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General Committees

Debated on Wednesday 22 February 2017

Delegated Legislation Committee

Draft Transport Levying Bodies (Amendment) Regulations 2017

The Committee consisted of the following Members:

Chair: Mrs Cheryl Gillan

† Ansell, Caroline (Eastbourne) (Con)

Coyle, Neil (Bermondsey and Old Southwark) (Lab)

Donelan, Michelle (Chippenham) (Con)

† Dowden, Oliver (Hertsmere) (Con)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† Jones, Andrew (Parliamentary Under-Secretary of State for Transport)

Jones, Mr Kevan (North Durham) (Lab)

Lewis, Mr Ivan (Bury South) (Lab)

McKinnell, Catherine (Newcastle upon Tyne North) (Lab)

† Mathias, Dr Tania (Twickenham) (Con)

† Menzies, Mark (Fylde) (Con)

† Pickles, Sir Eric (Brentwood and Ongar) (Con)

† Poulter, Dr Daniel (Central Suffolk and North Ipswich) (Con)

† Prentis, Victoria (Banbury) (Con)

† Spencer, Mark (Sherwood) (Con)

† Zeichner, Daniel (Cambridge) (Lab)

Leoni Kurt, Tamsin Maddock, Committee Clerks

† attended the Committee

Fifth Delegated Legislation Committee

Wednesday 22 February 2017

[Mrs Cheryl Gillan in the Chair]

Draft Transport Levying Bodies (Amendment) Regulations 2017

I beg to move,

That the Committee has considered the draft Transport Levying Bodies (Amendment) Regulations 2017.

The draft regulations were laid before the House on 24 January. If approved, they will enable the combined authorities for the Tees Valley and the West Midlands to collect appropriate levies from their constituent councils to meet the costs of carrying out their transport functions. They are administrative and allow the fulfilment of local governance changes.

It is worth noting that such levying regulations have not been presented in Committee before; in the past, they have been subject to the negative approval procedure and, indeed, that has happened several times. However, with the passing of the Cities and Local Government Devolution Act 2016, it was determined that such regulations made in relation to combined authorities would in the future be subject to the affirmative procedure.

The five constituent councils of the Tees Valley Combined Authority, which are Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland, and Stockton-on-Tees, and the seven constituent councils of the West Midlands Combined Authority, which are Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton, have led a local process to improve their governance arrangements. That culminated in this House and the other place agreeing orders that saw the establishment of the Tees Valley Combined Authority on 1 April 2016 and the West Midlands Combined Authority on 17 June 2016. Those orders gave effect to the desire of the local authorities in those areas to improve their joint working, including on transport matters. Orders have since been made to provide for mayors to be elected on 4 May for both the Tees Valley Combined Authority and the West Midlands Combined Authority. Once elected, the mayor will be the chair of the combined authority.

Combined authorities are designated as levying bodies under the Local Government Finance Act 1988. Under that Act, the Secretary of State can make regulations in relation to the expenses of combined authorities that are reasonably attributable to the exercise of their functions, including in relation to transport. The regulations before the Committee will amend the Transport Levying Bodies Regulations 1992 to take account of the creation of the two combined authorities in Tees Valley and the West Midlands. They have been drafted to reflect the proposed approach of the local areas and have been agreed by the two combined authorities.

The levy could fund any of the transport functions that sit with the combined authority in question. The functions of each combined authority are set out in its establishment order and any subsequent order that confers functions, and transport functions are clearly identified. The transport functions of the two combined authorities include the development of a local transport plan, a concessionary fares scheme and the provision of information on transport services in their areas. It will be for the combined authority to decide how to fund its functions, including its transport functions, in accordance with its establishment order and any subsequent orders. The constituent councils will then need to consider how they fund any levy issued by the combined authority as part of their budget process—whether by council tax, Government grant or other revenue sources. They will need to take into account the impact on council tax levels in their area, including when determining whether any council tax increase is excessive.

In the case of the West Midlands, the regulations in effect constitute a name change. The previous West Midlands integrated transport authority was dissolved as part of the move to the West Midlands Combined Authority, and the ITA’s functions were transferred to the combined authority. Like the ITA before it, the West Midlands Combined Authority will continue to levy its constituent authorities for transport purposes. It will also continue to apportion the levy by agreement, or on the basis of the population of the constituent councils.

The situation for the Tees Valley Combined Authority is different, because there was no previous integrated transport authority. For that reason, the draft regulations set out how any transport levy would be apportioned between the constituent councils if the combined authority could not secure agreement. In the event that they cannot agree, the combined authority will apportion the levy by taking into account previous levels of transport expenditure by the constituent councils.

The regulations will help to facilitate the provision of transport arrangements as part of the wider governance changes across these two areas, and I commend them to the Committee.

It is a pleasure, Mrs Gillan, to serve under your chairmanship, to use your preferred terminology. In 2012 an amendment was made to the transport levying bodies regulations that enabled the Greater Manchester Combined Authority to issue levies to meet the costs of carrying out its transport functions. In 2015, after a number of other integrated transport authorities were established, they too were enabled to issue levies by an amendment to the regulations. Therefore, it is only right that this latest amendment is made so that the newly established Tees Valley and West Midlands Combined Authorities can also issue such levies. Furthermore, I understand that both of the combined authorities and their constituent councils have had the opportunity to comment on the instrument and lawyers for the councils have confirmed that they are content with the provisions.

