the case, but I will certainly look into it. I take the noble Baroness’s point about caffeine. That is the problem here, but it is also right that we consider sugar intake.
Lord McColl of Dulwich (Con)
My Lords, is the Minister aware that combating the obesity epidemic has been seriously impaired by a number of pseudo- scientists who have put forward the idea that obesity is inevitable and that we cannot do anything about it, so it must be government that does something about it? Does the Minister agree that there is only one cause of obesity and that is eating too much?
Baroness Merron (Lab)
The noble Lord always tempts me to agree with him. The causes of obesity are complex and include what people eat, how much they eat and who they are. It is the reason that the Government have taken on the responsibilities they can, such as restricting junk food advertising on TV and online, giving local councils stronger powers to block new fast food outlets, and announcing changes to the soft drinks industry levy. All these support people in making better choices.
Better Start Longitudinal Programmes
(1 day, 4 hours ago)
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Baroness Thornton
To ask His Majesty’s Government whether, and if so when and how, the learning from the results of the Better Start longitudinal programmes will become pregnancy and early years policy and be implemented.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we welcome the valuable learning that is emerging from the five Better Start partnerships and we look forward to the national evaluation report in the spring. The programmes provide important insights into early-years support in highly disadvantaged areas. Best Start Family Hubs and Healthy Babies already deliver a place-based prevention focus model. We will consider Best Start evidence, alongside other evaluations, as we develop policy to deliver a new neighbourhood health service and raise the healthiest generation of children ever.
Baroness Thornton (Lab)
I thank the Minister for that and declare an interest: my sister, Gill Thornton, is the director of Better Start Bradford, which is part of the £250 million programme funded by the National Lottery, with local funding too, for the last 10 years. The model, which places children and family at the heart of service design, focuses on the first 1,001 days, which is critical because of the developmental window from conception to a child’s second birthday. I would like to hear how the Government will integrate this into their Best Start for Life programme.
Baroness Merron (Lab)
The work in Bradford is to be commended. I can assure my noble friend that, through Best Start Family Hubs and Healthy Babies, local authorities will be expected to do exactly what the noble Baroness says is happening in Bradford: that is, to establish very inclusive and diverse routes for parent and carer participation. We want families to shape how services are set out and I absolutely agree that the first 1,001 days of a child’s life is a crucial and critical developmental window.
Lord Russell of Liverpool (CB)
My Lords, the Minister may not have had the time that I have had to read the first report from this programme, which is called Exploring School Readiness. These projects have been going in five different areas, with 16 different programmes. In going through all 16 programmes, does she share with me the slight concern that there is only one mention of mobile phones and screen time? That was in Nottingham, where adults were asked to leave their mobile phones outside an area where their children were learning how to play, in order that the adults could concentrate and pay attention to their children, rather than pay attention to their phones. Given the rising concern generally in the country about the effect of screens and phones, not only on the very young but on the ability of parents to be parents, could that not be integrated and taken into account as this programme is taken forward?
Baroness Merron (Lab)
It is an important point that the noble Lord raises. This is being dealt with by the Government’s proposal to have a three-month consultation, so that we get it right in terms of acknowledging the concerns and challenges of screen time for children. So, I take the point that the noble Lord has made. This is of course a matter for DSIT. I will ensure that it is aware of the noble Lord’s comments, as well as the relevant departments—my department and the Department for Education—in respect of the programme that we are talking about.
Baroness Walmsley (LD)
My Lords, while I welcome today’s announcement about protecting special educational needs funding, I would like to ask about support for very young children with special needs and those with physical disabilities. Parents often find it difficult to find an early-years place or childcare suitable for these special children. Can the Minister point them towards any real, properly funded, properly resourced help from people with the right training looking after these special children?
Baroness Merron (Lab)
I hope I can be helpful to the noble Baroness. In the Best Start for Life strategy, we committed that each Best Start Family Hub will have a children and family services practitioner to support children and families who have additional needs. I feel that this new offer will help parents to understand their child’s development and identify emerging needs sooner. Importantly, it will also support vital join-up across the services, keeping children who have particular needs at the very centre.
Baroness Rafferty (Lab)
My Lords, would my noble friend the Minister confirm what the Department of Health and Social Care has taken from the Better Start work to inform its maternity and baby strategy?
Baroness Merron (Lab)
As my noble friend knows, we are absolutely focused on improving quality and consistency of care for women throughout pregnancy, birth and the critical months that follow. That is why we have appointed the noble Baroness, Lady Amos, to lead an independent investigation and why the Secretary of State will chair a maternity and neonatal taskforce to address the recommendations of the investigation. It is very much part of our work to give babies the very best start in life.
Baroness Deech (CB)
My Lords, the Minister has expressed the commendable ambition of raising the healthiest generation of young children ever. So why have the Government done nothing to condemn and educate about, if not prohibit, cousin marriage, the babies from which suffer twice the number of birth defects as those from non-cousin marriage?
Baroness Merron (Lab)
My recollection from debating that point previously is that we are looking at the evidence and the best way to tackle the issue that the noble Baroness raises: in other words, what best supports children to have that healthy and best start in life? We are looking at this in the round and I am sure that we will return to it, but I will also be pleased to follow up in writing to the noble Baroness.
Lord Kamall (Con)
My Lords, many noble Lords would support the objectives of the Better Start longitudinal programme, with its focus on improving children’s diet and nutrition, social and emotional development, and speech, language and communication skills. But can the Minister explain how, rather than with a top-down, Whitehall or Westminster-knows-best attitude, it is working with local civil society organisations, such as BRITE Box, which works with families and local communities to help them learn how to cook healthier meals on a budget to improve their nutrition and well-being?
Baroness Merron (Lab)
This will not be a top-down approach. We are ensuring that Best Start Family Hubs and Healthy Babies are in every local authority area. That is a major development, because from April it will reach more than 500,000 more children. It will also help us transition to neighbourhood health services. However, all of this will, as ever, be more successful by working together with other groups, including third-sector organisations such as BRITE Box.
Lord Watts (Lab)
My Lords, does the Minister agree with me that we would have had much healthier children if the previous Government had not shut down all the Sure Start centres and caused the poverty that they did?
Baroness Merron (Lab)
I think I heard what my noble friend said: I got the gist. What matters is not just that we are in a position where children’s health and well-being is not where it should be but that we are pulling together all the best examples of practice, including Sure Start and family hubs, and investing in provision, services and information. This will take us forward to a situation where we genuinely have the healthiest generation ever. That is not something we have now, particularly in the more disadvantaged areas.
Baroness Manzoor (Con)
My Lords, I am sorry if I sound like a broken record, but what are the Government doing to ensure that we retain the health visitors and midwives that we have? There are not sufficient midwives or health visitors in the service and they play a vital role in supporting young mothers and fathers in the care of their babies and children.
Baroness Merron (Lab)
They do: I completely agree. That is why they are very much part of our delivery plan. It is part of the move from hospital to community: part of the neighbourhood service model. We will be publishing the workforce plan in the spring; that will take account of it. This is a multidisciplinary approach. We are seeing more midwives. We are also seeing more consultants in obstetrics, for example, although I know that the noble Baroness was not referring particularly to that. We are also developing stronger health visitor teams. They all matter, because they bring the care closer to home in a way that will make the greatest impact.
Government Website: Registering a Death
(1 day, 4 hours ago)
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Baroness Brinton
To ask His Majesty’s Government whether they intend to update the Government website page on registering a death, specifically the requirement to do so within five days.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
The five-day timeframe in England and Wales to register a death starts once the medical examiner has sent the medical certificate of cause of death to the registrar. While the guidance provided on GOV.UK is up to date, the General Register Office for England and Wales will continue to work with relevant departments to ensure that this information best supports the bereaved. Civil registration is a devolved matter in Scotland and Northern Ireland.
Baroness Brinton (LD)
My Lords, recently, it took nine days to register my sister’s death, instead of the five stated on the website. The medical examiner’s office and the registrar both told me that, every day, bereaved families are confused and distressed, as they believe that they are breaking the law because they think it is death that triggers the five-day clock and not the medical examiner signing the papers off. The noble Baroness, Lady Hollins, told me that her medical examiner was taking up to a month to do this and that there were further delays in registering the death. Will the Government update the website, adding the certifying hospital doctor—the first step that the public encounter—ahead of the medical examiner’s role, to clarify the timeline? Will the Government review the five-day rule in the light of delays in some ME and registrar services?
Lord Hanson of Flint (Lab)
I offer my condolences to the noble Baroness on her loss. She has a point. I have discussed this with officials and we are looking at how we can improve the website and make some changes to it. That will be done, and I will write to the noble Baroness within a month, when it has been completed.
Lord Young of Cookham (Con)
My Lords, has the Minister seen the article in last week’s Times:
“Death certificates take twice as long after reforms choke system”,
with only one in six being delivered within a fortnight, adding to the costs for the funeral director and to the distress of relatives? What action are the Government taking to deal with that delay?
Lord Hanson of Flint (Lab)
There are two points here. The median figure that we have assessed for the issues that the noble Lord has raised is nine days. The published data does not break down the journey between the medical certificate of death and the registration of death. From the Home Office’s perspective, the registration process is more or less on target at the five-day period. Where there is a delay on occasions, it is between death occurring and the medical examiner’s certificate being issued. I will be drawing that issue to the attention of my noble friend Lady Merron, as it is a Department of Health matter. Again, the Government are committed to trying to resolve and improve performance on this.
Viscount Stansgate (Lab)
My Lords, on 3 April last year, from the Dispatch Box in this Chamber, my noble friend Lady Merron said:
“We are taking steps to reduce the time to register a death”.—[Official Report, 3/4/25; col. 361.]
Can my noble friend the Minister tell us what progress is being made?
Lord Hanson of Flint (Lab)
As I said, nine days is the median. I confess to the House that death certificates are not my specialist subject, but I will do my best to investigate whether there are any delays and will write to my noble friend.
Lord Ravensdale (CB)
My Lords, sudden unexplained death in childhood is a tragedy that affects around 40 children per year in the UK, but there are cases where, in the event of a child’s death, parents are waiting more than a year to find out what happened. As if the pain of losing the child was not bad enough, they then have to wait more than a year to get closure. This is all due to a shortage of paediatric pathologists in the system. Can the Minister say what plans the Government have to address this situation?
Lord Hanson of Flint (Lab)
Self-evidently that level of delay is not acceptable and should not exist. The Home Office’s responsibility in this area is for the period after the medical examiner has issued the certificate and the death certificate has been given to the registrar. That is the five-day period which we are broadly maintaining. The issues which the noble Lord has raised about paediatric support and assessments are for the Department of Health. I note what he has said and will investigate the issue and write to him. That is not an area that I am overly familiar with because it is not within my direct competence.
Lord Mohammed of Tinsley (LD)
My Lords, certain minority faith groups, particularly the Jewish and Muslim communities, have to bury the deceased in their families as soon as possible. In Sheffield, we worked up a system where we have registrars on call to issue paperwork at weekends, but the bottleneck comes from waiting for the medical examiner to deal with it. Can the Minister speak to the group of people from Sheffield and elsewhere who are struggling with this issue and see how, across departments, we can look at opening up opportunities to bury the deceased quickly? The grave is ready and the council is ready to issue the burial certificate, but the medical examiner is causing the trouble for many families. This is not just a Sheffield issue; it is up and down the country.
Lord Hanson of Flint (Lab)
I am sympathetic to what the noble Lord has said. My colleague and noble friend Lady Merron has said that the Department of Health, particularly in an English context, is working sympathetically with the communities that the noble Lord has mentioned. I will reflect on what he has said. It is a strange situation whereby the Home Office has responsibility for some of the issues that the noble Baroness, Lady Brinton, has raised—and I am seeking to address those and will change the system—but the issues that the noble Lord is raising are with a different department. However, my noble friend Lady Merron has heard these points and we will look at the question sympathetically.
Lord Spellar (Lab)
My Lords, following exactly on from that question, is not the most sensible approach to look at those areas where coroners are operating efficiently and at speed, to learn from those best practices, and then to extend it to the rest of the country? It is a straightforward business proposition. Is that not that what the Government should be doing?
Lord Hanson of Flint (Lab)
The answer to that question is yes. The bit that the Home Office is responsible for has a five-day target, which is being met. There are challenges in the medical examination aspect for a range of reasons, which are not just administrative but related to how, when, where and in what circumstances people have died. There may be issues that we can look at. My noble friend makes some important points and after Question Time I will discuss with my noble friend Lady Merron how best we can address those.
Lord Hunt of Kings Heath (Lab)
My Lords, it is worth remembering that medical examiners were introduced following the Harold Shipman disaster and they are there to provide public safeguards. But there is evidence that medical examiners are being somewhat risk-averse and that deaths which have occurred quite naturally are being held up. Perhaps in his discussions with my noble friend, it is time for the Minister to take an initial look at what medical examiners are doing to see whether there can be some changes to speed up the death certification process.
Lord Hanson of Flint (Lab)
The issue is under constant review. Work continues towards the introduction of electronic registration of deaths in England and Wales to minimise the burden on bereaved family members at a difficult time. As my noble friend has said, this system was introduced for perfectly legitimate reasons to improve safeguards. We need to make sure it works well. I have tried, in response to the Question by the noble Baroness, Lady Brinton, to make improvements in the areas I am directly responsible for, and I will reflect with my noble friend on other issues.
Lord Mackinlay of Richborough (Con)
My Lords, perhaps I could bring to the House my recent experience. My father passed away on 21 December, which is, dare I say, a challenging time of year, given that the nation stops work for about two weeks. I was not able to register the death until 8 January, but, considering the time of year, I have to say that the medical examiner’s office was working throughout the Christmas period and I was able to get an appointment in reasonable time. I ask the Minister to pass on my thanks for a system that worked for me at a difficult time of year. Everyone behaved well, professionally and sensitively, and I offer thanks for how it is working.
Lord Hanson of Flint (Lab)
I am grateful for that, and I will certainly pass it on to the appropriate authorities. For information, my own mother died a long time ago, on Christmas Day, and we had a very difficult time dealing with that, given the holiday period. The service that was provided, in that case in the Liverpool region, was exemplary, and it is important that we recognise good service when it happens. We are trying to improve the situation, as I have said to the noble Baroness. I will reflect on the points that the noble Lord has made.
Lord Pannick (CB)
My Lords, will the Minister reflect on the fact that there are serious delays not just in the registration of deaths but in the operation of coroner’s inquests? The outgoing chair of the Justice Committee at the time of the last election, Sir Bob Neill, said the committee had been told that the coroner service was “chronically under-resourced and underfunded” and that this was leading to totally unacceptable delays. Could the Minister or the noble Baroness, Lady Merron, add this to the shopping list of matters they will look at?
Lord Hanson of Flint (Lab)
I feel as if I am answering for three departments today: the Department of Health, the Home Office, and now the Ministry of Justice has been thrown in. I will reflect on and share with my noble friend Lord Timpson the points that the noble Lord, Lord Pannick, has made. I cannot answer him today but I will certainly make sure it is looked at.
Ambassadors: Vetting Process
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, ambassadorial appointments go through an extensive process, which includes national security vetting. This is a robust process to which thousands of civil servants are subject each year. As noble Lords would expect, it is none the less kept under continual review to ensure that it remains fit for purpose and addresses any shortcomings. That is why yesterday we announced that direct ministerial appointments for senior ambassadorial roles must now pass security vetting before they are confirmed or announced.
Lord Pack (LD)
I thank the Minister for that Answer. The other part of the process is the due diligence process that the Cabinet Office undertook for the ambassador to the US. How many other appointments have the Government made following the same or a substantially similar process as was used for the ambassador to the US? Do the Government have confidence that the outcome of the process was correct in all those other cases, given the problems we are now aware of with how the process worked in the case of the ambassador?
Baroness Chapman of Darlington (Lab)
I have no reason to believe that there are any other such issues— I think we can all accept that this was an exceptional situation—but that does not mean we should not review our processes and make sure that any changes that ought to be made are made. As the noble Lord suggests, this may not be the only occasion on which this kind of incident happens. We want to make sure that these processes are as strong as possible.
Lord Anderson of Swansea (Lab)
My Lords, is it not the case that the overwhelming majority of ambassadors are appointed from within the service and therefore, perhaps over several decades, their competence and loyalty has been tested? The Question therefore refers perhaps to the very few people appointed from outside the service, and of course that process should be very rigorous.
Baroness Chapman of Darlington (Lab)
The process ought to be rigorous in all cases. There are occasions when people are appointed from outside the service. I think the former head of mission in Cuba was a former Conservative MP, and there are Members in this place who have been high commissioners in Australia and South Africa and have done an incredibly good job, as the vast majority of our ambassadorial appointees do. But it is right that we look at this extremely carefully in light of what has happened and, if there are changes that need to be made, that we make them.
Lord Ahmad of Wimbledon (Con)
My Lords, I experienced the process for many years. Even as a Minister of State you gave references and had views, but ultimately it was a decision taken by the Foreign Secretary and then passed on to the Prime Minister—that process is very much established. I pay tribute to other Permanent Under-Secretaries who sit in your Lordships’ House and from whom I learned the process. Surely the fix here is that any political appointment, irrespective of the Government, is also put through that very same vetting process. That will resolve many of the issues the Government are now facing.
Baroness Chapman of Darlington (Lab)
My understanding is that that is the case. I think the only difference here is around the timing of the vetting and the announcing; the actual vetting process was the same. There is now another process about making sure that the documents we all need to see in order to assure ourselves of this are available, because this is a public confidence issue as well. I hope that can be done in good time, and the ISC has taken responsibility for doing that.
Lord Sikka (Lab)
My Lords, the Mandelson episode shows that party and personal loyalties can obstruct robust scrutiny. To prevent repetition of this kind of debacle, Parliament must ratify all ambassadorial appointments. Does the Minister agree?
Baroness Chapman of Darlington (Lab)
I am very much in favour of parliamentary oversight, but I think the scale of that undertaking needs to be properly understood by any parliamentary body that may wish to undertake such a thing. I have not heard anybody say that all our ambassadorial appointments should be subject to such a process; I think I would need some persuading.
Lord Bellingham (Con)
My Lords, can I just ask the Minister to clarify a point? She mentioned that Lord Mandelson went through the due diligence. She then said—I think I heard her right—that he was appointed and then the developed vetting took place after that. Why was that the case?