The Labour party fully supports the devolution of transport funding, and the establishment of the Tees Valley and West Midlands Combined Authorities presents a promising prospect for both regions. Indeed, research conducted by IPPR North shows the stark contrast in spending on transport across the country, with England’s north-east seeing £300 per person and the West Midlands receiving £266 per person, compared with London’s £1,900 per person for key infrastructure between 2016-17 and 2020-21. The capacity to issue levies will accordingly allow the two combined authorities to invest in transport for their respective regions, even as the UK Government nationally fail to address nationwide disparities in transport spending.

The Labour-run Tees Valley Combined Authority, with the support of Councillor Sue Jeffrey—Labour’s candidate for Tees Valley Mayor—has set out four strategic transport priorities that it intends to pursue with the involvement of national agencies and investment by Government: the first is that Darlington station should be HS2 ready with new platforms and links to adjacent developments; the second is an additional crossing of the River Tees; the third is improvements to east-west road connectivity from the A1(M) to the international gateway at Teesport; and the fourth is the electrification of the Northallerton to Teesport rail line to improve freight to Teesport and passenger services to Middlesbrough.

In the West Midlands, Labour’s candidate Siôn Simon has put forward a number of exciting policies. He has pledged to freeze public transport fares for a year, as well as to provide subsidised charges for job seekers, bring in 24-hour, seven-day running on key bus routes to help shift workers, cut congestion on the roads and improve journey times across the region, make the M6 toll free for drivers, expand Birmingham airport and quadruple the £8 billion growth and transport investment plan for the region.

We therefore welcome this amendment, which we believe will be an important tool for Labour Mayors to implement those policies following the elections in both the West Midlands and Tees Valley on 4 May.

We understand from this draft measure that component constituent authorities are making a transport charge towards the running of the bodies in their areas. If a local authority in a combined authority area decides at a later date to withdraw from the combined authority, will it still be required to pay in any costs or charges to the pool? I ask that because in Lancashire, where we have a shadow combined authority, Wyre has not taken part, my own council Fylde has decided to withdraw and at least another three local authorities are now at various stages of deciding that a combined authority is really not for them. I would like some clarification from the Minister on whether, if a local authority is not part of a combined authority, or if it is and then withdraws, it is still liable for financial costs.

I can answer my hon. Friend’s question. If an authority leaves a combined authority, it will no longer be a part of it so it cannot be levied. However, it can of course voluntarily contribute if it wishes to do so.

Question put and agreed to.

Committee rose.

Draft Claims in Respect of Loss or Damage arising from Competition infringements (Competition act 1998 and other enactments (amendment)) regulations 2017

The Committee consisted of the following Members:

Chair: Nadine Dorries

Austin, Ian (Dudley North) (Lab)

† Barclay, Stephen (Lord Commissioner of Her Majesty's Treasury)

† Bruce, Fiona (Congleton) (Con)

† Chalk, Alex (Cheltenham) (Con)

† Debbonaire, Thangam (Bristol West) (Lab)

† Esterson, Bill (Sefton Central) (Lab)

† Gibson, Patricia (North Ayrshire and Arran) (SNP)

† Hayes, Helen (Dulwich and West Norwood) (Lab)

† Henderson, Gordon (Sittingbourne and Sheppey) (Con)

† James, Margot (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

Jones, Graham (Hyndburn) (Lab)

† Kawczynski, Daniel (Shrewsbury and Atcham) (Con)

Leslie, Chris (Nottingham East) (Lab/Co-op)

† Letwin, Sir Oliver (West Dorset) (Con)

† Metcalfe, Stephen (South Basildon and East Thurrock) (Con)

† Morton, Wendy (Aldridge-Brownhills) (Con)

† White, Chris (Warwick and Leamington) (Con)

Gail Bartlett, Committee Clerk

† attended the Committee

Sixth Delegated Legislation Committee

Wednesday 22 February 2017

[Nadine Dorries in the Chair]

Draft Claims in Respect of Loss or Damage Arising from Competition Infringements (Competition Act 1998 and Other Enactments (Amendment)) Regulations 2017

I beg to move,

That the Committee has considered the draft Claims in Respect of Loss or Damage Arising from Competition Infringements (Competition Act 1998 and Other Enactments (Amendment)) Regulations 2017.

It is a great pleasure to serve under your chairmanship, Ms Dorries. I will set out why I believe the draft regulations are an important tool in helping wronged businesses and consumers to access redress for breaches of competition law, and why the Government’s approach to implementation of the damages directive is in the best interests of UK businesses, consumers and competition authorities. I will then set out our approach to some of the key measures in the directive and explain how the draft regulations, supported by case law and court rules, will implement the directive and preserve important elements of existing UK law.

The damages directive aims to make it easier for consumers and businesses to bring private action claims for damages. It applies only where there has been a breach of European competition law, either on its own or alongside a breach of national competition law. The directive covers a range of issues affecting a claimant’s ability to access compensation, including a claimant’s access to information to support their claim, the time a claimant has to bring about a claim, and incentives for businesses to settle early. It also offers certain protections for small business defendants, cartel leniency applicants and commercially sensitive information held by defendants.

I am pleased to say that the UK has long been at the forefront in Europe when it comes to providing access to damages for breaches of competition law. Through the Consumer Rights Act 2015, we made it easier for consumers to get their money back from unscrupulous businesses by widening the jurisdiction of the Competition Appeal Tribunal, promoting collective proceedings—in particular by introducing opt-out collective actions and opt-out collective settlements—and providing the Competition and Markets Authority with the authority to approve voluntary redress schemes. I am also pleased to say that, thanks to careful negotiation, the directive recognises the strengths of the UK regime and is closely based on it. The regulations required careful drafting to ensure full implementation and reflect the strong message that we received from stakeholders that we should preserve UK case law and well-understood practices.