Baroness Chapman of Darlington (Lab)
I think what I said—I hope it is what I said; if it is not, I will clarify it—was that it was an announcement. The changes announced yesterday by the Cabinet Office were around making sure that that does not happen in future. Although it does not affect the vetting in substance, clearly it creates a perception and there is a risk there. We wanted to remove that, so we have announced that already. When there are further changes, which almost inevitably will arise as a result of the reviews that are being undertaken, there will be subsequent changes as well.
Lord Wallace of Saltaire (LD)
Can I press the Minister on what she said about being in favour of public appointments having parliamentary scrutiny? We on these Benches strongly support that. It sounds a very welcome thing, not necessarily for all our ambassadors but certainly for all senior public appointments. After all, we are supposed to be a parliamentary sovereignty and the idea that these are entirely in the hands of the Prime Minister clashes with the myth, at least, of parliamentary sovereignty. Can she explain a little more about whether this is now government policy?
Baroness Chapman of Darlington (Lab)
Government policy as regards the narrow issue that the noble Lord raised has not changed. That is not to say it cannot or will not ever change as a consequence of the considerations being made now. It is possible for the Foreign Affairs Committee to summon an ambassador and to want to hear from them. That is available under existing arrangements. I take his comment that he feels that Parliament should have greater input and greater oversight of many of those things. I think that is a welcome suggestion.
Lord Callanan (Con)
My Lords, in his resignation letter, Morgan McSweeney said:
“When asked, I advised the Prime Minister to make that appointment and I take full responsibility for that advice”.
The interesting words there are “When asked”—so Mr McSweeney did not originally suggest the appointment of Mandelson as US ambassador. Perhaps the Minister can tell the House who did.
Baroness Chapman of Darlington (Lab)
I honestly do not know who originally had the idea; I bet they wish they had not. I am afraid I cannot enlighten the noble Lord. As far as Morgan McSweeney goes, he has done great service over very many years to the Labour Party, and by extension to this country. He remains someone who many of us hold in high esteem, and we wish him all the very best.
Baroness Foster of Oxton (Con)
My Lords, I realise that this is a very trying experience for the Minister and the Benches opposite, but I do not think there has been an issue over vetting if we look historically at the appointments that have been made from the Foreign Office and for ambassadors of this country. The real issue is about the decision taken by the Prime Minister. The Prime Minister of the United Kingdom appointed a person—Lord Mandelson—as the ambassador to the United States of America knowing, and admitting he knew, that he was still in touch with a convicted paedophile. That is the nub of this Question. Will the Minister acknowledge this and, in turn, when looking at the vetting process, make sure it is probably the right way around?
Baroness Chapman of Darlington (Lab)
I will correct the noble Baroness; the Question today is specifically about vetting. I note that there is a sharp difference with the Prime Minister we have today, who takes responsibility for the decision he made. He has apologised for the decision that he made and is taking measures to put it right. The apology that he made was received and accepted by one of the survivors of Jeffrey Epstein. If it is good enough for her to go on broadcast media and say that, it is good enough for me. I want to see measures put in place that will put this right and mean that this can never happen in the future. That is what the Prime Minister is focused on, and I think that is what the country wishes him to do.
Baroness Fox of Buckley (Non-Afl)
My Lords, I appreciate that this is a Question about vetting, but behind it is potentially a question about political judgment. When choosing an ambassador for any country, rather than having an elaborate problem of vetting, one might google. When I googled this, I found out that that particular potential ambassador was friends with somebody running an international sex trafficking gang in which young women were exploited and abused. Therefore, although I want there to be good vetting, I suggest that maybe the problem is not vetting but one of political judgment. Does the Minister agree?
Baroness Chapman of Darlington (Lab)
What I do agree with the noble Baroness about—I commend her on doing this—is focusing her question on those women and girls who were victims of a heinous paedophile. That is the right thing to do. Obviously, and the Prime Minister would be the very first person to say this, this was a bad decision. When you make a bad decision in life, especially when you are the Prime Minister, you have a choice. Some Prime Ministers have stood at the Dispatch Box in the other place and told barefaced lies about it. Ours did not, and I am proud of him for that.
Sustainable Aviation Fuel Bill
(1 day, 4 hours ago)
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16:32 - Division on Amendment 6 - Ayes: 188 / Noes: 258 - Amendment 6 disagreed.
17:24 - Division on Amendment 12 - Ayes: 186 / Noes: 251 - Amendment 12 disagreed.
Member’s explanatory statement
This amendment and my other amendments to clause 1 provide that a revenue certainty contract can only relate to UK produced aviation fuel (as defined).
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, I thank all noble Lords for their extensive engagement between Committee and Report. Amendments 1, 2 and 4 in my name will ensure that the Secretary of State can enter into revenue certainty contracts only where the supported SAF is produced at a facility in the United Kingdom. This will provide the industry with a clear signal of support. I hope that this measure reassures noble Lords that I have considered the contents of the amendments tabled in Committee by the noble Baroness, Lady Pidgeon, the noble Earl, Lord Russell, and the noble Lord, Lord Grayling. I thank noble Lords for their constructive engagement in reaching this position. I urge noble Lords to support the inclusion of these amendments in the Bill. I beg to move.
Lord Grayling (Con)
My Lords, I apologise to the Minister and the House that I was unable to be here in Committee because of a family crisis. I am very glad to be here today and to welcome these amendments. I have no intention of moving my own amendment since the Minister has addressed my concerns. The important thing was to ensure that nobody could game the system: that we knew that we were supporting UK manufacturing and not somebody playing a fast one on us by shipping mostly complete fuel to our country, polishing it up a bit and claiming it was British. The Minister has done that with these amendments and I very much welcome them. I am grateful to him and I support them.
Earl Russell (LD)
My Lords, I am pleased to see the noble Lord, Lord Grayling, back in his place. On behalf of these Benches, I also thank the Minister and the Government for bringing forward these amendments. These important issues were raised in Committee. The Government have listened to the concerns that were raised and we welcome the amendments that have been brought forward. We are grateful that the Government have listened and we are delighted to accept them.
Lord Moylan (Con)
My Lords, I wish only to congratulate my noble friend Lord Grayling on his amendment and, further, on having persuaded the Government to table alternative amendments that have the same effect as his. We have no objection to those amendments.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord, Lord Grayling, for Amendment 5, which we debated in Committee, and for his contribution. I am very grateful to hear from all noble Lords that the amendments that the Government have tabled deal with the issue that was raised in Committee.
Member’s explanatory statement
See the explanatory statement for my first amendment to clause 1.
Lord Moylan
“(2A) A revenue certainty contract may not provide for payments in respect of power-to-liquid sustainable aviation fuel.” Member’s explanatory statement
This amendment ensures that revenue certainty contracts under the Act may not be used to subsidise power-to-liquid sustainable aviation fuels.
Lord Moylan (Con)
My Lords, for the benefit of noble Lords who have not become totally enmired in the question of sustainable aviation fuel, it might be appropriate at this stage to spell out that there are, essentially, three sorts of aviation fuel. Of course, everything I say on this topic is, to some degree, a simplification that may be subject to correction and refinement, but broadly speaking there are three sorts. One of them goes by the inelegant name HEFA. I will not tell noble Lords what it stands for, because I cannot remember the very long sequence of syllables that comprise it, but, essentially, it is recycled cooking oil.
There is no real shortage of HEFA in the world. The Government have said that it is not the intention of the Bill for the financial support mechanism it contains to be used to subsidise the production of HEFA. None the less, the Bill allows for HEFA to be subsidised; one of the amendments in my name in this group would preclude that. Another amendment, in the name of the noble Lord, Lord Ravensdale, would have a very similar effect to mine, although his is worded much more elegantly and elaborately. Its effect is also slightly more impenetrable than mine but, if one follows the chain of words, it comes to a very similar effect. He and I are at one in saying that the Bill should preclude the subsidisation of HEFA.
There is, higher up the chain, a further form of sustainable aviation fuel, which we can describe as non-HEFA. The difference is that the source material, the feedstock, has to come from sources other than used cooking oil. Municipal waste, for example, would be non-HEFA fuel. There is in place, prior to the Bill, a sustainable aviation fuel mandate that was introduced by statutory order about 15 months ago, under this Government. It requires an increasing amount of HEFA to be mixed into aviation fuel over the next few years, but at a certain point, the mandate says non-HEFA has to be mixed in as well. In other words, the sustainable aviation fuel requirement cannot be satisfied by using simply HEFA and adding more and more HEFA over the years—at some point, some non-HEFA fuel has to be added as well.
As I understand it, it is largely the case that the Bill is aimed at stimulating the production of non-HEFA fuel, which is currently not in production. We will come back at a future stage to whether it is sensible and necessary to subsidise this—at the moment, we are simply discussing what the fuel consists of and what the Bill should be directed at.
Again, while I do not wish to steal the Minister’s thunder, my understanding is that the Government are clear that the main aim of the Bill is to subsidise this non-HEFA fuel. Beyond HEFA, if one goes right to the top of the chain, there is a form of fuel that is not entirely speculative, but is in production in a small, experimental way in the United States and is called power to liquid. PtL, as I understand it—and I speak in a simplified way because I am not technically qualified—captures carbon from the atmosphere and turns it, through some wonderful process, into a liquid fuel that can be mixed in with standard aviation fuel.
It is true that the sustainable aviation fuel mandate that has been in place for 15 months requires that a certain amount of PtL is added in years into the future. That would mean HEFA in the early years, then more non-HEFA, which has to build up, and some PtL added later. That is the progression envisaged by the sustainable aviation fuel mandate.
The Bill would allow the subsidisation of PtL, but I have an amendment in this group which would prohibit that. The whole question of PtL is so speculative that we have no idea what it would cost to subsidise, and it is far distant. I remind noble Lords, who I am sure have been attentive to this, that a sunset clause is introduced in Clause 1(7) and that no contract, by way of a subsidy, can be let
“after the end of the period of 10 years beginning with the day this Act is passed”.
If we are to have long-term subsidies for sustainable aviation fuel—and it may well be 10 years before PtL production is feasible—the Bill will probably be useless for that purpose in any event because, unless amended, it will have expired. My amendment to remove PtL would be a safeguard against the subsidy regime envisaged by the Bill, whose mechanics we will turn to in later amendments, being abused and run away with as we finance and support a very speculative and potentially very expensive fuel.
In the meantime, I understand that the Government take the view that the very small amounts of PtL required and envisaged by the mandate can be secured by import at the due time in the future—again, the Minister can correct me if all this is wrong—so there will be no damage to the mandate if the Bill excludes PtL. That is the substance of these groups of amendments.
Lord Ravensdale (CB)
My Lords, I remind noble Lords of my interest as a chief engineer working for AtkinsRéalis. For my Amendment 7 in this group, I have simply retabled my amendment from Committee. As a brief reminder, we have targets in the SAF mandate —coming back to what noble Lord, Lord Moylan, said about power to liquid—and an escalating percentage of sustainable aviation fuel needs to be power to liquid. That is clearly set out in the SAF mandate. This amendment is trying to ensure coherence between the SAF mandate and the projects given support under the revenue certainty mechanism.
This comes back to what the Minister set out about support for UK production. The percentages in the SAF mandate could simply be met by importing power to liquid fuel, so it is important that we set out the ambition for the industry to meet in producing all that fuel, which is already legally required under the SAF mandate, in the UK, aligning that with the earlier government amendments. I recognise that setting this out in the Bill may be going too far, but I would welcome the Minister’s comments on how this could be set out in the allocation framework documents to give industry that steer on power to liquid fuel and the expectations for producing it in the UK.
My Amendments 14 and 16 are similar to those I tabled in Committee, and I thank the noble Lord, Lord Moylan, for signing them. I reflected on the Minister’s responses at that point, but I did not hear any compelling reasons why HEFA sustainable aviation fuel products should be included in the scope of the Bill. As the noble Lord, Lord Moylan, said, my amendment and his Amendment 15 are very similar and aim at the same thing. Mine deals more with the base product, using established definitions, and his encompasses the totality of HEFA products.
I welcomed meetings with the Minister’s team of officials. The outcome was that the main rationale for retaining HEFA in the Bill is that that recognises that this is a fast-developing market and it is important to retain that flexibility in primary legislation. I accept that, but I still find it hard to imagine a scenario where the Government want to subsidise HEFA using the revenue certainty mechanism. The whole point of the legislation is to help pump-prime those new industries, not to support the well-established industries that we have to provide HEFA fuel.
The Government are taking broader powers than they need under the legislation, so there is a risk that, as we go forward, subsidies could be given outside that intent. However, I hope that the Minister will be able to say something substantive about this in his remarks, on the exclusion of HEFA, and I look forward to hearing what he has to say in that regard.
Lord Grayling (Con)
My Lords, I rise briefly to speak in support of the amendments from the noble Lord, Lord Ravensdale, on crops, and to share many of the concerns raised about HEFA. I declare my interests on the register as an adviser to AtkinsRéalis—there are a lot of us here today.
My concerns are that, first, I do not believe that we should be using crops to make fuel. In a world that does not have enough food and where biodiversity is under threat, where deforestation is happening in areas of the world that provide extra land for agriculture, I do not think that there is any justification for growing food and turning it into fuel. I ask the Minister please to exclude crops. The United States is permitting them, and the European Union is not, and I think that we should fall on the side of avoiding the use of agricultural crops. Agricultural waste is a different thing —the residue from crops, such as straw and corn husks. Agricultural waste is one thing, but actual crops is another, and we should not be using them.
On HEFA, we are where we are, but we have to exercise extreme care, because the truth is that there is not enough used cooking oil in the world to fill the supposed need for that used cooking oil. All too often, the suspicion is that somebody is dumping a chicken wing into a tub of virgin palm oil and saying that it is HEFA—so HEFA is something that we need to move away from as quickly as possible. In any case, we depend on imports from the Far East for it, which may not be sustainable going forwards. Our focus should really be on biowaste and municipal waste and on the technologies that offer a really good path for the future —but let us not use crops and let us be extremely careful with what we do with HEFA. I have a lot of sympathy with what my noble friend Lord Moylan and the noble Lord, Lord Ravensdale, have said. It is far from clear that this is a genuine product that has the full potential to do what is necessary.
Lord Harper (Con)
My Lords, before I start, I draw attention to my entry in the register as non-exec chair of RVL Aviation, which is in the aviation sector but not involved in the production of sustainable aviation fuel.
I strongly support this move to make sure that we do not include food crops. I have one caveat, which I raised in Committee, and I wonder whether the Minister can update the House. My noble friend Lord Grayling drew attention to the different position that the United States has taken about including food crops. My starting point, as his, is that we should not include food crops. The only caveat that I raised in Committee was that if, in doing so, that enabled us to ensure that the United States continued to support the development of sustainable aviation fuel, given the importance of the United States in the international aviation sector, there might be a case for that. I would be interested to know whether the Minister can update your Lordships on any discussions that have taken place with the United States. If it is not necessary to do that, I strongly support the amendments that are there to make sure that we rule out food crops because, as my noble friend Lord Grayling said, using land to grow crops for food is what we should be doing, and we have seen, in the renewable energy sector, what can happen when you have policy that then drives behaviours that you had not intended, which have outcomes that are environmentally not welcome.
The second point that I raise is that I support the amendments to rule out the use of the revenue certainty mechanism for subsidising HEFA. As my noble friend Lord Grayling said, it is important that we move away from that and develop the new technologies, as my noble friend Lord Moylan said from the Front Bench. The danger of allowing subsidy of things that we are trying to get rid of is that you never get rid of them; any subsidy that there is should be used for the development of new technologies and processes. That is the rationale for having a subsidy regime in the first place. Setting that framework is very welcome.
My final point is on power-to-liquid technology. My noble friend Lord Moylan set out his view that that technology is probably not yet at a point where this Bill would be of any use. My starting position and his is that you have to justify carefully the need for subsidy, so it would not be a bad thing, if that technology is some way away from development, to force the Government to come back to Parliament to rejustify subsidy for power-to-liquid. That would be very welcome. If the Minister can update the House that providing subsidy to develop the technology and get it into production would have a much nearer-term outcome than my noble friend suggested, I might think again. However, in the scenario that my noble friend Lord Moylan set out, his amendments would be very sensible and helpful in testing the Government and forcing them to put on record the state of that technology.
Earl Russell (LD)
My Lords, this second group concerns different aspects of the operation and scope of the revenue certainty contracts. We appreciate the good intentions to influence the mix of technologies and feedstocks supported by this scheme, but we cannot support these amendments, each of which in a different way would introduce arbitrary restrictions that, while well intended, would risk upsetting the balanced, technology-neutral framework that is central to the Bill’s success. They would remove flexibility and could have serious unexpected consequences. The technological framework itself will attract the broad range of investments that will enable the rapid scaling of UK aviation fuel production. It is the creation of the revenue certainty mechanism that will attract investments, which are the literal fuel to bring the technologies we need.
I will address each amendment in turn. Amendment 3 from the noble Lord, Lord Moylan, would introduce a new subsection prohibiting revenue certainty contracts from providing payment for a PtL sustainable aviation fuel. I understand the concern that PtL technologies are still maturing and often come with higher upfront costs, but a statutory exclusion is too blunt a guillotine instrument. It would deny Ministers any flexibility to support promising PtL projects as costs fall and technologies advance, sending an unhelpful signal to developers and investors that this entire pathway is off limits for UK support. Such rigidity would involve diverting PtL investment to other jurisdictions. The Bill as drafted already provides the Government with tools to shape pathways through allocations criteria and contract design without foreclosing future opportunities.
Amendment 7 from the noble Lord, Lord Ravensdale, would take exactly the opposite approach, requiring the Secretary of State to direct the counterparty to offer minimum volumes of PtL contracts from 2028 onward, increasing annually to 2040. While the objective of accelerating PtL development is commendable, setting the number of strict time-fixed statutory quotas in the Bill would be equally problematic. It would commit the Government to contracting many time-fixed volumes whether or not sufficient viable PtL projects were ready, creating a risk of uneconomic awards or unfulfilled obligations on many occasions. As others involved in financing such large-scale projects know, they are often delivered slightly behind time as supply chains can be overrun. Building so many rigid volumetric obligations into the statute would create legal and commercial uncertainty and could crowd out credible SAF pathways. The Government’s more flexible approach, using competitive tenders and market readiness to guide allocation, remains a more practical and adaptable route.
Amendment 14 in the name of noble Lord, Lord Ravensdale, seeks to define “relevant crops” as starch-rich crops, sugars, oil crops and main crops, adopting the same definitions as used in the Renewable Transport Fuel Obligations Order 2007. Amendment 16, in a similar vein, would exclude from support any sustainable aviation fuel derived from such crops.