I will now set out the Government’s approach to implementation and explain why we think that our proposed route is the most effective in the long term. In our consultation with stakeholders, we proposed the normal “copy out” approach to implementing the directive and argued that that was the clearest way to ensure that the directive was implemented in full. However, consultation respondents highlighted the fact that the “copy out” approach risked undermining important, established UK case law and creating confusion where there is currently a good understanding of the regime. As a result of that feedback, we reconsidered our implementation approach. Given our well-established regime and rules, an approach to implementation that relied as much on case law and court rules as on regulations seemed more appropriate. We will therefore leave in place existing provisions in UK law that meet the requirements of the directive, including case law, and make changes to UK legislation only to implement outstanding provisions that are not currently covered in UK competition law and practice.

I turn briefly to the issue of gold-plating directives. As I explained, the damages directive is required to apply only to damages sought for breaches of European competition law or where a business has contravened both UK and European competition law. Owing to the close relationship between articles 101 and 102 of the treaty on the functioning of the European Union and chapters I and II of our own Competition Act 1998, the Government intend to apply the provisions to cases following breaches of UK law even when no parallel breach of European competition law exists. Although that is technically gold-plating, it will mean a simpler regime for businesses to comply with and will limit the amount of satellite litigation about which regime applies in a particular case. This approach was strongly endorsed by stakeholders during our consultation.

I will now discuss an issue that has driven considerable debate during the implementation process—the temporal application of the new requirements and how we handle the transition from one regime to the other. The directive states that its substantive provisions should not be applied with retrospective effect, whereas procedural provisions can be backdated. However, the directive does not specify which measures are substantive and which procedural, so to ensure clarity, the regulations distinguish substantive provisions from procedural. The Government have decided that substantive new rules will apply only to claims where both the infringement and the harm occurred after the coming into force of the implementing legislation. Procedural provisions will apply to proceedings that begin after the commencement of the implementing legislation, and may apply to cases in which the harm or infringement took place before the coming-into-force date. All provisions of the regulations are substantive, save for the provisions on disclosure and the use of evidence.

I am aware of concerns that this approach could mean that the substantive provisions of the directive do not have effect for some time. It has also been suggested that the approach could lead to claimants seeking to bring forward their claims in more favourable jurisdictions. I believe that taking the approach that I have set out achieves a balance between allowing consumers access to the reformed regime and not putting defendant businesses in an unfair position. I should also stress that, unlike some EU member states, we are certainly not starting from scratch. Our existing regime will ensure that consumers and businesses can have access to suitable redress, including damages, even if the new provisions do not have an immediate practical impact.

As I explained, the regulations contain only those elements that the Government believe must be included as they are not already provided for in UK law or practice. For example, it is a key tenet of the directive that a cartel causes harm. That principle is not currently codified in UK law so, through part 4 of the regulations, the Government are introducing a rebuttable presumption that where a cartel has been uncovered, it has caused harm to consumers or businesses.

The regulations will also introduce a ban on exemplary damages, ensuring that consumers recover only what they have lost. In other areas, we are implementing a combination of changes to primary legislation and changes to court rules. For example, there are strong rules already in place to govern the disclosure of documents in cases. The court rules will be amended to ensure that those are in line with the directive.

The regulations improve the protection from disclosure for cartel leniency statements and settlement submissions. I believe that that will help to protect the leniency and settlement processes, which are important for effective enforcement against cartels.

The regulations deal with two further issues that I will draw to the Committee’s attention. The directive puts in place protections for small and medium-sized enterprises that are part of a cartel. Although it is right that errant SMEs should pay their fair share back to consumers, we should do what we can to prevent SMEs from going out of business as a result of their involvement in a cartel. For that reason, the regulations contain measures to ensure that SMEs can be held liable only to their own direct or indirect purchasers when in a cartel. SMEs lose that protection if they are the cartel’s ringleader, have coerced other businesses to join or have previously been found to have infringed competition law.

As is the case under the Competition Act 1998, the regulations create a stand-alone regime for limitation or prescriptive periods for private claims. The time periods for making a claim remain at six years for claimants in England, Wales and Northern Ireland and five years for claimants in Scotland. The directive requires a change to the UK’s interpretation of the point at which the limitation period starts and the circumstances under which they are suspended. The limitation period starts when the competition infringement has ceased and a claimant knows or can reasonably be expected to know the identity of the infringer and that an infringement has occurred and harm has occurred arising from the infringement.

The regulations ensure that the limitation period is suspended in various circumstances—for example, where a competition authority in the UK or the EU is investigating the behaviour to which the complaint relates. The regulations contain provisions that I believe balance the right of consumers to have a reasonable time to bring their claim with the need for businesses to understand their contingent liabilities.

We have taken an approach to the implementation of this directive that ensures that victims of anti-competitive behaviour can access the right level of compensation. It balances the needs of consumers with the protection of important commercial information and the need to support our leniency and settlement regime. I believe that the regulations will enable businesses and consumers to benefit from the strengths of a regime that remains the envy of many across Europe.

I broadly agree with the Minister. We support the implementation of the regulations. It is absolutely right that we do so, because this is about ensuring fair markets and, as she said, the protection of consumers and of smaller businesses. It is really important for the success of our vibrant economy that we do all those things and, as she said, that we retain the principle that cartels cause harm.

It is very good to hear the Minister express support for that principle. Opposing undercutting and exploitation is crucial, and that applies to suppliers, workers and consumers. The regulations are consistent with those principles. She mentioned the Consumer Rights Act and how the regulations build on legislation already on the UK statute book. She also mentioned the fact that this country has a proud record and is ahead of the curve on many of the areas she covered.

I am happy to support the regulations. However, a number of questions arise from what the Minister said and from the legislation, not least what will happen to the regulations after we leave the European Union. Many businesses wish to avoid divergence of regulation as far as possible. What is the Minister’s response to that?

The Minister said that the provisions may take some time to take effect. Perhaps she could be a bit more prescriptive in describing the timescale. It might be suggested that she is saying they will not take effect at all because we will have left the EU before they come into effect, which would seem rather odd, to say the least. Will she explain the exact position of the regulations after we leave the EU and say whether, indeed, they will come into effect at all before we leave the EU?

The Minister mentioned what happens down the supply chain and the way that SMEs are involved. My understanding, from what she said, is that the regulations allow a degree of protection for smaller firms that are involved through supply chains. Something that springs to mind is the way in which the Groceries Code Adjudicator operates. The GCA has only direct suppliers in scope. There are about 7,000 of them, and something like 300,000 indirect suppliers in the grocery market. I appreciate that the Minister may need to come back to me on this, but I wonder whether the regulations have implications for the way in which the GCA operates. Would they result in a change in its role and would they draw in indirect suppliers in the grocery sector? That point occurred to me as I listened to the Minister.

The energy market is a good example of long-standing concern about cartels in this country. The Competition and Markets Authority inquiry looked at the problems of cartels and the big six. There is significant concern, some of it voiced by the Government—I think the Prime Minister has mentioned it—about continuing problems in the energy market and high prices, which have risen significantly in recent times.

The inquiry discussed the challenge of vertical integration and the relationship between supply and retail. It considered whether the relationship was healthy and whether the way in which the big six operated meant that more intervention was needed to help consumers and smaller entrants to the market. Will the regulations assist with challenges in the energy market? Will they, in the Minister’s opinion, be part of an opportunity for new entrants and consumers to challenge pricing and the service they receive in the energy market?

We fundamentally support the regulations, because in principle they are helpful to the achievement of fair markets and enterprise. We shall not oppose them. However, if the Minister can answer my questions either today or in writing, I shall be extremely grateful.

Please sit for a moment. It is normal and acceptable etiquette always to let the Bench know before a debate if you are going to represent your party and want to speak. Failing that, it is acceptable and appropriate to rise to catch the eye of the Chair—you should have been called before the Opposition spokesman. Peering gently and shyly at me is not a way to let me know you want to speak. In May, it will be two years since the general election and it would be appropriate if members of your party began—I have to make such remarks in almost every Committee—to abide by the acceptable rules of debate.

Thank you, Ms Dorries; I apologise. I have served on such Committees before, but have always just caught the Chair’s eye. As you say, that is perhaps not the way to do it.

I am pleased that in the drafting process for the statutory instrument the Department for Business, Energy and Industrial Strategy liaised with the Scottish Government, among others. Members of the Committee would all agree that consumers and businesses should not be disadvantaged by businesses that choose to operate in an anti-competitive manner. It is important that if that happens those affected should be able to claim damages to cover the amount they have lost as a result of that behaviour. The reforms to the Consumer Rights Act 2015 were welcome improvements to such access to redress. My question to the Minister is simple and short. Will she explain the implications of the decision to leave the EU for the UK Government’s understanding of EU competition law?

I thank hon. Members for their questions. I shall first answer the shadow Minister’s question on Brexit, together with that of the hon. Member for North Ayrshire and Arran. In line with other European directives, all European law will be transposed into UK law via the great repeal Bill, and this measure is no exception. It is not necessarily possible to give a view about what will happen next in all cases, but I can safely say that the Government will not only transpose the directive into UK law but will recommend that it remains UK law. We have always been against cartels, and we remain against cartels. We accept that there are advantages in the parts of the directive that we have introduced and which will strengthen UK competition law vis-à-vis cartels. As for the time it will take for the measure to take effect, it was initially a bit more difficult for me to understand that.

I cannot comment on changes that may or may not take place in the European Union in years to come, but I can answer the question that the hon. Gentleman originally asked about what would happen to the regulations. They will be transposed into UK law, and there will not be any change to them thereafter. There may be improvements to UK competition law, but that will no longer be determined by the EU after we have left.

Does my hon. Friend agree that the regulations are a matter of UK law anyway? They do not need to be transposed and they will persist. If one inspects the regulations, one finds a rather interesting example of a general phenomenon, as it is only in proposed new sections 3(1)(d) and 3(2) that any change in reference is required. One simply needs to eliminate reference to the EU competition authorities. The rest of the measure is built round the CMA and UK law, and presents a rather interesting example of the relative simplicity of the great repeal Bill manoeuvre in many cases, although not all. It is probably worth noting that and using it as an example in future.

I thank my right hon. Friend for adding value to the debate and for his observations.

Turning to the question of why it may take some time to bring the regulations into effect, I should like to underline the fact that the bulk of protection against cartels is dealt with in case law and UK courts, and that will continue to give redress to SMEs and consumers. On the specific question of the parts of the directive that we have introduced in UK law, the timing will depend on the nature of the competition infringement, and it may take 10 or 15 years for a cartel to be uncovered and prosecuted. Until then, the current UK regime will, as I have said, provide effective protection.