I fully recognise the environmental concern to avoid diverting crops into fuel production, but legislating directly for this exclusion via statutory definition risks unintended consequences; for example, capturing advanced biofuels that use a mix of waste and feedstocks or deterring innovation where crop residues are responsibly utilised. The same aims can, we feel, be better achieved through policy guidance, sustainability criteria and a certification process already envisaged under the Bill, rather than through rigid statutory exclusion. As drafted, these amendments are overly prescriptive and would constrain technological evolution and government flexibility and discourage investment.
Lord Mackinlay of Richborough (Con)
My Lords, I am the director of the Global Warming Policy Foundation, so the House might believe that I am immediately against all this sort of thing, but that would not actually be true. I am certainly in favour of proper CO2 accounting, hence my support for Amendments 14 and 15.
We cannot do another Drax, dare I say, where we end up with a situation that sounds very renewable and sustainable, but when we peel the surface away, we are actually generating more CO2 in creating the final outcome than by doing nothing. My concern if we allow crops, particularly if they are imported sustainable fuels that are derived from crops, is we do not have the CO2 accounting arising in the UK, and we pat ourselves on the back and say how marvellous and virtuous we are, but the reality is that we have increased global CO2 on an undertaking that is anything but sustainable.
I would like an assurance from the Minister that, as we progress the sustainable aviation fuel future, there is proper mindfulness about the CO2 effects of what we are doing. One of my grave concerns about the power-to-fuel ambitions is that they require such a huge amount of energy in the creation of the fuel that, by the end of the process, we will have actually created a lot more CO2. I hope that we have learned something about CO2 accounting, particularly on the back of the Drax experience, which allows virgin forests from North America to be cut down, presumably powered by petrol. It then goes to drying mills run by gas, is put on a diesel-powered train to a shipping port, comes across the Atlantic by a diesel-powered ship and is then burnt in a power station in the UK, and, hey presto, we say that it is zero-carbon. We have to do better than that as we progress a net-zero future. I do not want to see us conned and just kidding ourselves and the public that we are doing something for the right reasons when actually we are creating more CO2. I would like that type of assurance from the Minister.
Lord Hendy of Richmond Hill (Lab)
My Lords, I thank all noble Lords who have taken part in this debate.
Amendment 3, tabled by the noble Lord, Lord Moylan, seeks to prevent the revenue certainty mechanism supporting power-to-liquid sustainable aviation fuel projects. However, as the noble Earl, Lord Russell, noted, Amendment 7 from the noble Lord, Lord Ravensdale, produces the reverse, in that it would require the Secretary of State to enter into at least one revenue certainty contract with a SAF producer that is using power-to-liquid technology.
We believe that there is value in potentially supporting power-to-liquid fuels because they have a high greenhouse gas emissions reduction potential, lower competition for their feedstocks and lower risk of wider environmental issues such as land use change. Adopting either of these amendments would limit the Government’s negotiation flexibility by setting criteria in advance, which could ultimately reduce overall value for money in the contracts agreed.
The Government will establish a fair and transparent contract allocation process to assess each project’s costs, benefits and risks. It is important that government retains the flexibility to support a range of technologies if they can deliver cost-effective greenhouse emissions reductions and support the SAF mandate obligations—and, to address the point made by the noble Lord, Lord Moylan, whenever they are able to do so. He cannot predict the future any more than I can, and in any event, there is a sunset clause to the Bill which means that it can be extended in five-yearly increments. We are currently developing our approach to allocation, and we will publish an allocation strategy which outlines our approach to different SAF technologies and how the revenue certainty mechanism will support mandate targets.
On Amendments 14, 15 and 16, our intention is for HEFA technology and feedstocks to be excluded from RCM contracts because HEFA SAF—I am sorry about all these acronyms—has already overcome many of the barriers to investment that the revenue certainty mechanism seeks to address. However, the SAF market is at an early stage and uncertain, so the legislation needs to remain flexible to allow for potential future changes in the market to which the revenue certainty mechanism may need to respond.
Lord Moylan (Con)
Could the noble Lord kindly repeat the beginning of that statement where he talked about the Government’s intentions on HEFA? It is important that the House hears exactly what the Minister is saying about that.
Lord Hendy of Richmond Hill (Lab)
Of course; I am very happy to repeat it.
Our intention is for HEFA technology and feedstocks to be excluded from RCM contracts because HEFA SAF has already overcome many of the barriers to investment that the revenue certainty mechanism seeks to address. However, the SAF market is at an early stage and uncertain, so the legislation needs to remain flexible to allow for potential future changes in the market to which the revenue certainty mechanism may need to respond.
I hear noble Lords’ concerns on growing crops for purposes other than food; the sustainability criteria in the revenue certainty mechanism will align with the sustainability criteria in the SAF mandate. This will be implemented through the eligibility criteria within the contract allocation process and will reflect the latest market and technological developments.
We are actively monitoring trends to ensure that the policy keeps pace with technical and commercial developments. Therefore, we have launched a call for evidence on the eligibility of crops in the SAF mandate, which will run until 16 March this year. It asks for evidence on potential benefits, risks and trade-offs of using crops in SAF production. In answer to the questions from the noble Lord, Lord Mackinlay of Richborough, about carbon dioxide, I am sure that evidence on that will be provided as a consequence of that call for evidence.
The call for evidence does not propose any changes to the SAF mandate. Should there be a case to review the feedstock eligibility criteria, it would be subject to consultation, and any changes would require amendments to legislation. We would not want to exclude specific feedstocks in the Bill in case updated evidence proves that they meet the sustainability criteria for eligibility in the SAF mandate.
In answer to the point raised by the noble Lord, Lord Harper, on the position of the United States, we note that, but we will run the consultation first to understand the evidence arising from the questions we have asked.
I thank the noble Lords, Lord Moylan and Lord Ravensdale, for tabling their amendments and ask that they do not press them based on the actions already being taken to give flexibility and ensure value for money.
Lord Harper (Con)
May I press the Minister a little on the point the noble Lord, Lord Moylan, made? I listened very carefully both times he said it. The Government’s intention, unless something changes, is to exclude HEFA. Can he commit that if that intention changes and the Government direct some contracts to be issued which include HEFA, a Minister will come to the Dispatch Box to set out clearly and explicitly what has changed and the evidence that supported that change?
Lord Hendy of Richmond Hill (Lab)
The noble Lord makes a fair point. I mentioned the call for evidence precisely because it would be useful to have evidence from any party that cares to give it about using crops, for example. I am happy to say that in those circumstances, somebody should come back and say something about that position.
Lord Ravensdale (CB)
I thank the Minister for making that strong statement from the Dispatch Box on the intention to exclude HEFA technology and feedstocks. That is further than the Government have gone before in their statements. It sets out a clear direction of travel for the legislation and the revenue certainty mechanism, and I thank him for that.
Lord Moylan (Con)
My Lords, taking the issues separately, we in this House are used to governments seeking powers much broader than they need, and explicitly broader than they are intending to use. The Government seek the power to offer a subsidy regime, the character of which we will come to in the next group. They want the power to extend a subsidy regime to the production of something which requires no subsidy, as the technique for producing it is well established. Neste Oyj, a Finnish company which came to see me a few weeks ago, is producing vast quantities of HEFA already in various European centres.
There is no need for a subsidy for HEFA, and the Government agree. They say that they have no intention of using the revenue certainty mechanism for HEFA; none the less, they want to have the power. That is a bit shabby, although I appreciate that, thanks to the intervention of my noble friend Lord Harper, they are now willing to come to the Dispatch Box and explain why they would want to do this, if they ever should.
On power to liquid, at the other end of the scale, while I and the noble Lord, Lord Ravensdale, were broadly in agreement on the question of HEFA and crop-based fuels, we were diametrically opposed on the question of power to liquid. It is unfortunate that the Government are giving themselves the ability to launch a subsidy regime for a highly speculative type of fuel that should be subject to much closer parliamentary scrutiny when the Government might want to offer such subsidies. However, in the meantime, I beg leave to withdraw my Amendment.
““UK-produced sustainable aviation fuel”: sustainable aviation fuel is “UK-produced sustainable aviation fuel” if any part of the process for converting any feedstock into the fuel takes place in the United Kingdom.”Member's explanatory statement
See the explanatory statement for my first amendment to clause 1.
Lord Moylan
“(9) Regulations made under this section must not permit a revenue certainty contract entered into under subsection (1) to have a term exceeding 10 years.”
Lord Moylan (Con)
My Lords, Amendment 6 requires, perhaps by way of introduction, a few words on the structure of the subsidy and how it actually works. Bear in mind that prior to all this, as I said earlier, a sustainable aviation fuel mandate was put in place by statutory instrument some 15 months ago which guarantees the demand for the product. There is a guaranteed demand: in simplistic terms, it is like saying that everybody in the country has to eat half a pound of chocolate every day.
If that were to be the Government’s policy and they put that in place, you would expect chocolate factories to spring up. Existing chocolate factories might expand; new chocolate factories would come into existence. So, what is the problem? Why is it that putting the demand in place is not sufficient? Why do you need to go further? Why are factories and investors not producing this stuff for which you have put in place a mandatory and growing demand over the years ahead? I do not know the answer to that.
The Government have decided that putting the demand in place is not enough. To satisfy our somewhat rapacious foreign investor friends, they also need to be given a guaranteed price for the product. Not only is half a pound of chocolate going to be eaten every day, but you will have to guarantee the price in order to get the chocolate factories to work.
That is what the Bill does. It is not about putting the demand in place—that exists—it is about guaranteeing the price, and the way to do that is to provide some form of subsidy. Of course, a direct subsidy out of the coffers of the Treasury is almost unaffordable in our current circumstances, but it is also unnecessary because the Government have, as we know, discovered in the field of wind farms and solar panels the device of the contract for the difference.
A contract for difference is a way of guaranteeing a price, and it is done by putting in place a counterparty—separate from the Government, but essentially a government glove puppet—which will enter into contracts with these foreign investors to guarantee them a price. They will negotiate the strike price, but on what basis they will negotiate it, what skills they will bring to negotiating it, how they will be certain they are not going to be given the runaround and end up with a very adverse price—none of these things is put in place or explained to us. They will end up with a contract, which will be in place for a number of years. The effect of the contract will be to increase the price of the fuel. The increase in the price of the fuel is very likely to find its way through to ticket prices. So this Bill has an indirect but none the less fairly ineluctable consequence: it will increase air fares.
When you ask the Government by how much air fares will go up—and we are going to do that later, in group 5—they say they have done an assessment and it will be, per year, which I think means cumulatively every year, £1.50 up or £1.50 down. They do not know. It is a fairly small amount and fairly neutral, but it is almost impossible to discern how they reach that conclusion, or to find it very credible, because airlines are complaining that the HEFA they have to buy already, because the mandate is in place—and they were buying it even before the mandate came in—is turning out to be very expensive indeed compared with standard aviation fuel.
It is wrong that Parliament and the Government should burden future generations for unnecessarily long periods with these additional costs of travel and subsidies. Therefore, I propose that any contract entered into strictly by the counterparty—not by the Government but under the direction of the Government—should have a term of no more than 10 years.
Clause 1(7) of the Bill—I drew attention to this in the last group—envisages a sunset clause after 10 years. It is extendable under Clause 1(8), as the Minister said, but it has a sunset clause in it. That, however, is not a limitation on the length of the contracts that might be entered into during that 10-year period. You could quite lawfully enter into a contract with a life of 100 years within that 10-year period. There should be some limit put on that, because these costs will fall not on oldies like us, whose flying days are passing, but on young people over the rest of their lives and their careers. There may well be no justification for it by then. Who knows, by then we may well be paying people to produce a fuel but life has moved on and the fuel is not necessary. Yet we will have to buy them out of that, and that will fall on air passengers. So, a10-year limit on the contract should be quite enough for any foreign investor to start up this process and get it going. They have a guaranteed price for 10 years and after that they should be on their own. That is what the substance is of this amendment, which I beg to move.
Lord Berkeley (Lab)
My Lords, this is a very interesting amendment, because a revenue certainty contract, as the noble Lord, Lord Moylan, said, is wonderful for the suppliers. It presumably links in not just the price but the volumes—which may change from year to year —and the sources. The noble Lord opposite mentioned the issue of Drax and where that material comes from every year. Would there be a 10-year guarantee price for that? As the noble Lord, Lord Harper, said, any old agricultural product that was edible could be covered as well. And we have not yet discussed the worry that many people have about the number of trees and everything else being cut down in the Amazon basin, which could also be covered by this. So, a revenue certainty contract is pretty difficult and this amendment is a good start in at least limiting its scope and time.
Lord Harper (Con)
My Lords, my noble friend Lord Moylan set out the challenge—the thing you have to justify—to put the revenue certainty mechanism in place. It was certainly one of the things that I grappled with, and challenged the industry on, when I was the Secretary of State for Transport and we were developing the beginnings of this policy. As my noble friend said, the SAF mandate sets out some guaranteed demand for the industry producing sustainable aviation fuel. The challenge I always put to those thinking about investing in producing the technology was exactly the challenge that the noble Lord, Lord Moylan, set out: if you have guaranteed demand, what is the barrier to producing that product?
We discussed this in Committee. The logic is that, for some of these products, it is new technology that requires significant upfront capital investment, and the judgment is that, if you compare it to other similar sorts of investments that these investors are making, the risk is higher than with those other investments. Therefore, if you do not do something to close that gap, you will not see the investment in the technology, particularly here in the United Kingdom, where we want to see the production take place, at least in part, if for no other reason than resilience.
What you are really dealing with is closing the gap between the risks involved in producing SAF and the alternative products that those investors could invest in. I do not think, therefore, that you need an open-ended contract. You need to put some limits around it. I am sure that the Minister will have some responses on what those limits should be, but a very obvious one would be to have a time limit, so that investors have some certainty: they have guaranteed demand and a period when they will get a guaranteed price. That should enable the risk premium to be reduced and enable the investment and production to take place.
If we start from the assumption that it certainly does not need to be an infinite period and should therefore be fixed, the debate is therefore just about what the length of that period should be. Now, the Minister may want to come back and say that the 10 years proposed by my noble friend is the wrong number or limitation period, in which case I would be happy to listen to the arguments that he makes about an alternative period, but I do not think that the right answer is that it can be any length at all, with no cap on it. I would be much more comfortable if we put a cap on it.
Again, if, at some point in the future, there was a clear justification for changing it, there would be nothing to stop this or a future Government coming back to Parliament to change the position. But I do not want to see open-ended contracts in place, particularly since we have legislated for there to be guaranteed demand. So I strongly support my noble friend’s amendment, unless I hear a very good counter case from the Minister.
Earl Russell (LD)
My Lords, I am responding to Amendment 6 in this group, which seeks to cap the length of revenue certainty contracts to a maximum of 10 years. On the face of it, this might appear to be neat and disciplined but, in practice, we conclude that it is both arbitrary and unduly restrictive.
The noble Lord spoke about the need to control costs and we agree with that. It is also important, as we discuss this, to recognise that the Bill covers a range of technologies and huge investments going into them, but it may also include emerging technologies. Ten years is not derived from any settled evidence about what different SAF projects will require; it is simply a round number that seeks to be written into this primary legislation.
Some plants with high upfront capital costs and long asset lives may need longer-term revenue support to be financed at all, particularly in the current high interest rate environment. Others, especially later or more standard projects, could be perfectly viable on shorter contracts, which I am sure is the Government’s intention for many of the projects that will be considered. However, a single statutory ceiling takes no account of any of that diversity in these emerging markets. It is not really for us to know more than the Government and their officials, as they have details that we do not.
This amendment is also restrictive because it removes one of the Government’s key design levers. The ability to adjust contract length between technologies and over time, in response to costs and market maturity, is fundamental to achieving value for money. If we fix 10 years in the Bill, any future Government who judge that a 12-year or 15-year term is necessary to secure a first-of-a-kind project would be unable to do so without further primary legislation. This rigidity could also play into commercial hands, encouraging developers to structure bids around fixed terms in ways that actually undermine the very affordability that is spoken about.
While the intention is understandable, imposing an arbitrary timeline would remove the flexibility and pragmatism that any evidence-led scheme requires. It would, in effect, ask the Government to negotiate with one hand tied behind their back. We do not believe that this amendment is helpful in this emerging market, but we do think it is important that contracts are reviewed. On that, I ask the Minister, in the context of reporting later on, whether the length of caps that are imposed under the Bill is something that he would be prepared to include in the reporting information that will be made available.
Lord Hendy of Richmond Hill (Lab)
My Lords, Amendment 6 would require that the Secretary of State set a maximum contract term for revenue certainty contracts before exercising the regulation-making power in Clause 6. I draw noble Lords’ attention to the overall intention of the Bill, which is to generate a new and growing United Kingdom industry that, I hope—contrary to what the noble Lord, Lord Moylan, said—will be financed in the United Kingdom as well.
We are currently consulting on the detailed design of the revenue certainty mechanism. The consultation provides the rationale behind the indicative heads of terms, which sets out the framework for principal terms and conditions that could be included in a revenue certainty mechanism contract. As highlighted in the Government’s continuing consultation, we propose a 15-year term for all contracts. This aligns with the expected 10-year to 15-year debt repayment period that SAF producers will encounter. It is important that this flexibility is retained and not restricted by detailing a contract length in the Bill.
Final decisions are subject to the continuing consultation, which will inform the detailed design of the full terms and conditions of revenue certainty mechanism contracts. In answer to the question posed by the noble Earl, Lord Russell, I am sure that we can find a reporting mechanism that sets out the actual length of those contracts. I therefore respectfully ask the noble Lord, Lord Moylan, to withdraw Amendment 6.
Lord Moylan (Con)
My Lords, I am disappointed by that answer. One can look at this issue in a number of ways. The way I look at it is that we have a responsibility to future generations not to burden them with excessive costs on a speculative basis. The Government are consulting. They are no doubt consulting with the foreign investors who are considering investing in these plants. If they listen to the foreign investors, the longest possible term is what they will bid for.
We need to be tougher. It is for us to put the case of those who are voiceless in this consultation: the people—in many cases young people, as they will be the ones paying in the future—who will have to sustain this. I am afraid I am not satisfied with the answer given by the Minister. I wish to test the opinion of the House on my amendment.