The hon. Member for Sefton Central made the point that the additional protection that the new framework will give to SMEs is welcome. I remind hon. Members that SMEs are more often victims of cartels than participants. He asked about the Groceries Code Adjudicator and whether the regulations would have any effect on that office. They do not affect the operation of the GCA, because it deals with different aspects of protection for supply chains. Any supply chain that is affected by a cartel issue will have access to protection under the regime that we are discussing. Any other aspect of abuse in the grocery supply chain will go to the GCA, as happens at present.

Finally, the hon. Gentleman asked about the energy market and whether we expect more use of this regulatory framework in dealing with abuses, particularly price rises. The CMA report last summer provided a framework for strong objections to some of those price rises. Ofgem has pronounced that, in its view, the recent price rises to which he alluded are not justifiable.

I do not really see any connection with the idea of a cartel. The issues that the hon. Gentleman mentioned are real, and I share his concern at some of the price rises, as does Ofgem, but they are not the product of a cartel. If they were, we would see them across the board. Of course, the big six, to which he referred, account for just 81% of the market, whereas 13 years ago they accounted for 99%. There is a lot more competition in the energy market now, with up to 40 companies operating, and the share of the market held by other companies is increasing with speed, so I do not think the issues to which he alluded have anything to do with a cartel.

I am grateful to the Committee for its consideration of the regulations. I believe that I have set out an approach to the implementation of the damages directive that achieves full implementation in a way that works in the best long-term interests of UK consumers and businesses.

Question put and agreed to.

Committee rose.

Draft Equality Act 2010 (Specific Duties and public authorities) regulations 2017

The Committee consisted of the following Members:

Chair: Mr David Nuttall

† Beckett, Margaret (Derby South) (Lab)

† Borwick, Victoria (Kensington) (Con)

† Bridgen, Andrew (North West Leicestershire) (Con)

† Champion, Sarah (Rotherham) (Lab)

† Crawley, Angela (Lanark and Hamilton East) (SNP)

† Davies, Dr James (Vale of Clwyd) (Con)

† Dinenage, Caroline (Parliamentary Under-Secretary of State for Women and Equalities)

† Gray, Neil (Airdrie and Shotts) (SNP)

† Heaton-Harris, Chris (Daventry) (Con)

† Jenkyns, Andrea (Morley and Outwood) (Con)

† Johnson, Gareth (Dartford) (Con)

† Kennedy, Seema (South Ribble) (Con)

† Mactaggart, Fiona (Slough) (Lab)

† Morden, Jessica (Newport East) (Lab)

† Phillips, Jess (Birmingham, Yardley) (Lab)

Sharma, Mr Virendra (Ealing, Southall) (Lab)

† Sturdy, Julian (York Outer) (Con)

† Thomas, Derek (St Ives) (Con)

Peter Stam, Joanna Welham, Committee Clerks

† attended the Committee

Seventh Delegated Legislation Committee

Wednesday 22 February 2017

[Mr David Nuttall in the Chair]

Draft Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017

I beg to move,

That the Committee has considered the draft Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.

It is a great pleasure to serve under your chairmanship, Mr Nuttall. The regulations, which are being introduced under powers in section 153 of the Equality Act 2010, replace and amend the Equality Act 2010 (Specific Duties) Regulations 2011. They replicate the measures from the previous specific duties regulations—namely, that public bodies must publish information every year to demonstrate their compliance with the equality duty and must set equality objectives every four years.

Tackling the gender pay gap is a priority for this Government, which is why we have used these powers to include new duties for the relevant public authorities, if they have 250 or more employees, to report on their gender pay differences. We have already delivered on our manifesto commitment to introduce mandatory gender pay gap reporting for large employers in the private and voluntary sectors, and the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 were approved by both Houses last month and signed by the Secretary of State on 6 February.

It is only right that public bodies, including Government Departments, are subject to the same reporting requirements. That is why we announced that we would extend the manifesto commitment to the public sector in October 2015. My Department’s gender pay gap is much lower than the average, at only 5.9%, but I want the Government to be a trailblazer and to lead by example.

The regulations apply to specified public authorities in England, to non-devolved organisations and to certain cross-border organisations and authorities. Scottish and Welsh public bodies are subject to separate specific duties regulations. The devolved Administrations in Scotland and Wales have been kept informed of the proposed changes. Both sets of regulations will require the same gender pay gap calculations and use the same methodology for calculating the data.

Will the Minister advise us on what measure was taken to fall upon the figure of 250 employees? She mentioned Scotland. We in Scotland are further ahead on that, as are other nations in Europe. Why not fewer than 250?

That is a good question. The reason is that we were fundamentally keen that this manifesto commitment was delivered hand in hand with business and that we were with business every step of the way. We are really serious about this and want businesses to be 100% committed to it. Business felt that this number was manageable. I know that the Scottish Government have imposed a lower threshold in Scotland, but it should be noted that the requirements there are less specific and do not include the full range of calculations that will apply to public bodies in England. We want businesses to see this as being in their interests. They want to be able to identify and promote the skills of every single one of their workforce, and we do not want to make this too burdensome. We want to bring them with us every step of the way, hence the number we have settled on.

All specified public bodies will need to publish their gender pay gap data on a website that is accessible to members of the public. Organisations will also need to upload data to a Government-sponsored website, which will also allow us to establish a database of compliant employers and to monitor compliance closely. We have aligned the reporting timetables and obligations as closely as possible, for employers in different sectors to achieve consistency and comparable sets of data.

I firmly believe that the two sets of regulations will provide unprecedented transparency on gender pay differences in all sectors and create the environment we need to drive change.

It is a real pleasure to serve under your chairmanship, Mr Nuttall. I am pleased to be standing opposite the Minister, because I know that she is incredibly committed to this area. It has been a pleasure to see how things have started going forward at a pace under her watch.

It was a proud day last month when we were in this room and the Government finally, after seven years, introduced mandatory paid audits for larger companies in the private and voluntary sectors. It is frustrating that it took the Government quite so long to bring forward those measures, which were created by the previous Labour Government, but, although they are small steps, we are making progress. I am grateful for that. I commend the Government for extending the mandatory pay gap reporting duties to public sector employers. As the Minister said, they promised to do so in October 2015. It is another welcome yet long overdue step—but we are getting there under the Minister.

The regulations, which relate to section 153 of the Equalities Act 2010, almost exactly mirror the regulations relating to section 78. Unsurprisingly, I therefore have concerns that these new duties could have gone further. As with the duties on private and voluntary sector organisations, they apply only to public authorities with 250 employees or more, which has already been raised by the hon. Member for Airdrie and Shotts. Maintaining such a high employee threshold for the application of these duties in the public sectors was raised as a concern by a significant number of organisations and individuals when responding to the Government’s consultation, yet the Government have chosen not to set a lower threshold for public bodies.

It is understandable that the Government would want to create comparable data between the public sector and the private and voluntary sectors, but limiting the application to public sector bodies with more than 250 employees will severely limit the number of public authorities caught under the regulations. The Government claim that a public authority of any size could choose to adopt mandatory reporting, but to what extent will a voluntary expectation create practice in reality? What communications does the Minister intend to have with all public bodies, regardless of their number of employees, to encourage them to publish their gender pay gap information? How many have indicated that they will take that up voluntarily? In the consultation response, the Government promised to keep the setting of a lower employee threshold under review, but they failed to give assurances on the timescales. Will the Minister tell us when that will be reviewed? What evidence does the Minister need in order to persuade her that 250 employees is too high a threshold?

The regulations impose a reporting duty on public authority employers that oblige them to publish information that demonstrates their compliance with the public sector equality duty, and how they will work towards achieving any of the three core objectives in the duty. Despite the requirement to make those objectives specific and measurable, the regulations do not require an employer to publish an action plan or equality objectives aimed specifically at tackling the gender pay gap, as recommended by the Equality and Human Rights Commission. In its consultation response, the EHRC stated that

“public authorities should be required to publish one or more objectives showing how they will contribute to reducing the gender pay gap, supported by an action plan setting out the steps they will take to achieve their objective(s) and the timescales for taking those steps.”

Considering that the then Prime Minister, David Cameron, referred to public sector equality duty impact assessments as “bureaucratic nonsense”, I am hesitant to take on good faith that the Government are truly committed to ensuring that employers actually act to tackle the issues raised through mandatory gender pay gap reporting. That worry is compounded by the fact that the information demonstrating compliance by employers with the public sector equality duty is to be published by 30 March 2018, and then only every four years after that. I look forward to the first gender pay gap report under these new regulations being published in March 2018. However, it is not enough just to know that employers have a problem; the Government must do all they can to ensure that those problems are tackled. I fail to see how the regulations alone will help with that. Again, the consultation said that the issue will be reviewed. Will the Minister tell us when?

The Government have said that they will publish tables on employers reporting gender pay gaps by sector under section 78 of the Equality Act 2010. Will they do the same for public authorities? Will the Minister go further and publish an annual league table that ranks public bodies by pay gap? Will the Government commit today to bringing an annual report to Parliament with the raw data responses, information from authorities that demonstrates compliance with the public sector equality duty and—this is of fundamental importance—a Government action plan to narrow the gap in the following 12 months?

I will make a wider point before I sit down. Progress to tackle the gender pay gap cannot be incremental and piecemeal. Progress initiated by the previous Labour Government has already been implemented far too slowly by the coalition and Tory Governments. We know that deep and corrosive structural barriers are at the core of the gender pay gap: occupational segregation, with women stuck in chronically low-paid and undervalued sectors of the economy; unequal caring responsibilities; the undervaluing of roles predominantly done by women; maternity discrimination and so on. I know that the Minister is very aware of those and is really trying to move forward on them.

Clearly such pervasive, structural issues are not fixed only through transparency, so I hope that the Minister can shed some light on why the Government have rejected almost all of the 17 recommendations made by the cross-party Women and Equalities Committee on tackling the gender pay gap. Those recommendations were sincerely aimed at improving working conditions for women of all ages and in all sectors right across the country. I am afraid that it shows contempt to ignore the evidence of experts and the voices and lived experiences of thousands of women in chronically low-paid and undervalued sectors of the economy such as care, hospitality and retail.

I hope that the Minister will tell us why the Government appear to be failing even to act on their own evidence and analysis. I am talking about the Government research with the Equality and Human Rights Commission that estimates that 54,000 women are forced out of their jobs every year because of maternity discrimination. Yet, since the introduction of employment tribunal fees, less than 1% of maternity discrimination cases end up in a tribunal. On 31 January 2017 the Government published their own review of employment tribunal fees, admitting that the fall in claims has been significantly greater than what was estimated when the fees were first introduced. The only ability that women have to enforce their rights at work is through employment tribunals. How on earth can this Government claim to show any commitment to tackling the gender pay gap when they have effectively priced women out of their own employment rights?

Ahead of the spring statement the Government should be outlining how they plan to tackle the wider issue of economic inequality for women, conducting a gender impact analysis of their policies, seeking evidence and acting on it. Instead, on the issue of women’s economic equality the Government have turned their back on the evidence and are effectively walking away from structural reforms that would take us from tiny steps forward to meaningful action on the gender pay gap.