Lord Grayling
Member’s explanatory statement
This amendment seeks to ensure that the levy is raised for the purposes of manufacturing sustainable aviation fuel in the United Kingdom. Connected with another amendment in the name of Lord Grayling, it seeks to prevent the government from diverting the levy funds to other broader aviation or climate-related policies.
Lord Grayling (Con)
My Lords, I will speak to a series of amendments that I tabled. I have given the Minister advance notice, and I hope he is going to be able to reassure me on them. I will take them in turn.
Amendment 8 is simply to try to avoid the Government pulling a fast one, raising money from air passengers and spending it on something completely unrelated. I am looking for a cast-iron, on-the-record assurance from the Minister that that cannot happen under the terms of the Bill. We know that on occasions government departments try to slip things under the counter, and I am simply seeking absolute assurance that that will not happen in this case. Amendment 9 basically seeks to achieve the same thing.
Amendment 10 addresses what is still the crucial operational point for this legislation: where and how do you actually apply the levy? The Minister knows that I have had serious misgivings, as have many people, about the plan to try to apply a mechanism that relates to market share in the previous year, to do it the year after and the rest, which I think would be completely unworkable and, of course, distorts the market if you have new entrants or people leaving the market.
The one thing we do not want to do is to end up undermining the existing producers of aviation fuel, which are carrying an extra cost. We do not want to have them closing and going elsewhere because we have not got this right. I remain persuaded that the way to do this is to levy a charge at or around the time of delivery—the time at which it is delivered from the refinery or the terminal to the airline. I appreciate that it may be something you do one month in arrears, looking at the previous monthly invoice accordingly. I do not have a problem with that, but I have a problem with anything looser than that.
I am looking to the Minister to explain tonight how this is going to work. I know the Government are still working on all the details, but we cannot have some abstruse mechanism that tries to refer back years in the past. We need something current and relevant that reflects changes in the marketplace and applies the costs in a timely way to those producing the fuel, so that there is no distortion of the marketplace.
Amendments 17 and 18 are really about the timing of the legislation. We know that we are maybe four or five years away, I hope slightly less, from the first significant SAF plant being operational in this country. We cannot have a situation where the levy starts to be applied now and is just piling up in the background with nothing to spend it on. I am looking for an explanation from the Minister as to exactly how the commencement of this legislation will work. I have proposed in these amendments that it should be six months before the first manufacturing facility comes on stream—the Minister may have an alternative suggestion—but we cannot have a situation where commencement is imminent but the operation of the Bill is years away. Again, I am looking for assurance and explanation from the Minister on this, so that we know we are not charging air passengers today for something that is years in the future. I beg to move.
Lord Moylan (Con)
My Lords, I have Amendment 11 in this group, which substantially coincides with Amendment 10 in the name of my noble friend Lord Grayling. I will just take a minute to explain, in my perhaps rather more simple terms, what mischief these amendments seek to address. I gave some idea of the mechanism when we spoke on the last group. It will work like this: contracts will be entered into by a counterparty and a fixed price will be guaranteed under a contract for the difference. That means that if the prices are below a certain price, the counterparty will collect money by way of the levy, and if they are the other way around, it will pay out to ensure that the producer receives a fixed price. We know that economically, ultimately, the levy will be paid by the passenger on the flight, but who is going to be charged the levy?
The Government have decided—we are not disputing this—that the levy should be charged at the highest point in the supply chain, which is the producers of standard aviation fuel, essentially kerosene. They have to mix in the SAF to the required amount, whichever type of SAF it is, and they should be the ones that will pay the levy if a levy is required—that is, if prices are such that a levy has to be paid. We do not object to them being the levy payers, but how is the levy calculated and then applied to them?
The Government’s proposal is that the levy should be calculated a year in arrears and then applied to them as a charge which they have to pay in arrears at that point according to the market share that they had in that year. That is all very well, you might say, and very convenient from the Government’s point of view, because at that point they know exactly how much they have to charge, so there will be no difficulty and no question of having the wrong charge paid and having to make up bits later, or of the counterparty being out of funds by a penny. They will know exactly by the end of the year what should be charged and they will distribute it to the producers according to their market share during that year, which will also be known by that point.
The difficulty for the producers is that they will not know during the year in which they are selling the fuel what they should be charging the airlines to cover the cost of the levy. It is accepted that they should charge the airlines, because that is the way it trickles down to the passenger. They will not know during the year how much levy they are going to have to pay at the end of the year, so they will not know how much they should be charging per litre of fuel that they sell.
They would prefer, as it is easier for them and avoids this complexity, if they were told a price per litre which they should charge. The charge of the levy in addition to the base kerosene fuel could even be apparent on their invoices. Of course, if the Government were to do that, it would expose the counterparty to some financial risk—I see that—because they would have to work on the basis of estimates. They would have to estimate the prices during that period and therefore would be exposed to some financial risk. I imagine that, behind the Minister, there is a middle-ranking official in the Treasury saying, “You cannot take any financial risk that will fall upon the Government or any entity associated with the Government”.
What the Government are proposing is fundamentally unworkable, because the only way the producers can handle this is to protect themselves by overcharging. They will overcharge to compensate themselves for the levy, and so the transparency of the levy travelling through the chain of command, so to speak, down to the ticket payer will be obscured. The producers leave one in no doubt when one speaks to them that this is the only mechanism they will have. There is a real point of workability about the Bill which has not been addressed.
I imagine the Minister will respond by saying, “Oh, but we are having a consultation”. This is a futile protest, but I want to raise this point of protest as I have the opportunity: would it not have been better if the Government had done the consultation and then brought forward the legislation? Why is it that we have to have the legislation before we know the results of the consultation with the industry, so that we do not actually know what is workable? I suspect the Minister will say that, but I am afraid it is not satisfactory that we are asked to pass this legislation with that important question of workability still outstanding. I may be wrong, and it may be that the Government can explain that it is perfectly workable, but nobody has been able as yet to establish what that workable solution is.
Lord Harper (Con)
My Lords, briefly, I support my noble friend Lord Moylan’s amendment. It is very important, particularly when we come on to later groups and are talking about the ultimate impact of this—which is that it will, in effect, fall on to the end consumer, as all taxes do—that we make sure that this is as simple and straightforward a process as possible, so that we can explain to people what we are doing, why we are doing it and what the cost is. That is always to be welcomed in policy-making.
Further, this should be workable and straightforward for aviation fuel producers. They are the ones that we have chosen to put the mandate on, in giving them the legal responsibility to produce sustainable aviation fuel and blend it with their regular fuel. The current structure transfers the level of financial risk to them. I agree with my noble friend Lord Moylan, in that I suspect that behind this—the Minister can tell us that we are wrong if we are—is the Treasury wanting to make sure, not entirely unreasonably, that there is no risk to the taxpayer. However, in doing so, all that has happened is that the risk has been moved on to the fuel supplier.
As my noble friend Lord Moylan says—I have thought about this as well, and I have listened to the industry—it seems that, for the producers to deal with the risk, they will have to increase what they charge the airlines. So rather than the cost and the risk falling on the Treasury and the taxpayer, it will, in effect, still fall on the taxpayer but just in their guise of an airline passenger who will face a higher ticket price. That is not very economically sensible.
The industry is very clear that the Treasury should not be picking up the costs for this. The only sensible thing would be to have a per unit price. There would be some risk for the Treasury in the short term, but that could be smoothed out over time, and the Government are perfectly able to do that. That would be a much better solution, and I hope that the Minister can at least indicate that that is where the Government’s thinking is. If he cannot do that, I suggest that my noble friend Lord Moylan is correct that we should have done the detail before the legislation, rather than the other way around.
Earl Russell (LD)
My Lords, I will speak to this group of amendments that deal with the design and timings of the revenue certainty mechanisms and the levy. While I recognise that concerns around fiscal discipline, transparency and fairness lie behind them, I do not believe that these amendments are the right way to address those concerns.
We have spent considerable time talking with industry and officials, and I am thankful to the Minister’s officials for taking the time to talk with us. We note that the consultation closed on 8 January. We have reflected to officials the concerns that industry has raised with us, and we are pleased that we had the opportunity to do that. We have confidence that Ministers, officials and industry are all working together, in what is a complex space, to find practical and workable solutions that balance a number of competing agendas. Added to this, I remind the House that these mechanisms will be subject to statutory instruments under the affirmative procedure.
Amendment 8, in the name of the noble Lord, Lord Grayling, would specify that the levy under Clause 6 can fund contracts only in respect of sustainable aviation fuel manufactured in the United Kingdom. We recognise the intention here and have some sympathy for it, but we believe that the concessions already granted by the Minister in group 1 fundamentally deal with this issue and give greater assurances to the House that the levy will be used only for those purposes.
Amendment 9, also in the name of the noble Lord, Lord Grayling, would narrow the other costs that can be met from the levy to those associated with directly related administration. Guarding against drift of levy funds into unrelated processes is absolutely right, but, in our opinion, the formulation risks overtightening. It could exclude legitimate and necessary scheme-related expenditures, such as certain forms of oversight, enforcement, market-enabling activity and the reporting that we will come on to in the final group. These would be unintended consequences. The Bill already confines the levy to the purposes of the mechanism, and regulations can and should be scrutinised by Parliament, but we believe that these restrictions would be too tight.
Lord Hendy of Richmond Hill (Lab)
My Lords, I thank noble Lords for this debate. Amendments 8 and 9, tabled by the noble Lord, Lord Grayling, seek to address how funds from the levy are used. I am happy to reassure the noble Lord from the Dispatch Box that money raised through the levy will be used only to support eligible SAF plants in the United Kingdom, and that that is already set out in the Bill.
Clause 6 restricts the costs incurred by the counterparty under the revenue certainty contracts and in carrying out its functions under the Bill. Under this clause, the levy funds will be used only to meet the cost of the revenue certainty mechanism scheme. It is important that the counterparty is able to recover its costs, which include the cost of administering the contracts, the levy and the payment of surpluses.
Amendment 10 intends to ensure that there is a specific mandatory point at which the supplier becomes liable to pay the levy. The Government agree with the intention of the amendment but believe that it is unnecessary because Clause 6(7) already provides that a person becomes liable to pay the levy at the same point when they become liable to an obligation under the SAF mandate.
On how individual levy contributions are calculated, it is important that the Bill provides sufficient flexibility to ensure that final levy design decisions deliver our design principles, including simplicity, solvency, affordability and fairness. The Government are currently reviewing responses to their recent consultation on the detailed design of the levy and engaging with stakeholders to deliver these objectives. I remind noble Lords that the regulations made under Clause 6(1), to set out how the levy will work, will be subject to scrutiny under the affirmative procedure, which will give Parliament the opportunity to continue to consider the approach.
Amendments 17 and 18, tabled by the noble Lord, Lord Grayling, seek to prevent the levy being imposed until a domestic sustainable aviation fuel producer is approaching readiness to receive payments under the Act. I reassure the noble Lord that the purpose of the levy, as set out in Clause 6, is to meet the costs of payments made by the counterparty to SAF producers and to cover the counterparty’s administrative costs. The costs of payments under RCM contracts will be insured only once eligible SAF is being produced and sold by producers who have entered into RCM contracts, which is the outcome sought by these amendments.
The Government are currently reviewing responses to their recent consultation on levy design. Some stakeholders have expressed a desire to build up a reserve fund prior to the first producer payments, which could help smooth out the costs of the scheme and help manage risks of underforecasting required payments. As the Government consider their response to the consultation, it is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny.
Amendment 11, tabled by the noble Lord, Lord Moylan, intends to introduce a standardised rate for the levy. We are currently reviewing responses to our recent consultation on the detailed design of the levy and continue to engage with stakeholders to help inform the drafting of levy regulations. Within the consultation, we sought views on the publication of a forecast levy rate, expressed in pence per litre, which could help provide greater transparency for the supply chain.
The Bill as drafted does not specify a particular mechanism and allows the Secretary of State to consider a range of options for calculating the levy paid by individual companies. It is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny. Therefore, I do not consider the amendment to be necessary.
To reassure noble Lords, the Government are live to the potential impacts of different levy designs and recognise industry’s desire for certainty and transparency, while ensuring fairness and affordability for the consumer. We recognise that the levy must be dynamic and responsive to the changing market, while ensuring that the counterparty has funds to make payments under the scheme. But, to be clear, this levy will not be used to generate unnecessary funds and will raise sufficient money to cover only the counterparty’s costs under the revenue certainty scheme.
Although final decisions will be informed by the consultation, we are exploring options that deliver this and many of the proposals, and options set out in that consultation could help provide greater certainty and transparency. As I have said, the levy regulations will be subject to the affirmative procedure, which will allow further parliamentary scrutiny. I hope noble Lords will note the steps the Government have taken in the levy design and that they therefore will not press their amendments.
Lord Grayling (Con)
My Lords, I am grateful to the Minister for a detailed explanation of the situation. I am greatly reassured by what he said. What matters in all this is that we provide the right balance. This is something the airlines are calling for, but we do not want it to unduly penalise fare payers, and to end up with disinvestment in conventional aviation fuel. I am reassured by much of what the Minister said, but I am looking to him and his colleagues to ensure over the coming months that that balance is properly found, so that we do not end up with legislation that has unintended consequences.
The Minister made a point about the reserve. I proposed six months because I believe it essential to have a short period of reserve building, but it must be short—it cannot be year after year. That was the point of my amendment. I am reassured by what he said, and I shall watch with interest what the Government do, but in the meantime, I beg leave to withdraw my amendment.
Lord Moylan
“Impact of this Act on the price of airline tickets(1) Within one year of the day on which this Act is passed, the Secretary of State must publish a report assessing the impact of the sustainable aviation fuel revenue certainty mechanism on the price of airline tickets.(2) The report under subsection (1) must include an assessment of whether the impact of the sustainable aviation fuel revenue certainty mechanism on ticket prices is greater than £1.50 per ticket per year.(3) The Secretary of State must lay the report under subsection (1) before Parliament.(4) The Secretary of State must publish and lay before Parliament further reports under this section at intervals of not more than one year for so long as the sustainable aviation fuel revenue certainty mechanism remains in operation.”Member's explanatory statement
This amendment requires the Government to assess and report on the impact of the sustainable aviation fuel revenue certainty mechanism on airline ticket prices within one year of Royal Assent, and to continue to report annually thereafter.
Lord Moylan (Con)
My Lords, we have worked our way through what the SAF is, and through the mechanism by which it is going to be subsidised and how it is going to fall on the passenger, but how much is going to fall on the passenger? What is it actually going to cost? How is it going to strike? How is it going to hit your pocket?
We are not completely in the dark on this subject. We have The Revenue Certainty Mechanism Cost Benefit Analysis, produced by the department in May 2025. Paragraph 4.23 has a lot of hinting in it, but it comes down to saying about the revenue certainty mechanism that
“the likely impact on ticket prices is between -£1.5 and £1.5, on average, per year”.
I take it that the “per year” means that it will go up, in the worst case scenario, by £1.50 a year—so over a 10-year period, it will be £15.
This is a highly speculative document; it has quite a large amount of numerical material attached to it, but it remains highly speculative none the less. Effectively, it has to guess the price of standard kerosene fuel out into future years, and the cost of SAF under mechanisms that have yet to be negotiated, so we do not yet know what they are going to be. None the less, that is the figure the Government are presenting to Parliament and the public as the cost and the pain of this measure. My Amendment 12, which is of capital importance, would require the Government to ensure that this prediction of theirs is not lost in the mists of time—that this document does not become waste paper.
The Government should be required periodically—annually, as the amendment says—to produce a report showing what this is costing in terms of ticket price. That is not straightforward for producers of aviation fuel to calculate, of course, because they are at the top end of the supply chain and would not be able to know how it worked out; they could tell you what the levy was, but they could not tell you how it translated into ticket price.
So that is what the amendment does, and it is essential because, in all this, we privilege the discussions we have with the foreign investors that are going to build these plants, and the discussions we have, to some extent, with the fuel producers on which the levy is going to fall. It is very easy, as I say, to forget the voice of the consumer and the people who, year after year, will pay more to travel. It is a significant sum if you are a family of four going on holiday, and we should be reminded of that through the Government putting their money where their mouth is, so to speak, and agreeing to report on these effects every year out into the future. I beg to move.
Lord Harper (Con)
My Lords, I support my noble friend Lord Moylan’s amendment, for all the reasons he set out. If you look at the opinion polling on this, the public support aviation and flying and want to continue doing it, and they support it being made more sustainable, so it is important that we are transparent about that. We have seen other areas where the costs of decarbonisation are not entirely clear, such as in energy production, which leads to suspicion and people who are not in favour of it being able to make mischief. It is much better if we can be transparent about it.
Earl Russell (LD)
My Lords, Amendment 12, tabled by the noble Lord, Lord Moylan, concerns the potential impacts of this Bill on airline ticket prices. I entirely understand the motivation behind the amendment. Passengers and airlines deserve transparency about how the levy costs will flow through to fares. However, this transparency is already in the Bill, and this amendment is not a particularly good way to improve on it. These Benches accept that there will be reasonable and affordable costs involved in introducing a revenue certainty mechanism, which will reflect the necessary investment to drive the transition to sustainable aviation fuel. However, we cannot support this amendment, for several practical reasons.
Amendment 12 would require the Secretary of State within one year of Royal Assent to publish a report assessing the impact of the revenue certainty mechanism on ticket prices, including whether the average increase exceeds £1.50 per ticket per year, followed by further annual reports for as long as the mechanism operates. The intention is fair, but the proposed process is largely unworkable in our opinion. The mechanism will take time to design, consult on and implement. Contracts will not be allocated immediately, and levy collection will ramp up gradually as supply chains mature. Within 12 months, there would be no meaningful data to analyse, only speculative modelling. A report produced on that basis would lack credibility and offer little value to Parliament or consumers. In the early days, as required by this amendment as drafted, it would provide very little value or information at all. Moreover, the Bill and its associated frameworks already provide robust reporting obligations, so, again, this is not a choice between providing transparency through this amendment or having no transparency.
The Government will lay a report before Parliament on levy design, contract allocation, production volumes and market development. These will give Members regular insight into the performance and the cost trends associated with the Bill.
In addition, airlines, which are best placed to assess the costs passed through to fares, will report on their sustainable aviation fuel uptake and related costs under the SAF mandate and wider aviation reporting requirements. That industry-driven data will provide a timelier and more accurate picture of the real-world price effects than a separate government study could ever hope to achieve.
There are also serious practical and cost concerns. Calculating per-ticket impacts would require access to commercially sensitive data, such as flight occupancy levels, which the Government do not hold and cannot compel airlines to divulge without imposing disruptive burdens. Establishing a separate, perpetual reporting duty would therefore create unnecessary bureaucracy and expense without improving transparency.
The Government expect that airlines will readily report on the impact of the Bill on air tickets. The practical solution is to build on existing reporting channels and refine them through guidance if needed, rather than introducing an additional obligation that cannot deliver meaningful insights at the required pace.
We share the desire for transparency and recognise that costs must be visible and fairly borne for this market to work, but Amendment 12 would not be the right way to do that. The information it seeks will already be available through integrated, industry-based reporting mechanisms. Ministers and officials both expect that this will be reported. I therefore urge the House to reject the amendment and support the Government’s practical approach to these problems.
Lord Hendy of Richmond Hill (Lab)
My Lords, bearing in mind the diligent research of noble Lord, Lord Moylan, on sustainable aviation fuel, I have resisted repeating the general aims of the Bill, but I want to say in respect of Amendment 12 that the Government are committed to keeping air travel affordable for UK holidaymakers and UK air travellers while fostering the development of a United Kingdom sustainable aviation fuel industry.
As the noble Earl, Lord Russell, said, it will take time for contract negotiations, for sustainable aviation fuel plants to be constructed and for the fuel itself to be produced and sold before any meaningful effect on fares can be assessed. The Government’s cost-benefit analysis, from which the noble Lord, Lord Moylan, quoted, of the revenue certainty mechanism that was published last year is the most reliable estimate of the likely impact on passenger air fares over this period. Given that little has changed since that cost-benefit analysis was produced, the amendment is unnecessary, as it would merely produce the same answer. I hope my explanation is sufficient for the noble Lord not to press his amendment.
Lord Moylan (Con)
My Lords, it was open to the Minister to take up the offer of my noble friend Lord Harper and suggest that any infelicities in the drafting of the amendment—for example, the requirement that the first report should happen within the first year—could be dealt with through his offering to bring forward an amendment himself at Third Reading that was drafted with the benefit of government legal advice, but he has not done so. He has no difficulty with relying on speculative reports that claim to estimate the cost of this measure, but he does not want reports based on actual experience at due time in the future.
As I say, there is a voice that is not being heard in this, except from these Benches, and that is the voice of the consumer. We will not give up on the consumer, and I wish to test the opinion of the House on my Amendment 12.
Baroness Pidgeon
“Report on UK sustainable aviation fuel production(1) The Secretary of State must, in respect of each reporting period, prepare and publish a report on sustainable aviation fuel relating to the United Kingdom.(2) The report may include, but is not limited to—(a) the total volume of sustainable aviation fuel produced, supplied to, and used in the United Kingdom during the reporting period;(b) the types of sustainable aviation fuel involved, including the feedstocks and production pathways used;(c) the volume attributable to each type identified under paragraph (b);(d) an assessment of the development and conversion of sites for sustainable aviation fuel production and supply within the United Kingdom;(e) an estimate of the reduction of greenhouse gas emissions resulting from the production and use of sustainable aviation fuel during the reporting period;(f) information reported by air travel providers in relation to their uptake and use of sustainable aviation fuel;(g) any other information the Secretary of State considers relevant to understanding the United Kingdom’s sustainable aviation fuel market, capacity, and trends.(3) The Secretary of State must lay the report before Parliament within six months of the end of each reporting period.(4) In this section “reporting period” means a period of one year beginning with 1 January 2026 and each subsequent period of one year, beginning on the anniversary of that date.”
Baroness Pidgeon (LD)
My Lords, there has been a lot of consensus at each stage of this Bill. The Government have shown that they are willing to listen and make amendments as we have debated. They have consulted the sector on different aspects of this legislation. As we have heard, this is an emerging field in terms of technology and production in the UK. That is why we on these Benches feel it is important that we have full transparency, so that we can understand how the revenue certainty mechanism is working, the impact on the sector and how we are developing this new sector in the UK. This also helps the passenger in terms of information.
My Amendment 13 asks for a report covering a number of important areas such as the volume of SAF produced in, supplied to and used in the UK; the types of SAF; an estimate of the reduction in greenhouse gas emissions resulting from the production; and the uptake and use of SAF by air travel providers. This is about ensuring that the public and industry can see the impact of this policy and the revenue certainty mechanism. It would ensure clarity about progress towards sustainable aviation fuel targets. This requirement for reporting on progress is a simple measure that we believe would help with the understanding of the Bill.
I thank the civil servants who have met my noble friend Lord Russell and me over recent weeks and listened to our concerns. I hope that the Minister will see the amendment as adding value to the Bill, and I look forward to his response. I beg to move.
Lord Berkeley (Lab)
My Lords, I support this amendment, which we discussed at some length in Committee. The amendments then, which other noble Lords supported, covered the relationship between the sustainable aviation fuel used for aeroplanes and the same fuel used for home heating. I declare an interest as having a boiler in Cornwall that survives very well on home heating.
Interestingly, sustainable aviation fuel produced through the HEFA process generates hydrotreated vegetable oil as a by-product. HVO accounts for approximately 30% of the output, a significant amount that should not be overlooked. HVO can play an essential role in helping to decarbonise the 1.7 million oil-heated households that are off the gas grid. Otherwise they use electricity, which is expensive.
Last month, we had a delegation from the village of Kehelland in Cornwall who have all been trying out HVO in their houses for about three years. They travelled, leaving at 2 am, to meet the Minister at DESNZ to present their response to the consultation that we discussed earlier—a 500-mile round trip shows they are pretty committed. But what is interesting is that, in describing their experience of using the fuel, they highlighted how renewable liquid fuels can cut emissions from home heating by up to 88% compared with kerosene—88% is a figure worth having. They work simply as a drop-in replacement. The Government’s consultation said that, of all those considered, this was the most cost-effective option for off-grid consumers.
However, the consultation still questions the feedstock availability for the fuel, which we discussed in earlier amendments today. It is puzzling that the DfT is confident that there is more than enough feedstock to boost SAF production by 22%. The research done by the industry, the EU Commission and the Irish Government indicates that there is enough feedstock—again, we have discussed that at length. I was pleased to welcome the Government’s confirmation in a Written Answer that the targets under the SAF and RTFO mandates
“are set considering global availability of feedstocks and competing demands between transport modes and across sectors of the economy”.
That seems to highlight that there is enough material for both aviation and home heating, so it would be a great shame if we pitted one sector against the other, rather than try to have a bit more of what you might call cohabitation in-between.
To incentivise HVO production, I believe a renewable liquid heating fuel obligation needs to be implemented—that is the solution—triggered under Section 159 of the Energy Act. That would create the necessary market mechanism, in a similar way to the SAF mandate and the RTFO, to give certainty to the industry to distribute HVO to households at an affordable price. I hope that I can persuade my noble friend when he responds to try to ensure that his department, the Department for Transport, and DESNZ are working hand in hand to ensure that we can scale up the production of sustainable aviation fuel to capture the benefits of HVO for home heating. I must not keep asking him for meetings every day, but, if he would accept, it would be very nice to have a meeting with him and our colleague the noble Lord, Lord Whitehead, the Minister for Energy Security, to discuss the benefits of this approach. The consultation closes today, so it seems to be the right time to meet.
Lord Harper (Con)
My Lords, I have to confess to having been a little perplexed when the noble Baroness, Lady Pidgeon, moved Amendment 13, because I had just listened to the speech of her colleague, the noble Earl, Lord Russell. I thought my noble friend Lord Moylan’s proposal simply to publish and have some transparency about ticket prices was perfectly reasonable, but the noble Earl, Lord Russell, set out a whole raft of reasons why that was entirely unreasonable, incredibly difficult, completely unnecessary, bureaucratic and costly and why we should not bother ourselves with it, and he then proceeded not to support my noble friend’s amendment. Although I disagree with the noble Earl, he made some perfectly reasonable arguments, although not ones that I agree with. I am perplexed because his noble friend’s amendment is very comprehensive and would place some really quite significant reporting requirements on the Government in a way that seems to be completely at odds with the argument that the noble Earl just made.
Lord Grayling (Con)
My Lords, I rise both to support what my noble friend Lord Harper has just said and to add a caveat. I have great respect for the noble Baroness, Lady Pidgeon, and I find we agree on a lot of things, but it worries me more broadly—and this is not specifically just about this amendment—that when one passes an amendment like this, one creates huge bureaucratic demand. If we look at the practicality of what will be needed, as my noble friend Lord Harper has just described, we are talking about putting together, in effect, an inspectorate, because that is what this would entail—an inspectorate to talk to airlines, an inspectorate to talk to producers, and an inspectorate to have a pretty close watch on the flow of feedstuffs, the supply chain of feedstuffs and the sourcing of feedstuffs.
What we are looking to achieve here is to build a UK industry so that we do not simply end up buying SAF from abroad. The truth is, right now, the limited amount of SAFs used in this country are coming from United States and potentially elsewhere. We do not want that to happen; therefore, we want to create as investor-friendly an environment as possible in the United Kingdom. That is what this Bill is all about. It is what the purpose of the revenue certainty mechanism is, and I am very glad that the principle behind the Bill has attracted cross-party support. To try to put together now a mini-inspectorate—and maybe not that “mini” an inspectorate—to look at all the things covered by this amendment would cost taxpayers’ money and push up the cost of the revenue certainty mechanism.
We talked earlier about how the funds would be used. Certainly, the funds would be eligible to be used for the monitoring of all this, so that is an extra cost on the revenue certainty mechanism and an extra cost ultimately therefore to airline passengers. It is an extra level of complexity for investors, putting a whole range of bureaucratic requirements on them. And, of course, for government, it opens the doors to judicial review. Very often, a broad-ranging amendment that seeks reports and clarifications ends up in the courts, being used by somebody who has a particular point to prove against government. It opens the door to too much activity within the courts and not enough freedom for government to get on with the job. That would be a negative step for the legislation, given that we all want this to happen, want it to work well and want the investment to flow in the country. To create a monitoring mechanism on this scale would not in any way be the right thing to do.
As my noble friend Lord Harper rightly pointed out, simply monitoring the impact on the cost of an airline ticket is one thing, but covering the range and dimensions of activity in this amendment would create too much extra cost and too much complexity and it risks being a deterrent to investment in the UK. So, with apologies to the noble Baroness, I cannot support her amendment.
Lord Moylan (Con)
My Lords, perhaps I may welcome the noble Baroness, Lady Pidgeon, to this debate. She is much missed. Normally, when there is legislative matter that calls the noble Lord, Lord Hendy of Richmond Hill, to the Dispatch Box, there is a well-established team that assembles opposite him, consisting of me in my humble capacity and the noble Baroness. It has been a puzzle to me in the course of this afternoon why she appears to have been elbowed aside by the dour but noble Earl, Lord Russell, whose mantra appears to be “Mr No” throughout, whereas now that the noble Baroness, Lady Pidgeon, has landed, if I may say that, at this very late stage in the debate, we find that she is here with her customary positivity and proposals for something useful that the Government might do.
The noble Baroness’s proposal is that the Government might usefully produce a report which tells us what the effects of this measure in front of us are. It would not be an easy report to assemble, and I am sure the Minister will explain its impossibility. It would, however, be no less easy for the Government to produce the report I was asking for, to say what the effect would be on ticket prices, but, as my noble friend Lord Harper so clearly explained, that was ruled out completely by Mr No sitting at the other end of the Bench. It has been most entertaining and instructive this afternoon listening to what the Liberal Democrats have had to say, but we are now in a position where splits within the Liberal Democrats are apparent. I say this to offer some consolation to noble colleagues on the other side of the Chamber to know that it is not only the Labour Party that is riven by dissension and uncertainty about the future and that these qualities can be found among the Liberal Democrats as well. I am delighted—
Lord Hunt of Kings Heath (Lab)
The noble Lord talks about splits. Could he remind me which Government signed this country up to mandatory targets on net zero by 2050?
Lord Moylan (Con)
My Lords, I will go further than that; I will remind the noble Lord which Government introduced this Bill. Nobody on this side of the Chamber has argued today that we should not have a mechanism for supporting the production of sustainable aviation fuel, so the efforts of the noble Lord to stir the pot and look for split-ism on the part of the Conservative Party are completely misdirected, misguided and failed. It would be a great deal better if the noble Lord were to join in with dumping on the Liberal Democrats for five or 10 minutes, because we do not normally take that opportunity—and relish it and seize it and run with it—in the way that perhaps we should.
Now, that said, I was going to try to draw out some interesting points from the speech made by the noble Lord, Lord Berkeley, who is always to be listened to. I learned much, but not enough, from the noble Lord, whose speech I could not immediately tie to the amendment proposed by the noble Baroness, Lady Pidgeon, but he appeared to be saying that a byproduct of HEFA was something called HVO—which also had a long name underneath that—and that this could be used for heating homes. If I understood him correctly—which I may not have—that was the thrust of what he was saying, and he wished to see the Government encourage this in some way or other with yet another form of subsidy. Of course, it would be nice to think that beyond the level of the corner shop there was some scope left for private enterprise and a non-Stalinist, non-directed economy in this country, but none the less the noble Lord has found a further opportunity, another little crack in the economy that has not yet been subsidised, that he feels he should pursue.
But what I want to know is, if this HVO stuff exists and does what I think it does—I may have misunderstood the noble Lord—and if it is true that it can be used for home heating and that it is a by-product, it presumably has a value. That value could be captured in market terms, but where has that been included in the calculation of the levy? Does the counterparty take account of the economic value of the by-products of HEFA that may be used in the market and what is the Government’s position on that?
Lord Hendy of Richmond Hill (Lab)
My Lords, I thought I might constrain myself to discussing the amendment before us. In that respect, I offer my thanks to both the noble Baroness, Lady Pidgeon, and the noble Earl, Lord Russell, who have followed the course of the Bill very closely. I have listened very carefully to everything they said. I am grateful for their scrutiny on this particular subject and I am pleased to have the opportunity to address it in more detail.
I recognise the need for transparent and accessible reporting to monitor the effectiveness of the RCM scheme. I will continue to explore options for reporting on the RCM scheme, including by using existing reporting. For example, we are already publishing statistics on the volume of SAF supplied each year in the UK under the SAF mandate and we will continue to do so. This covers the total volume of SAF supplied to the UK, the fuel type and greenhouse gas savings from the SAF supplied.
The renewable transport fuel obligations statistics and reports, which cover costs and the fuel supplied into the UK, are published regularly. We are taking a similar approach with the SAF mandate. Additionally, a formal review has been incorporated into the SAF mandate legislation, with the initial review scheduled to occur by 2030. This process will facilitate an evaluation of the availability of SAF supply. We will consider further options for reporting, including interactions with the emissions trading scheme reporting on the use of fuel by aircraft. These existing publications will provide an extensive picture of the UK SAF market, as well as the revenue certainty mechanism scheme.
We remain absolutely committed to transparent reporting that is comprehensive, regular and accessible in one location, once the revenue certainty mechanism has contracts in place. In addition to the above, this could include requirements for producers to share information with the counterparty. This would be consistent with how the counterparty for the Department for Energy Security and Net Zero contracts for difference schemes publishes information on contract terms and levy rates. As raised earlier by the noble Earl, Lord Russell, we will include the length of RCM contract terms in our transparent reporting.
The current live consultation on indicative heads of terms for the revenue certainty mechanism contracts proposes potential options. However, we will need to continue to seek views from industry on the mechanism for this reporting, so further work will be required before we can finalise our approach.
In response to my noble friend Lord Berkeley, we continue to work closely with my noble friend Lord Whitehead’s department on the global availability of feedstocks as sustainable fuels. While I cannot commit my noble friend Lord Whitehead to a meeting, I do sit opposite him in our palatial ministerial office upstairs, so I will mention to him my noble friend Lord Berkeley’s interest and I will see what he says.
I hope that what I have said about reporting is sufficient reassurance for the noble Baroness, Lady Pidgeon, not to press Amendment 13.
Baroness Pidgeon (LD)
I thank the Minister for his response and the noble Lord, Lord Berkeley, for his support for my amendment. From listening to the debate, I think I am living in a different world from the noble Lords, Lord Harper and Lord Moylan, who seem to have an unhealthy obsession with these Benches’ and my personal contributions, rather than the Bill before us, no matter how dry it might be.
This amendment and the previous amendment that was discussed are completely different, as the Government have recognised. I am grateful to the Minister for listening and agreeing to the intent of my amendment on the effectiveness of the RCM scheme, which looks to make sure that we have some comprehensive reporting in one place, so that we can understand how effectively this scheme is working.
I thank the Minister for listening and responding to our suggestions in this area—both mine and my noble friend Lord Russell’s—and I beg leave to withdraw Amendment 13.
Lord Moylan
Member’s explanatory statement
This amendment excludes hydroprocessed esters and fatty acids (HEFA) sustainable aviation fuel from the revenue certainty mechanism.
Lord Moylan (Con)
My Lords, in light of the assurances given by the Minister at the Dispatch Box, and the further undertaking that he gave to my noble friend Lord Harper that government policy on this matter would not change unless there were a Statement by a Minister in the House, I do not wish to move my Amendment 15.
Standards in Public Life
(1 day, 4 hours ago)
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Lord True (Con)
My Lords, the problem with this Statement is that it does not address the central question of why the Prime Minister chose a twice-disgraced man, a known associate of a convicted criminal and one of the most repellent paedophiles we have ever known, to be His Majesty’s ambassador to Washington—removing an outstanding career diplomat to make way for a liar and a charlatan.
None of the extensive if rather vague measures set out in this Statement would have had any impact on what happened. The Prime Minister knew of Mandelson’s track record and that Mandelson was still in touch with Epstein, yet he promoted Mandelson. This was a massive misjudgment, as I know the noble Baroness opposite agrees, which has brought disrepute not on this House, as the Statement claimed, but on Mandelson and those who appointed him. It has also deeply embarrassed our country.
The Statement talks about a duty of candour. Can the noble Baroness the Leader of the House tell us what has happened to the public accountability Bill? When will it be brought to your Lordships’ House? In relation to candour, I draw attention to two words in the resignation statement of Morgan McSweeney. The words I refer to are, “when asked”. The resignation statement said:
“When asked, I advised the prime minister to make that appointment”.