It is a pleasure to serve under your chairmanship, Mr Nuttall. I believe and welcome what the Minister has said but, frankly, taking eight years after the Equality Act 2010 does not seem a very convincing commitment to equal pay.

When we look at what these regulations do not include, we see that there will be real gaps. For example, regulation 2(3) states that

“an employee of an English local authority at a maintained school is to be treated as an employee of the governing body of that school.”

That means I can think of no primary school, except perhaps the enormous one in my constituency, that will be affected by these measures. Primary school teachers, who can be real victims of pay inequality, and the dinner ladies in such schools, who can be even greater victims of pay inequality, will not be able to compare their pay to that of men. There are real issues about scope and coverage and about the time that women have had to wait. We get very used to waiting for equality —some of us have got old waiting for equality—and that is a further issue I am concerned about.

There is a bit of the Equality Act that this Government and their predecessors did not commence: the provision that means where age discrimination and gender discrimination cross, the power to contest that combined discrimination should be available to women. When it comes to pay, where is the biggest pay gap? It is the one for older women. Women reach peak pay at 39, whereas men reach it in their late 50s. Frankly, it is not right, and this pay audit is not likely to highlight that issue sufficiently. I am deeply concerned that we are still stuck with legislation that was perhaps right for eight years ago but is now out of date and we are just getting it implemented now. That is a very serious question.

I have one more question, about the meaning of “employment” in regulation 2. The biggest pay gap, as well as by age, is between people who are employed in the gig economy—on flexible, precarious contracts—and those who are on secure contracts. Public authorities use those precarious contracts less than private companies, but they do use them. I do not know, looking at the regulations, how someone on that kind of precarious contract could use the information that will be made public to secure a fairer pay deal for themselves. That is another example of where taking eight years to do something that would have been right eight years ago means that the regulations have become out of date.

Although I welcome the fact that we are at last seeing these regulations, they are nearly a decade out of date. I urge the Minister to look at what she will do about the question of age pay inequality and what she will do to tackle the pay inequality that is so gross in those precarious jobs in the gig economy.

I thank everyone who has contributed to this debate. I start by emphasising that we fully agree that it is unacceptable that the gender pay gap exists in this day and age. The UK’s overall gender pay gap is just over 18%. While that is the lowest on record and has consistently fallen, it is doing so too slowly, and voluntary reporting has not led to sufficient progress.

This challenge faces us all. I am really proud that the Government will lead by example. The regulations, alongside those aimed at private and voluntary sector employees, will drive action that promotes better, greater gender equality in workplaces across the country. The gender pay gap obligations apply to specified public authorities if they have 250 or more employees. We estimate that around 3.8 million employees in the public sector will be covered by the new gender pay gap reporting requirement. Indeed, the combination of these regulations and those for the private and charitable sectors will cover more than 15 million employees in 9,000 organisations, representing nearly half the total workforce. That is a massive step in the right direction.

Public bodies with more than 150 employees are already required to report on the diversity of their workforce and are encouraged to publish gender pay gap information. We are very keen in the first instance to place the same requirement for gender pay gap reporting on all employers, to ensure consistency and comparability. We have started in the public sector with the threshold of 250 employees, which aligns with section 78 of the Equality Act, but we will keep the threshold under review. The regulations and the ACAS guidance will, in any case, help organisations of any size to analyse their gender pay gap. We are not limiting reporting to those with 250 or more staff. Anybody can do it, but at present, those with 250 need to.

We have consulted massively on this. The right hon. Member for Slough said that the regulations were out of date. The idea may have arisen in 2010, but we have consulted on the regulations numerous times over the past year or so in order to get them exactly right, to make them timely and relevant and to ensure we took on board the views and expectations of all the different aspects of society. The majority of respondents to the public consultation who answered the question about the proposed scope agreed that the gender pay gap obligations should apply to authorities with 250 or more employees. Having said that, I have already spoken to employers with somewhere between 200 and 250 employees who are doing that reporting because they feel it is too close for comfort and do not want to be in a position where they suddenly slip into that larger number and get caught out.

The gender pay gap reporting requirements will be reviewed by the Secretary of State five years after commencement. Although that is the formal point for reviewing the obligations, we will of course closely monitor compliance on a much more regular basis, to ensure that the measures are effective and are working as intended. Ensuring that employers comply with the regulations is, of course, of the utmost importance to the Government. The Government Equalities Office will closely monitor that compliance by reviewing the data uploaded to a Government-sponsored website.

The Equality and Human Rights Commission can take enforcement action if a particular public authority has not complied. In line with the rest of the specific duties regulations, the Commission has powers to issue a compliance notice and can apply to the courts for orders requiring compliance. We have discussed with EHRC how the new system will operate and we will work closely together after reporting begins in March.

The Government have been great at naming and shaming businesses that are not paying the minimum wage. Does the Minister envisage that she will be doing the same thing with the gender pay gap?

That is an excellent question. That is the whole point behind ensuring that businesses and employers have to publish their data publicly. They cannot be hidden away in the murky depths of their website. They need to be in a really accessible place so that we can compare the data and tackle any worrying sectors or employers.

The regulations do not require mandatory equality objectives connected to gender pay gap data or action plans, but all employers will be strongly encouraged to publish information on how they intend to tackle the gender pay gap in their organisations. That is why we have strongly encouraged a narrative. Many public bodies have indicated that they are keen to publish a narrative alongside their gender pay gap calculations, so that they can provide more context for any gender pay differences, and highlight work to reduce any gaps. We know that sometimes the organisations that are doing some of the best work to bring women through the pipeline have, on paper, some of the worst gender pay gaps, but they are investing in a much more long-term strategy. That is where that narrative is really important.