Mr McSweeney did not write those words by accident. Who asked him about Mandelson? Was it Mr Jonathan Powell or was it the Prime Minister? Who was it? At Questions today, the noble Baroness, Lady Chapman of Darlington, said that she did not know. Can the noble Baroness tell us? If she does not know now, will she undertake to find out and let the House know?
The Statement and much of the accompanying spin threw out a lot of blame and a lot of political chaff. We have had blame cast on the vetting system. I believe that is a disservice to the highly dedicated professionals involved, but who made the appointment? If the Prime Minister did not have enough vetting information, heaven knows, he is the Prime Minister—he of all people could have asked the security services for more. The noble Baroness, Lady Chapman of Darlington, told the House at Questions that Mandelson was announced as ambassador before the vetting process was completed. Why was that? Was it not considered important?
There is talk in the Statement of more rules on standards. We all want the highest standards in public life but, had the standards that already exist been respected and enforced, we would not find ourselves in this position at all. The problem before us is not absence of rules but absence of judgment. No amount of new bureaucratic architecture can compensate for such a basic failure.
There is talk in the Statement of a
“lack of clarity about the use of non-corporate communication channels”.
I think that is jargon for WhatsApp. My goodness, what would Mr Streeting and the other eager contenders for the Labour leadership do without WhatsApp? Of course, we all agree with Mr Streeting that the Government have
“No growth strategy at all”,
but the Cabinet Office published detailed guidance on these matters in 2023. Was it not being followed by those involved? Can the Minister tell us in what specific respects this guidance in relation to the use of WhatsApp is unclear? What steps are being taken to avoid the intentional deletion and auto-deletion of electronic communications by any special adviser or person involved in these matters? Has guidance been sent to departments?
There is talk of banning second jobs. My personal view is that a politics made up only of professional politicians would be a politics deprived of many insights. Can the noble Baroness the Leader of the House give the firmest possible assurance that there will be no extension of that to this House, which relies so much on outside experience?
The Statement says that the Government will ask your Lordships’ Conduct Committee to reinvestigate rules around the conduct of Peers. With respect, that is a matter for this House and not for the Government. The Conduct Committee carried out a major review of the Code of Conduct earlier this Session, under the expert chairmanship of the noble Baroness, Lady Manningham-Buller. It reached carefully considered conclusions, published barely more than a year ago. I understand that the noble Baroness the Leader of the House has written to the committee seeking further consideration. No one can object to any code being kept under review; that is what we do and have done in this House over the years. However, I hope that the noble Baroness the Leader of the House will assure this House that there will be no pressure from the Government on the committee as it considers her letter, simply on the basis that the Prime Minister wants to close a stable door that he should never have opened in the first place.
We welcome that the Statement reiterates that the ISC will be able to review all documents relevant to this scandal, but can the noble Baroness respond to a question asked last week by my noble friend Lady Finn about the powers inherent in the Justice and Security Act 2013 and the potential influence of the Cabinet Office? What steps are being taken to avoid conflicts of interest or undue pressure in the light of the ISC secretariat being staffed by the Cabinet Office?
The Statement says that the Prime Minister has asked the Cabinet Secretary to liaise with the committee about the documents. Can the noble Baroness confirm the astounding reports today that the Cabinet Secretary is now potentially being removed and may perhaps be a further scapegoat in this sorry affair? Is it true that he is leaving or not?
If there is to be legislation about titles, as is alluded to and which we can certainly, positively, all consider in this House, will the noble Baroness give a clear assurance that there will be full and open consultation across party lines before any legislation is published?
Certainly, it will be a welcome thing if the likes of Mandelson are rooted out of public life, even if at the third time of asking. However, I submit that we should not be stampeded into ill thought-through measures that may trench on the freedoms and privileges of Parliament. Does the noble Baroness agree that the answer is not necessarily to rebuild the system in haste after each failure but to exercise proper judgment at the point of appointment? That is what went wrong in this sorry affair.
Lord Wallace of Saltaire (LD)
My Lords, I must apologise for being a little late; the annunciator was not operating properly in my room. I must also apologise that I am speaking and not my noble friend Lord Purvis. He has been at the funeral of my namesake in Kirkwall today.
I wish to talk about the broader issues in the Statement and, to quote the Statement, about what we need to do
“to rebuild trust in public life in the wake of the damaging revelations”
since the Prime Minister’s Statement last week. We all face the enormous problem now of longer-term decline in public trust in politics in this country and of what this will do to make it decline further. All of us, in all parties, need to resist scoring too many points against each other and to recognise that we have a common task to rebuild that public trust.
I hope that, in that sense, the Government will take this opportunity to push through some of the reforms that the Labour Party and others have talked about but have not yet found the courage to pursue fully. I note, incidentally, that Transparency International has just lowered the UK’s rating in its Corruption Perceptions Index, which is now much closer to the American level than to the level of most European democracies. That is where we are. So I hope the Government will take this opportunity to introduce significant reforms, which we hope will command cross-party support.
I hope that these will include parliamentary scrutiny for all senior public appointments. The noble Baroness, Lady Chapman, this afternoon hinted that His Majesty’s Government are already moving in this direction. Too much power and decision-making is concentrated in Downing Street. We all recognise that the Prime Minister has too many decisions to take. Parliamentary sovereignty is a convenient myth that covers Executive domination. Political decisions and appointments would be much more acceptable if government change were approved by Parliament.
Then we need to strengthen the guardians of ethics in public life. We need the Commissioner for Public Appointments, the Advisory Committee on Business Appointments, and the Independent Adviser on Ministerial Interests to be strengthened in their roles and perhaps given a statutory basis. We need to look at the status of the Ministerial Code, and please can we have the delayed publication of the revised Cabinet Manual, last revised far too long ago?
We need to consider whether the business of taking office for the Prime Minister and for Ministers should be changed, and whether they should take an oath, perhaps before their House of Parliament, as they take office? Maybe they should receive training. Most immediately, I hope that the Government will now bring in a strong elections Bill, with caps on donations, defences against foreign, state and private donations, and a properly independent Electoral Commission.
There are broader reforms which the Liberal Democrats would like to push for to move away from the confrontational style of Westminster politics: fewer Ministers, looser Whips, stronger committees, acceptance that multiparty politics means a more collaborative style of politics. I heard Andy Burnham, the Mayor of Manchester, say last week at the Institute for Government that a change in the voting system would make our politics less adversarial. I hope there are some within the Government who are considering that.
There are particular implications of this scandal for the Lords, for which the Labour Government have not yet delivered half of the reforms their manifesto promised. This has damaged the reputation of the Lords, and that means that we have to take those reforms further. We are a part-time House, so the question of outside interests and second jobs, which the noble Lord, Lord True, touched on, is much more difficult for us. Prime ministerial patronage on appointments should also come into consideration. Donors should not be appointed to the Lords, which is a working Chamber. There is a strong case for rules on outside interests and for retirement and participation limits, and we look forward to receiving those.
Lastly, does the Leader agree that the widest lesson we have to take from this is that it is not only politicians who need to regain public trust but those who run international finance: banks in New York and London, multinational companies and high tech? Most of these are based in America, but I note that the CEO of the bank which paid for my education and at which my father worked for 40 years is one of those named in the Epstein files. We should not underestimate the scale of the potential public reaction against financial as well as political elites. Will the Government therefore discuss with the City of London how it, too, needs to react to what is now coming out and what will no doubt continue to come out for some weeks to come?
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
My Lords, I am grateful to both noble Lords for their questions. I understand why the noble Lord, Lord Wallace, was unusually able to contribute despite being late. He was only a couple of seconds late, and obviously I understand that the noble Lord, Lord Purvis, is at the funeral today in Orkney.
The Prime Minister has said that this was a wrong decision. He has been clear and honest about that and he has apologised. He has been clear that he was lied to by Peter Mandelson when questions were asked. He feels the sense of betrayal that a number of people feel about the answers that were given and about the trust that was broken. More importantly, when the Prime Minister apologised to Parliament, he also apologised to the women and girls who were victims of Jeffrey Epstein. If we do not keep them at the forefront of our minds, we do not learn any lessons and we do a disservice to them. Because of what has happened with Peter Manderson, they have relived this, and the impact that has had on their lives and continues to have going forward is something we have to be very aware of.
This was a betrayal on an almost industrial scale. I doubt many of us have read all the messages, but some messages were being sent in real time to Jeffrey Epstein on sometimes very sensitive matters of public policy. That is a betrayal not just of friends and colleagues but of the Government and the country, and we all take that seriously. This is not just about Peter Mandelson’s friendship with Jeffrey Epstein. These were rich, influential, powerful people, mostly men, who used their power to use and abuse young girls, often almost in plain sight. I find that unsettling and deeply shocking. This scandal went on for so long, and yet again those who were abused were not believed. There are lessons to be learned from that.
Both noble Lords raised the question of what happens next. The noble Lord, Lord True, asked about the public accountability Bill. That is being worked on at pace to get things right, and the Prime Minister has made his personal commitment to that clear. The noble Lord also asked about the vetting system and said that blame was being pushed on to it. No, but the Prime Minister has said it was a wrong decision, and he takes responsibility for that and has apologised. But if we are saying that the vetting system cannot be improved, it was the same vetting system that had been used in every other case, although clearly, lies were given to the Prime Minister. But changes are being made to a system whereby it is after an appointment has been undertaken that full vetting, as opposed to due diligence, is undertaken, for now and for the future.
The noble Lord, Lord True, seems to think that the only non-corporate communication channel is WhatsApp. This has been visited by numerous Governments over years. Non-corporate communication channels are anything that is not the approved channel. Having been in government, he will have had a particular email address and a particular device he could use. I am told that back in the day, it was quite common for people to share emails on their BT email addresses. That is wrong, so over the years guidance has been given and will continue to be updated.
The noble Lord also asked about second jobs for MPs. Of course, it is a completely different issue. Anyone in this House who has been a Member of Parliament, and I see several, will know that it is a full-time job. This has been looked at in the past and it will be looked at again. It is different for your Lordships’ House, in that Members have outside interests they pursue. But there is also the issue of transparency and lobbying, which was mentioned, whereby Members cannot profit from membership of this House. There is no issue at all about Members having outside interests and outside employment, but there is an issue if the two become conflated and Members use membership of this House in order to profit from it. Lobbying Members, if employed by a lobbying firm, and those kinds of issues are ones the House would like to address. I am glad the noble Lord indicated his consent on that.
The noble Lord also asked about the ISC and the relevant documents. I am not quite sure what he was getting at. I think he was suggesting that, because the ISC is serviced by the Cabinet Office, somehow it does not have independence. The members and the chair of the ISC may feel very differently about independence and how it operates. I hope he was not suggesting that. I cannot give him any further information on the Cabinet Secretary; I do not have that information. If there is any information, I will of course update noble Lords.
The noble Lord asked about legislation to remove peerages and whether there would be full and open consultation. I was clear in this House last week that there would be. The noble Lord and I have discussed this privately as well, and I assured him of that. I do not know if he is uncertain about it, but for something that will have an impact beyond the current circumstances, I would want to ensure that this House was content with what it did, and that we were content that it would deal with any future circumstances where the House may think it appropriate that, because of someone’s behaviour—if they were expelled from this House, for example—they would not be entitled to continue to have a peerage.
The noble Lord, Lord True, said that we should not be stampeded into changing the laws. Of course no one is going to be stampeded. We have a proper process in this House: it is called legislation, and that is how we take things forward. In terms of the Conduct Committee, I shared the letter I sent to the noble Lord, Lord Kakkar, with the noble Lord, Lord True. There is no undue influence, but the whole House would want to be assured that we are confident that our rules, processes and procedures do the job they are supposed to do to give Members of this House guidance and confidence, and to give the public confidence in our work as well.
The noble Lord asked a number of questions. He had a bit of a shopping list, I am afraid, of various things that could be done, and I have probably been receiving two different sides of the argument here. This House knows that a number of things should be done about our processes. The Prime Minister has already updated the Ministerial Code so that the independent adviser can make decisions on his own about whether or not to investigate an issue. There are a number of things that have to be done, but at the bottom of this is that we have to ensure that we are above reproach and that we give confidence to the public that we do the work that we are here to do, without fear or favour, and with the spirit of the country’s interests at heart.
Lord Harper (Con)
My Lords, on 27 December 2025, the Sunday Times reported that the now noble Lord, Lord Doyle, had campaigned for Sean Morton after he was charged with child sex offences. The Letters Patent were not sealed until 13 January this year, so for 17 days the Prime Minister supported the process of conferring a peerage on someone who had continued an association with a known paedophile. That process of backing the noble Lord, Lord Doyle, continued until today, when the Whip was removed and an investigation has commenced. Does the Leader of the House support the removal of the peerage from the noble Lord, Lord Doyle, just as the Prime Minister has suggested should happen to Lord Mandelson?
Baroness Smith of Basildon (Lab)
My Lords, in all these things there needs to be a proper process. There is an issue around due diligence on Members being nominated from all parties; we all have to ensure that we have the right processes in place. The noble Lord, Lord Doyle, was approved by HOLAC on the information that it had available at that time. He now no longer has the Labour Whip and there will be an investigation.
I do not really want to get into speculating, when I do not know enough about the details, on whether an individual should have the Whip or peerage removed, but we have to ensure we have the ability to do that, which we do not at the moment. As we bring forward legislation on that issue, I will consult with noble Lords about the circumstances in which we think it is appropriate that someone should not be a Member of this House and, ideally, not have a peerage either.
Baroness Falkner of Margravine (CB)
My Lords, the noble Baroness is right about the importance of the public having confidence in this House—indeed, in both Houses, but we are particularly concerned with this one—and I support her endeavours to achieve that. On the point just raised and on HOLAC—we have discussed vetting procedures as well—is there going to be an attempt in the review to find out what measures need strengthening with HOLAC so that impropriety can be brought to its attention? What I am specifically referring to here is this. If HOLAC has a name, and the name gets published by No. 10, and then information comes to light, can that preliminary announcement be exactly that—preliminary—with the ability for HOLAC to withdraw its consent once further information comes to light? Will she please look at that?
Baroness Smith of Basildon (Lab)
I am not aware that that is the case at the moment. Once HOLAC has made a recommendation on the information that it has, the case is not normally reopened. However, I take the point that the noble Baroness makes. All these things are in the mix to be looked at, to ensure that we in this House can be confident of appointments that are made to this House and how those appointments reflect on it.
Baroness Falkner of Margravine (CB)
I am so sorry, but I have to apologise to the House. I needed to have declared an interest. I spoke last Wednesday on a Question on think tanks but did not declare that, the previous Monday, I had become a fellow of the think tank Policy Exchange. I have apologised to the Minister, who is sitting on the Bench, and to the Government Chief Whip, and I apologise to the House for that error.
Lord Young of Cookham (Con)
My Lords, I wish to press the Leader of the House on what she said about legislation concerning your Lordships’ House. I welcome what she has just said about full consultation and the legislation not being rushed through, but, yesterday, the Chief Secretary to the Prime Minister, referring to this legislation, said:
“We will bring the legislation forward very, very shortly”.—[Official Report, Commons, 9/2/26; col. 573.]
Is that compatible with what the noble Baroness has just said about full consultation? Is it her intention to try to get the legislation through all stages before the end of this Session?
Baroness Smith of Basildon (Lab)
No, not this Session of Parliament; I do not think that is appropriate for the kind of legislation that we are talking about. I think the Chief Secretary to the Prime Minister was saying that we want to move at pace on this, so that we have something that Members can look at. It is not something that we want to delay unduly, but it will go through the normal processes of Parliament. I have already given assurances to the noble Lord, Lord True, and other noble Lords that we will consult on this. It will not be a consultation that goes on for months and months, because we want to ensure that we have the legislation in place in good time, but there is a balance between working at pace and getting it right. The noble Lord, Lord Young, is smiling at me, but I can tell him that there is an urgency about this matter, and that is reflected in Darren Jones’s comments. I hope we soon have a draft that we can begin talking to noble Lords about.
Lord Watts (Lab)
My Lords, I think the whole House will welcome the Leader’s Statement and the measured way in which she has delivered it. However, there are still scandals here. It is not just Peter Mandelson. There is a Baroness in this House who has ripped off the taxpayer by millions of pounds, and she is still a Member of this House. We need to find a way to remove her.
Baroness Smith of Basildon (Lab)
My Lords, I think the noble Lord is referring to the noble Baroness, Lady Mone. That comes back to the point I am making that the House wants to assure that it has the processes in place. The noble Baroness is at present on a leave of absence, which I do not think is a satisfactory position. I do not want to rush to judgment on any individual, but we need to have processes in place so that we can then act when any cases are brought to the attention of this House, or when we wish to do so. At the moment, there is no process in place at all for a Member to have a peerage removed, and the processes by which Members can be expelled from this House are rather limited. I can think of only one case in my time in this House when it was felt that a Member should be expelled, so we need to look at our processes.
We also need to be clear that I am confident that the overwhelming majority of Members in this House behave absolutely properly, with due diligence to their own affairs, and are here only because they want to serve the public and play a role in public life. We need to emphasise that. But where people fall short of those standards, are we confident that we have the right processes in place to take action where it is needed?
Baroness Laing of Elderslie (Con)
My Lords, the whole House will undoubtedly agree with what the Leader of the House has just said and will welcome her commitment to transparency and candour. When we discussed these matters in the Chamber last Thursday, I had the opportunity to ask the noble Baroness about the letter that had been written to the Prime Minister by his predecessor, Gordon Brown, one year ago, when he was asking about
“the veracity of information contained in the Epstein papers regarding the sale of assets arising from the banking collapse and communications about them between Lord Mandelson and Mr Epstein”.
I asked the noble Baroness:
“Did the Prime Minister know that his predecessor had made that request of the Cabinet Secretary? If he did not know, why was he not told? And if he did, why did he not instruct the Cabinet Secretary to undertake the investigation?”
The noble Baroness politely answered that she did not have those answers. She said:
“I do not know at this stage what the former Prime Minister asked for and whether the Prime Minister was informed, but I will find out”.—[Official Report, 5/2/26; cols. 1738-39.]
I appreciate that that was only on Thursday and this is Tuesday, but I wonder whether she has had the opportunity to find out and whether she can now answer the question.
Baroness Smith of Basildon (Lab)
I assure the noble Baroness that as soon as I know, she will know. I have not been able to get an answer in this short time. We have asked the question. I am not clear whether it was a letter from Gordon Brown to the current Prime Minister or what form that request took, but we are looking at that at pace to see whether we can get an answer, and I assure her that we will do so.
Baroness Royall of Blaisdon (Lab)
My Lords, I hesitate to rise because I was slightly late, but as the noble Lord opposite was late—my Whips are saying that no, I cannot.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
I am so sorry. The noble Lord was a few seconds late, so he was within the timetable.
Lord Hunt of Kings Heath (Lab)
My Lords, I thank my noble friend. Coming back to the issue of legislation and the need to ensure that there can be expulsion of Members in these circumstances, would she also accept that the expulsion of a Member is a very serious matter indeed and that, clearly, there need to be safeguards to ensure that this is not used in a perverse way by any future Government? In that regard, and given the need for urgency, I ask that there is an opportunity during the consultation process for Members of your Lordships’ House to actually debate the question so, I hope, we can reach a consensus on this.
Baroness Smith of Basildon (Lab)
I am grateful to my noble friend. We are not bringing forward legislation for the expulsion of Members from your Lordships’ House; that is a matter for our Code of Conduct, and I am seeing the noble Lord, Lord Kakkar, this week, and I wrote to him about that particular point. We will consult with Members, but there will be the normal process of legislation going through. The legislation I have spoken about concerns the circumstances in which, for example, somebody expelled from this House would not retain their peerage. That is what the legislation is about, not expulsion from this House; that is a matter for the Code of Conduct.
We have to ask: are we satisfied that, in all cases, we have got the Code of Conduct right? I take the point made by the noble Lord, Lord True, that it has been reviewed. I see no reason why, if other matters are brought to the House’s attention, specific issues cannot be looked at. I have had several representations more recently on other issues where Members have felt that the Code of Conduct has not been fully implemented. If you look at the Code of Conduct, often the commissioners wait until a complaint is made to them. Members have to be aware of what is in the Code of Conduct and at all times have that in mind and ensure that we are behaving with absolute integrity in relation to that. There are a number of things I think we can review, but the legislation is specifically on removing a peerage from somebody, not on expulsion from this House.
Baroness Andrews (Lab)
My Lords, I thank the Leader for the way in which she introduced this Statement on this very serious situation. I want to pick up a point made by the noble Lord, Lord Wallace. In his raft of suggestions, he made one which I think is particularly important, which is the revision of the Cabinet Manual, which is well out of date. The Constitution Committee has drawn attention to the delays in updating the manual, which I think would address many of issues of protocol and procedure and tighten the whole situation within the Cabinet Office. Perhaps my noble friend could pay particular attention to where that process has got to and try, given the notion of urgency which she has addressed, to see whether that could be expedited.
Baroness Smith of Basildon (Lab)
I am grateful to my noble friend. I think it was last updated in 2011. My recollection is that even then its introduction was mainly about Brexit, which seems rather dated at this time. I cannot give any guarantees that it is an urgent issue at the moment, but I take on board what she has said. I think there is a need to ensure all these codes are updated and reviewed because they are a point of guidance to help us navigate our way forward when there are difficult issues.
Lord Sentamu (CB)
My Lords, I want again to thank the Leader of the House for the way she is conducting this conversation. I am also grateful to the noble Lord, Lord True, for his penetrating questions because only by tough questions do you get the answers, and those answers of course need to be questioned still.
In the country I was born in, Uganda, we have a saying that a very badly misbehaved child brings disrepute to the parents first, then to their brothers, their sisters, and the whole of the household, but you must not think there is a transference of the behaviour of that naughty child to everybody in the household. Certainly, we must be vigilant, but we must not drive ourselves into thinking that, because of the bad behaviour of somebody, everybody is just like that. The people that I have met since I joined the House in 2005 are mostly honourable people. They do their work, they carry it out at all hours, particularly of late when we have been sitting until very late in the morning, and none of them is actually doing it out of self-interest. We have just had our conduct reviewed by the noble Baroness, Lady Manningham-Buller. That is very robust. Please do not reinvent a similar thing as if we have not got it; we need to tell everybody out there that we have it.
Finally, I think the noble Lord, Lord Wallace of Saltaire, is right: in all our debates, however heated they are, may we try and be polite to each other and ask questions; we are part of the same household.
Baroness Smith of Basildon (Lab)
My Lords, when I first came into this House, I was told, pretty much, you could say anything you wanted as long as you were polite about it. That is actually quite a serious point. I think sometimes the tone of our debate and the politeness that we deploy when speaking lower the temperature, so we do not get the rudeness that we see in some other political forums.
On trust in public life, it is the bad apple syndrome, is it not? One person does something wrong and we are all tarred with the same brush: people think, “You’re in it for yourselves; you don’t believe in what you’re saying”. Yet we know that most people—the overwhelming majority of people in your Lordships’ House, as I said earlier—are here because of public service and they believe in what they do. As the noble Lord, Lord Wallace, mentioned about trust in public life, we do have a duty. The noble and right reverend Lord is right that we have a Code of Conduct and we should stick with that, but if he is asking me whether there is no area in it which can be reviewed and possibly improved, then I think, yes, we should say it can be reviewed and there is always room for improvement.
I take issue with the noble Lord, Lord Wallace, on one point, though. When he was speaking earlier, he described this as a part-time House. We are not a part-time House. We do not expect all Members to be here full-time; it is a full-time House where Members contribute when they can. I always wince slightly, when we sit longer and later than the other end of the building, that we should ever be called part-time.
Lord Harris of Haringey (Lab)
My Lords, I certainly echo that final point and I suspect many of us regard this as a full-time House, in addition to which we do lots of other things, so it becomes a double full-time House from that point of view.
This is a very wide-ranging Statement, and a fairly eclectic range of questions have been asked by your Lordships. I would like to pick up just two points. First, there is sometimes a collective desire to rush forward in judgment about individuals. Sometimes those individuals perhaps deserve that judgement, but we must surely—and I hope the Leader of the House will confirm this—make sure there is proper due process about any decisions being taken about any individual in this context. Secondly, she has expressed the view that the Cabinet handbook and the guidance and so on are long overdue an overhaul, and I think many of your Lordships would welcome that. Could she also say what she thinks is the appropriate level of core skills and training that should be given to Ministers and prospective Ministers?
Baroness Smith of Basildon (Lab)
The due process point is important—I have tried to come back to that several times during the answers I have been giving this afternoon. That is why I declined to answer in detail the question from the noble Lord, Lord Harper, as well. There has to be a process in place so that, whatever the circumstances, we know the route to take. My noble friend is absolutely right to say that, and that is why I wanted to comment on some of the questions more thoroughly.
Core training is really interesting. I have been put in charge of training for Ministers. I am not aware of any core training for Ministers; other noble Lords who have been Ministers may think differently. It can be a bit patchy. Sometimes there is very good training. I remember having resilience training and crisis training in the past. I have had other issues where we have had to look in detail and see how we might react in certain circumstances. It is one of those jobs where there is no blueprint and Ministers do it differently depending on the job they have and the role they have. But one of the things I would advise any new Minister to do is to talk to somebody who has done the job before, from either party, because I think you would always get good advice from people who have experience.
Baroness Barran (Con)
My Lords, we have heard a lot of talk this evening about trust in public life. There are two aspects of trust that I would be grateful if the noble Baroness could comment on. There is obviously the terrible betrayal of trust that we have seen recently in the case of Lord Mandelson, but I would like her view on a different kind of trust—the trust in our Prime Minister’s judgment. We have had too many examples, from the very early days in government of accepting gifts—which any of us, without process or training, could have said was a poor choice—to the turnover in appointments within No. 10. What would the noble Baroness say to the general public, who are questioning how long they can trust this Prime Minister’s judgment and whether saying sorry is enough?
Baroness Smith of Basildon (Lab)
My Lords, I have worked with the Prime Minister for a long time—since he first came into Parliament in 2015. I see a man of integrity and decency—a man who makes mistakes, owns those mistakes and seeks to make them right, and who is not afraid to apologise. I have not seen that in every Prime Minister.
The reason why the entire Cabinet yesterday made it very clear—as if there should ever have been any doubt—that it supported the Prime Minister was that we see him day in, day out. We see the judgments he makes day in, day out. If you look at what is happening in the world today—what is happening in Ukraine and the Prime Minister’s relationship with President Zelensky, how he has to manage difficult situations across the world, how he has proved to have a leadership role across the world and how he is regarded—you realise that he is absolutely the right man for the job. He made the statement yesterday that he had a mandate from this country to deliver change and the policies that we fought the last election on. I am impressed and I admire him. Whatever happens, he will deliver on that mandate.
Scotland Act 1998 (Modification of Schedule 5) Order 2026
(1 day, 4 hours ago)
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Baroness Smith of Cluny
That the draft Order laid before the House on 17 December 2025 be approved.
Relevant document: 48th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Advocate-General for Scotland (Baroness Smith of Cluny) (Lab)
I thank the noble and learned Lord for his amendment and his engagement with me on this matter. I understand the concerns he has raised. However, the Government believe the approach they have taken is appropriate and in keeping with the devolution settlement.
As with all the Scotland Act orders we have considered since the start of this Parliament, this is the result of close collaborative working between the UK and Scottish Governments. The order before us will be made under Section 30 of the Scotland Act 1998, which provides the power for the legislative competence of the Scottish Parliament to be altered. Specifically, it enables modifications to be made to Schedule 4 or Schedule 5 to the Scotland Act 1998.
Orders made under this provision are subject to the affirmative procedure in both the UK and Scottish Parliaments. The order was considered by the Scottish Parliament and considered in the other place earlier today. I welcome the opportunity to set out to the House the purpose of the order. I will explain what it does, what it does not do, and why it is the best way of proceeding with this complicated matter.
The Assisted Dying for Terminally Ill Adults (Scotland) Bill is a Member’s Bill introduced by Liam McArthur MSP and is currently before the Scottish Parliament. It seeks to create an assisted dying regime in Scotland. I am keenly aware of the sincerely and strongly held views on this topic. I would like to emphasise that the UK Government remain neutral on the matter of assisted dying. It is a matter for MSPs in the Scottish Parliament to determine whether there should be an assisted dying regime in Scotland.
The Scottish Government identified areas of this Bill as being outside of legislative competence and, as such, requested a Section 30 Scotland Act order from the UK Government. This was in respect of substances and medical devices which may be used for an assisted dying regime in Scotland. They requested a Section 30 order specifically as they considered that such provisions are a fundamental element of the regime the Bill seeks to introduce. The UK Government considered the request carefully and, following engagement with the Scottish Government, concluded that making a narrow, time-limited Section 30 order would be the most appropriate action.
This approach enables Members of the Scottish Parliament to consider the Bill with clarity as to how the matter of substances and devices could be dealt with, while protecting reserved matters, including medicines regulation. This Section 30 order is time-limited in nature to reflect the circumstances of this Scottish Parliament Bill and the upcoming Scottish elections in May. This time limit applies to the legislative competence of the Scottish Parliament, but this will not affect the future exercise of any regulation-making functions conferred by the Bill beyond 7 May 2026, should the Scottish Parliament determine to do so. The order has been specifically designed to ensure that the Scottish Parliament can create an overall framework for medicines and devices to be used in an assisted dying regime, should they decide to do so.
I am aware that the content of this order has prompted queries about the approach the Government have taken: first, why the Government have taken forward a Section 30 order and not, for example, a Section 104 order; secondly, the scope of this order and the matters which are not included; and thirdly, the likelihood of other orders being brought forward under the Scotland Act 1998 in due course, including possible Section 104 orders.
The Secondary Legislation Scrutiny Committee, which considered the order, as well as the Scottish Affairs Committee in the other place, both raised these points. I take this opportunity to thank them for their scrutiny. Before I deal with the specific issues in detail, I would like to set out the guiding principles that underpin the Government’s approach to this matter. Relying on these has framed and informed our decision to proceed as we have.
There are five principles. First, we are not seeking to alter the devolution settlement with Scotland any further than is necessary to deal with this specific issue. Secondly, the UK Government maintain their neutral stance on assisted dying and do not endorse any particular outcome of the consideration of the Bill before the Scottish Parliament. Thirdly, in supporting the proper functioning of devolution, we should put MSPs in a position to be able to vote on a coherent proposal in the devolved matter that is the subject of that Bill. Fourthly, it is in the interests of all the citizens of the UK for our regime regulating medicines and medical devices to be a UK-wide scheme, delivered in a consistent way in all parts of the country. Fifthly, it is the responsibility of the Scottish Government to ensure that the Scottish Parliament legislates within its competence; it is not the responsibility of this Government.
Relying on these principles, I turn to the detail of the Section 30 order. I am very conscious that the regret amendment tabled is as interested in what is not in the order as it is in the order itself. In setting out the Government’s reasoning, I hope to deal with these concerns, as well as explain why a Section 30 order was thought appropriate.
To provide some context, it may assist to briefly set out the issues that have been raised around legislative competence concerns. There are three: first, the regulation of medicines and medical devices; secondly, the regulation of the medical profession in delivering a scheme, including considerations of training and experience; and, thirdly, the position of the medical professionals who may not wish to take part in the scheme, and the appropriate employment protections they may require.
Lord Keen of Elie
At the end to insert “but that this House regrets that the draft Order is drawn too narrowly, such that the modification of Schedule 5 to the Scotland Act 1998 would be insufficient to render the Assisted Dying for Terminally Ill Adults (Scotland) Bill fully within the legislative competence of the Scottish Parliament.”
Lord Keen of Elie (Con)
My Lords, I am obliged to the Minister for engaging with me on this topic. To be clear at the outset, we are not concerned with the merit, or otherwise, of the content of the legislation in question. However, this raises a somewhat technical issue with regard to the devolved settlement.
I begin with a general résumé of where we are regarding the devolved settlement. Schedule 5 to the Scotland Act 1998 contained expressed reservations to the United Kingdom Parliament. They were very carefully and deliberately identified as areas where it was appropriate that there should be UK-wide legislation, rather than devolved legislation, touching upon certain fundamental and important matters.
The Minister has mentioned medicines and medical devices, as contained in paragraph J of Schedule 5, but that does not sit alone. The regulation of all the health professions and the medical professions is expressly reserved in Schedule 5, as is the matter of employment law, for the very simple reason that uniformity within the United Kingdom was thought important and to take precedence over the desire for devolved competence.
There is a provision in Section 29 of the Scotland Act which makes it clear that, if the Scottish Parliament passes legislation that is not within devolved competence, it is not law. It is as simple as that. The competence of the Scottish Parliament can, of course, be extended by Section 30, and we have heard reference to a Section 30 order. That is an unusual mechanism, last used more than 10 years ago in respect of the referendum on independence. Moreover, it is not a mechanism that has ever been used before in respect of a Member’s Bill. Within the Scottish Parliament, what we understand as a Private Member’s Bill is referred to as a Member’s Bill. In addition, within the Scottish Parliament, when referring to a Bill, one refers not to clauses but to sections; I hope that noble Lords will bear with if I adopt the appropriate references in dealing with this matter.
Interestingly, this is also a Bill in respect of which the Scottish Government have declared themselves neutral. We are being asked to grant a Section 30 order extending devolved competence to a Member’s Bill in respect of which the Scottish Government have declared repeatedly that they are entirely neutral.
Section 30 does and can be used to extend devolved competence for the purposes of passing legislation in the Scottish Parliament. That has to be contrasted with Section 104 of the Scotland Act, which can be used to extend the range of a competent piece of legislation that has already been passed by the Scottish Parliament. In other words, if the Scottish Parliament has competently passed legislation but would wish to see it extended into reserved areas, the Secretary of State of the UK Parliament can make an order under Section 104, so extending the relevant legislation.
A simple example would be where the Scottish Parliament passed legislation for the recognition of gender certificates for 16 year-olds. That was a proposal which came to grief for other reasons. If it had wanted to see that legislation, with those certificates recognised by registrars in England and Wales, it would have required a Section 104 order from the Secretary of State in order that the Scottish legislation could be extended. It is important to keep in mind the distinction between Section 30 orders, which will allow an extension of devolved competence in order that the Scottish Parliament can pass legislation that is then competent and is then law, and the situation in which it is extended after it has been passed by virtue of a Section 104 order.
A Section 104 order cannot make competent a piece of legislation that is not within devolved competence. If the Scottish Parliament passes an Act that is not within devolved competence, then, as I mentioned earlier, it is not law and it cannot be made law by the Secretary of State making an order under Section 104. To give perhaps a poor analogy, if the legislation from the Scottish Parliament is competent but rather sick, it can be made well by a Section 104 regulation. If the legislation passed by the Scottish Parliament is not law—if it is dead—it cannot be brought back to life by a Section 104 order.
We are dealing here with a Member’s Bill in the Scottish Parliament which deals with the regulation of the health professions—the medical professions—in order that they can assist people to die. We are concerned with the regulation of medical substances in order that they can be lawfully administered by medical professionals to assist people to die.
Lord Falconer of Thoroton (Lab)
Can the noble and learned Lord explain what he means by that? I think he is saying that there is no impact assessment of the effect of the regulation of devices and substances being in Scotland rather than England. That is all that paragraph 9 deals with.
Lord Keen of Elie (Con)
No, I am saying that there is no impact assessment in respect of the effect of this legislation in Scotland on the regulation of the medical profession, which is also an expressly reserved matter under paragraph G2 of Schedule 5 to the Scotland Act 1998. Because that will be impacted by virtue of this Section 30 order being granted to the Scottish Parliament, that ought to be a consideration in this context.
Lord Falconer of Thoroton (Lab)
I think the noble and learned Lord misunderstands what is being said here. It says that there is no impact expected in allowing the Scottish Parliament to be the body that allows regulations to be entered into in relation to devices or substances. That is all that is being said here.
Lord Keen of Elie (Con)
That is my very point, with the greatest of respect, because the reserved matters are not just medical devices but regulation of the medical profession. Therefore, the very fact that it is such a narrow order means that the relevant impacts of this Section 30 order and of the legislation, assuming it is competent and passes, have not been properly addressed in this context.
Lord Falconer of Thoroton (Lab)
It is an impact assessment only of this instrument, not the Scottish legislation.
Lord Keen of Elie (Con)
I am underlining the narrowness of this instrument and what it omits. It omits to address properly the effect of passing this legislation through the Scottish Parliament as a consequence of the Section 30 order.
I have sought to make this as clear as possible for at least some of your Lordships. In my respectful submission, this is a situation in which the Government should think again about the course of action they propose to adopt. I therefore express my regret with regard to this instrument.
Baroness Coffey (Con)
My Lords, I have a few questions for the Minister. My noble and learned friend Lord Keen has set out pretty eloquently the issue of the narrowness, and the House will be aware that one of the elements of Section 30 orders, and indeed of a variety of subordinate secondary legislation, is that they cannot be amended. As has been pointed out, one thing that is not covered and not clear in the Section 30 order—although the Government have indicated that it will be in the Section 104 order in order to enact the Bill, if the Members of Scottish Parliament decide to go ahead with it—is how, in effect, that will happen. Instead, a number of questions are raised. For example, the MHRA response pointed out that, if this does go ahead, the UK Government and the regulator want this to be one process that would happen throughout Great Britain.
This is a novel approach—this is the first time this has happened—and I am trying to understand whether, if a Scottish Minister puts forward regulations in light of the Section 30 order, it will require the specific agreement of the UK Government Ministers: the Secretary of State for Scotland. The other way around is that the Scottish Parliament hands over powers to the UK Parliament to decide how a Bill it asked for will be enacted. So we are in this novel situation.
I am interested to understand from the Minister how they got to this point. I know that she set out the narrowness, not going beyond devolution, but when this was debated in the Scottish Parliament in May 2025, Scottish Government Ministers said that they would start a discussion with the UK Government. It is my understanding that actually, the Scottish Government wanted a far wider Section 30 to cover the specific issues my noble and learned friend Lord Keen pointed out.
If we put ourselves in the feet of the Members of the Scottish Parliament, if this goes ahead today, as they get to their stage 3, they will start to remove lots of pieces of the Bill that currently sit in that Bill and then hand over, in effect, the decision on how any of this can be implemented to the UK Government and, subsequently, the UK Parliament. It will not be able to be amended by the UK Parliament, but the UK Government can do what they like. So it would be useful to get an understanding of whether there is a memorandum of understanding that could be shared. Is there any correspondence that could be shared between the two Governments, given that both Governments say that they are neutral on this Bill? If they are neutral on the Bill, how do we know what process they are going to undertake to deploy this in future?
Baroness Smith of Cluny (Lab)
I am grateful to noble Lords for their contributions to this debate. I will respond to the specific points raised, but first I mention four overarching points that are important to hold in mind in this debate.
It is for the Scottish Parliament, not the UK Government, to ensure that when it legislates it does so within its competence. That means that our role, in respect of that legislative competence, is necessarily responsive and not proactive. Had we failed to respond to the request made by the Scottish Government, it is our view that MSPs would have been in the position of having to consider whether to vote for an assisted dying scheme without knowing what fundamental parts of such a scheme would entail—in this case, the medicines and devices to be used. While the Government are neutral on the issue of assisted dying, they are not neutral on the issue of devolution. We believe in the proper functioning of the devolution settlement. To have denied this order would have been to deny Scottish MSPs the opportunity to make law in a devolved area, with a clear understanding of how that law would operate. This is not a debate on the issue of assisted dying but it is a debate on the devolution settlement and whether this House is prepared to afford the Scottish Parliament the respect of legislating in the devolved area of health in a coherent way.
I turn to address the specific issues raised, dealing first with the queries of the noble and learned Lord, Lord Keen. He told us that a Section 30 order had last been used with reference to the independence referendum. That is not quite right, although it was round about the same time. It was last used for the reduction of the voting age in the Scottish elections to the age of 16. However, I do not demur from the point that it is unusual—16 have been used since devolution was introduced, and I do not shy away from that. The noble and learned Lord pointed out that it had never been used for a Private Member’s Bill, which is also right. It reflects the particular and unusual circumstances in which we find ourselves, with a Private Member’s Bill and two Governments who are neutral on the issue. It has been a challenging process.
The noble and learned Lord, Lord Keen, tells us that the Bill may not be competent and, if so, will not be law if it is passed without the two further matters of legislative competence questions that I referred to when I set out the relevant matters. These, as I understood the noble and learned Lord to identify them, were the regulation of professions and employment matters.
The difference of opinion really comes down to an analysis. As the noble and learned Lord puts it: what is the purpose of the Bill when one assesses whether or not it falls within competence? That is right. It comes down to an analysis of what you regard as fundamental to the assisted dying regime and what is not. It is this Government’s analysis that the regulation of medicines and devices is fundamental to the scheme, such that it would not be fair to ask Members of the Scottish Parliament to vote on a scheme when they did not have certainty about how that matter would be dealt with. However, it is also our assessment that questions of employment law protections and questions of the regulation of professions, around training and experience, are consequential matters to the regime. They are not of the essence of the scheme; they are consequential matters which can be dealt with after the Bill has been passed and becomes an Act. That is simply a difference of opinion on the analysis of what is fundamental to allow the regime to exist.
The noble and learned Lord also complained that the power given to the Secretary of State is too great and, I think I understood him to say, constitutionally novel and certainly constitutionally problematic. We should remember that the Scottish Government have agreed to this, because they agree with us that some matters are so fundamental that they should be regulated and dealt with on a UK-wide basis for the benefit of all citizens of the United Kingdom.
The noble and learned Lord also asked why we do not simply extend the Bill proceeding through the UK Parliament. I am sure he will appreciate that the Government’s neutral stance means that they are not in a position to lay amendments to a Private Member’s Bill.
On eligibility for the scheme, the noble and learned Lord raised what would happen if the Bill in the Scottish Parliament is passed but the Bill in the UK Parliament is not. This is not a matter for consideration today. That is not what this debate is about; it is about a narrow Scotland Act order. I encourage the House to retain focus on that. This debate is about the devolution settlement, not assisted dying schemes. I also note the discussion he had with the noble and learned Lord, Lord Falconer, and would make the same point that this is not the forum for a discussion about the impact of assisted dying regimes. This is a devolution question.
I will now deal with some of the points raised by the noble Baroness, Lady Coffey. I genuinely welcome the opportunity to respond to her thoughtful comments. She talked about transparency and getting a sense of how it all knits together. If that is not clear, I am delighted to have the opportunity to seek to make it more so.
The noble Baroness raised the necessity of having the agreement of UK Government Ministers. As a point of detail, she mentioned the Secretary of State for Scotland. In fact, the order is drafted simply to say, “the Secretary of State”, deliberately widely, so that it can be any Secretary of State of the UK Government—whoever is the most appropriate person to do it in any given moment. In any event, her greater point was about the measure of control. This goes back to maintaining the integrity of the United Kingdom’s medicines regime. It has been made clear to the Government that this is important, and we share that view. It is so vital that, in our view, it justifies the measures we have insisted on and the measures that are contained in the order and which the Scottish Government agree with.
The noble Baroness asked whether it was correct that the Scottish Government had made a wider request to have the matters contained within the draft Section 30 order. For the record, that is indeed the case. The initial request in September was simply for the narrow order before this House, with the proposal that the remaining matters might be dealt with under a Section 104 order. In November, after some discussion and correspondence, the proposal was made that perhaps all matters could be included in a Section 30 order. We considered this carefully but simply did not agree with the analysis, for the reasons I have given. Our view was that the other matters were properly assessed to be consequential and therefore could be dealt with in a Section 104 order. As I have set out, it was driven by the general principle that we are not looking to extend the devolution settlement more than it needs to be, so if they can be dealt with in a Section 104 order then they ought to be. It was also about the lack of certainty I referred to in opening: this Bill is still progressing through Parliament and is still subject to amendment. We do not know its final form, so it would be rather challenging to include those matters in the Section 30 order, as it would have to be done right now, rather than waiting to see the end form of the Bill.
Lord Weir of Ballyholme (DUP)
The Minister mentioned the prospect of maybe producing a draft order but seemed to indicate that the Government would not do so until they had certainty on the Scottish Parliament’s final position on those two issues. Is there not a danger that the Government’s position will create a Catch-22 situation? MSPs will be voting not knowing what the Section 104 orders will be and, on the flip side, the Government will not produce those without knowing what the MSPs will settle on. It creates a contradiction on both sides. If part of the idea is to give as much certainty as possible, would that not be a flaw?
Baroness Smith of Cluny (Lab)
I am grateful to the noble Lord for raising this issue, because I can see that it is creating confusion, and I think that reflects how complicated and difficult the matter has been. The first thing to say is that it is not for the UK Government to draft any Section 104 orders; it is a matter for the Scottish Government to make sure that their legislation remains within the competence of their Parliament, and it is for them to request a Section 104 order and not for this Government to propose it to them. So, it would not be appropriate to draft and publish it, even if the other issues that I have mentioned were not present. But I am very sympathetic to the position of MSPs and others who would prefer to see a complete and neatly tied-up regime before them before they voted on it.
The fact is that it is complicated and strays into reserved areas, and the Scottish Government and the UK Government have sought to deal with that in the most efficient and respectful way towards the MSPs and the devolution settlement. The comfort that I give today is that we are in very constructive and collaborative conversations with them and stand ready to receive any requests for Section 104 orders.
On that note, I think we should celebrate the co-operation of the two Governments on what has been a very tricky issue. This is a Member’s Bill, so it was not a straightforward issue between two Governments that could be dealt with in the usual way. Both Governments are neutral on the issue. It is also a high-profile issue and, indeed, a highly emotive one.
This is what a constructive, mature and respectful reset of the relationship with the devolved nations looks like. I therefore commend this order to the House.
Baroness Coffey (Con)
Before the Minister sits down, I asked whether the Government suggested to Kim Leadbeater that she table Amendment 77 back in June, which started to extend parts of the Bill to Scotland. I can always ask the noble and learned Lord, Lord Falconer, about his Amendment 888, but, if she has an answer, I would be grateful if she could share that with the House in some way and at some point.
Baroness Smith of Cluny (Lab)
I would be delighted to write to the noble Baroness. It is important that we have precision on this issue and I do not have that information immediately to hand, so I will write.
Lord Keen of Elie (Con)
My Lords, I will be brief. I am a little puzzled by the proposition that the regulation of the medicines to be employed in assisted dying is to be regarded as the central purpose of the Scottish Bill, while the regulation of those applying those medicines is merely consequential. I would have thought that the hand comes before the content, rather than the content before the hand, but there we are. There appears to be a difference of legal opinion on that narrow point.
I accept the observation made by the Minister that there are aspects of this that are complicated and difficult. I nevertheless am left with an abiding impression that this rather complex mechanism ultimately is designed to ensure that it is the Secretary of State who has the final say over the way in which this legislation is implemented, rather than the Scottish Parliament.
But that is where we are. I have expressed my regret with regard to the scope of the Section 30 order and I leave matters there.
Separation Centres Review
(1 day, 4 hours ago)
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Lord Keen of Elie (Con)
My Lords, I welcome the opportunity to respond to the Government’s Statement on separation centres and the independent review by Jonathan Hall KC. While the review itself contains important material, we must be frank about several critical issues that have been raised both in and out of Parliament.
First, on the fundamental question of what threat we are talking about when discussing the need for separation centres, the reality is clear. Islamist extremism remains the predominant form of extremist offending within our prison estate. As the shadow Justice Secretary pointed out in the other place, Security Service statistics show that Islamist-related threats form the majority of the counterterrorism focus, and most terrorist prisoners in custody are convicted on Islamist-related charges. This is not a matter of debate but an acknowledgement of the practical threat that separation centres are designed to contain, and it must inform both policy and parliamentary scrutiny.
Secondly, we have concerns about the Government’s stated intention to look at litigation based on Article 8 of the European Convention on Human Rights. While that may offer superficial reassurance, it is in fact Article 3 of the convention that is the real legal barrier. Article 3 is absolute. There are no exceptions, no public order or national security carve-outs and no limited derogations. It prohibits inhuman or degrading treatment or punishment in the strongest terms, as that may be interpreted.
We have already seen its damaging consequences in our own courts. In the case of Abu v Secretary of State for Justice, the High Court found that prolonged segregation of a convicted terrorist, who was already in a separation centre, amounted to inhuman or degrading treatment, in breach of Article 3. It was found that Ministers had failed to account for his mental health needs adequately before imposing those conditions. This was a binding judicial judgment, applying the European convention directly to the operation of separation regimes in England and Wales.
Let us be clear: Article 3 cannot be overridden or restricted by statute or ministerial policy; it is absolute. No amount of legislative tweaking proposed by the Justice Secretary will permit separation conditions that our courts find contravene Article 3. If the Government’s strong desire is to insulate separation centre management from litigation, they will find that Article 3 presents the true legal limit, far beyond anything provided by Article 8, which is a qualified act. I therefore ask the Minister to confirm precisely what steps the Government intend to take in relation to Article 3. How, in practical and legal terms, do they plan to deal with the fact that the law, as it stands, prohibits what is interpreted to be inhuman or degrading treatment, even in the face of compelling public safety arguments?
In these circumstances, while we want to ensure that our prisons are safe, that our staff are protected and that dangerous offenders cannot radicalise others or cause greater mayhem, clearly there is a fundamental problem with the legal constraints imposed by the convention, and the Government need to address these.
Lord Addington (LD)
My Lords, when it comes to the basic question that has already been raised today—the European Convention on Human Rights—I am afraid that my Benches very much disagree with the noble and learned Lord who has just spoken. It was Churchill who said that it is the way you treat your prisoners that defines you as civilised. So are we going to make sure that we define their rights? If we look at this in practical terms, how are we going to balance this out?
If we are going to make sure that the prison officers in charge of this are safe—that is surely one of the most important parts here—when will the Minister be able to tell us whether we have gone through the improved training programmes that have been suggested and when they will have the equipment they need? These are two fundamental things.
The secure centres mean that we are not going to allow this highly dangerous section of prisoners into the main prison population, which is right; radicalisation has always been a problem in prisons, and we are doing something to stop it here. It is not only Islamic terrorists but far-right extremists—I think it was 60%, 30% and then 10% of other groups, if I understood the figures right. What are we doing to make sure these people are isolated and do not make the situation worse, and are we going to make sure that those who are containing it are properly equipped? That is the basic question here.
I appreciate that the Government have moved and have accepted Jonathan Hall’s recommendations. The timeframe is very important, as then we will know what we are going to expect from the Government and will be able to judge how it has succeeded. I hope that the Minister will be able to answer these basic questions in fairly short order.
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
My Lords, I welcome the opportunity to discuss with your Lordships this evening Jonathan Hall KC’s independent review of separation centres and the Government’s response to it. I am grateful to the noble and learned Lord, Lord Keen, and the noble Lord, Lord Addington, for their contributions.
On 12 April 2025, three prison officers in the separation centre at HMP Frankland were brutally attacked. I want first to pay tribute to those brave officers, and I am sure noble Lords will join me in wishing them well in their continued recovery. I have visited separation centres and seen the brilliant work our staff do first hand. These are specialist, high-control units located within three high security prisons which hold the most pernicious extremist and terrorist offenders. They are designed to protect other prisoners, staff and the public. I also visited HMP Frankland shortly after the attack last April and met the brave officers who serve there. I will say it again because it cannot be said enough times: these are dedicated professionals carrying out an absolutely essential public service.
Following the attack at HMP Frankland, the Government acted immediately to strengthen protections for front-line staff. We also invested £15 million in prison security straightaway, increasing the number of stab-proof vests available for front-line officers from 750 to 10,000, as well as providing training for up to 500 staff in the use of Tasers. The Government also appointed Jonathan Hall KC to lead an independent review into separation centres in order to learn from his findings and to reduce the risk of such an incident ever happening again. We are grateful to Jonathan for his work.
The findings are clear. The core principle behind separation centres remains sound but the system must improve. Jonathan’s report, which was published on 3 February, makes 13 recommendations to strengthen safety, sharpen accountability and modernise how separation centres operate. The Government have accepted all 13 recommendations, and in some areas have committed to going even further. Full details can be found in the published government response; however, I would like to highlight some specific issues raised by Jonathan, and the Government’s action in response to them.
First, the review identifies that some terrorist offenders present what are described as latent risks: a threat that may not always be visible but is no less dangerous to other prisoners, staff and the broader public. In response, we will continue to invest in the tools, training and support staff need to manage terrorist risk safely and confidently.
To give a bit more granular detail on that for the noble Lord, all staff already receive counterterrorism training; they will now receive more as per our response to the review, and separation centre staff will receive specific modules on terrorist risk. The Home Office runs desistance and disengagement programmes, which operate in the prisons and help individuals move away from terrorist ideology. Stab-proof vests have been mandatory in high-risk areas from June last year. As I said, we are training up to 500 staff to carry these Tasers, and staff can access helmets, batons and shields.
Lord Addington (LD)
Things such as de-escalation training might keep officers safer in conflicts. If the Minister has any figures on that, can he let us know here, or later on by letter?
Lord Timpson (Lab)
I would be delighted to write to the noble Lord about the de-escalation training. He is right that human relationships are important in these closed environments. In fact, in all prison and probation environments, human relationships are what matters in turning what can be very difficult situations into safer situations. We are launching a comprehensive, expert-level review of training for separation centre staff, tailored specifically to the uniquely dangerous environments in which they work.
Secondly, the review identifies a clear need to transform the way separation centres are governed and operated. That is why at the next spending review we will explore the creation of tougher, supermax-style units for the most violent and disruptive prisoners. These units would provide the highest level of control within a new tiered separation centre system, with movement between tiers permitted only following rigorous new risk assessments. We have already started preliminary work on that.
Thirdly, the review found that outdated procedures and legal complexity have constrained the system. We have already improved the defensibility of our separation centre policy framework, and we will go further to ensure that it is robust and grounded in operational reality.
The Government remain committed to the European Convention on Human Rights. However, we recognise, as Jonathan highlights within his report, the challenges Article 8 can pose for separation centre decision-making. That is why we are strengthening internal processes, developing a robust litigation strategy, and will consider whether new legislation is needed to better protect decisions taken by experienced staff in separation centres from legal challenge. We will explore the full range of options to deliver this, while being clear that we remain compliant with our obligations under the ECHR. To be clear to the noble and learned Lord, we are appealing the Abu judgment. Jonathan Hall did not find that separation centres contravened Article 3; he found that our process had failed, and we are reforming it.
Fourthly, the review found that current intelligence practices in separation centres are too bureaucratic and insufficiently focused. We will improve collection practices so that higher-quality, more relevant intelligence is gathered. This will be supported by further training for specialist staff. Working with the security service, we will ensure that the most serious risks are managed using the full range of available tools, and that high-quality intelligence directly informs operational decisions.
Our response to terror and extremism is decisive and determined. The Government will always stand with those who protect the public from danger. We will not shy away from reform, and we will never lose sight of our first duty: to keep the British public safe.