We know that transparency is not a silver bullet. The hon. Member for Rotherham and the right hon. Member for Slough have spoken about the things that are missing here. We are not pretending for one second that this is a silver bullet, but it will incentivise employers to analyse the drivers behind their gender pay gap, which is what this is all about, and the extent to which their policies and practices might contribute to that gap.

We are also working closely with ACAS to deliver guidance for public bodies to help employers fully understand and implement the regulations and understand why they are good for their organisations and businesses.

The hon. Member for Rotherham asked why the Government had not accepted all the recommendations from the Women and Equalities Committee. Of course, we massively appreciate the important role that that Committee plays on the issue. I was one of the MPs in the previous Government who campaigned hard to get a Women and Equalities Committee. We carefully consider all the recommendations it makes. The report makes a number for Government, several of which we have already actioned. For example, the right to request flexible working already allows those with fewer than full-time hours to request the opportunity to work more.

Many of the recommendations would involve significant cost to business and, because we are so early in the process, they would also require changes to primary legislation, which has been in place for only 12 to 18 months. In particular, shared parental leave and flexible working are very new. We would rather wait until these new policies have had time to become established and sufficient evidence has been gathered on what works before changes are made.

I thank the Minister for what she is saying. I wonder, when she says that the Government are going to wait, whether she could give us an indication of how long.

The hon. Lady knows that I am passionate about this and will not let it drag on forever. I will keep it under constant review. She knows, as well as I do, that I am not in the business of spending taxpayers’ money before knowing that that money is going to be well spent and will make a real and positive difference to working women—and men and employers—up and down the UK.

The Minister mentioned earlier the work of the Women and Equalities Committee inquiry. A number of witnesses to that inquiry outlined that the European Commission recommends a threshold of 50 employees. Does the Minister accept that a more ambitious target would bring forward the kind of changes that we want a bit earlier?

That is in terms of the number of employees one would have to have. As I said at the outset, we wanted to do this hand in hand with business. One concern articulated by business right at the beginning was that, if businesses did not feel that they had bought into this and could not see the advantages, the more unscrupulous ones might subcontract all their lower paid jobs to microbusinesses or very small companies to get round the gender pay gap reporting. We do not want to be in that position. We want to be in a position where businesses, authorities and public bodies all see that there is a genuine benefit in maximising the potential of every single member of their talented workforce, bringing them through the pipeline and making sure they reach the absolute pinnacle of what their skills allow them to do—and that they look at all the different resources available to them such as flexible working and shared parental leave.

It is important to note that we may not have such a low threshold of staff as other European countries, but the way we want to report is much more onerous. We cover bonus pay gaps as well. We know that the bonus pay gap is significantly larger than the gender pay gap on average. Men get paid significantly more and that is why we are asking for a median and mean average for bonus pay gaps. Our requirements are a little bit more arduous, but we think that they are the way we are going to get to the nub of this problem and really begin to tackle it.

The right hon. Member for Slough spoke about older workers and older women in particular. I am really dedicated to looking at ways to tackle the challenges facing older women in work. We are really committed to unlocking the skills, talents and experience of all women and supporting them to reach their economic potential. We will shortly publish “Fuller Working Lives: a partnership approach”, which sets out how working longer can benefit businesses, individuals and the economy, and the key actions that Government are taking. In the meantime the Women’s Business Council, which this Government established, has set up its own action group on staying on. It specifically looks at what businesses can do to support older workers, such as encouraging greater use of flexible working and providing practical support.

I am really pleased that the Committee broadly welcomes the regulations and that we agree on the underlying policy intention to accelerate action to close the gender pay gap. On that basis, I hope that hon. Members will support the regulations, which I commend to the Committee.

Question put and agreed to.

Committee rose.

Draft Nursing and Midwifery (Amendment) Order 2017

The Committee consisted of the following Members:

Chair: Ian Paisley

Beresford, Sir Paul (Mole Valley) (Con)

† Collins, Damian (Folkestone and Hythe) (Con)

† Cummins, Judith (Bradford South) (Lab)

† Day, Martyn (Linlithgow and East Falkirk) (SNP)

† Djanogly, Mr Jonathan (Huntingdon) (Con)

† Drummond, Mrs Flick (Portsmouth South) (Con)

† Dunne, Mr Philip (Minister of State, Department of Health)

† Fitzpatrick, Jim (Poplar and Limehouse) (Lab)

† Greenwood, Lilian (Nottingham South) (Lab)

† Hall, Luke (Thornbury and Yate) (Con)

† Herbert, Nick (Arundel and South Downs) (Con)

† Lefroy, Jeremy (Stafford) (Con)

† Madders, Justin (Ellesmere Port and Neston) (Lab)

Mann, John (Bassetlaw) (Lab)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Nandy, Lisa (Wigan) (Lab)

† Stuart, Graham (Beverley and Holderness) (Con)

Sean Kinsey, Jonathan Whiffing, Committee Clerks

† attended the Committee

Eighth Delegated Legislation Committee

Wednesday 22 February 2017

[Ian Paisley in the Chair]

Draft Nursing and Midwifery (Amendment) Order 2017

I beg to move,

That the Committee has considered the draft Nursing and Midwifery (Amendment) Order 2017.

It is a great pleasure to serve under your chairmanship this afternoon, Mr Paisley.

The Nursing and Midwifery Council is the independent regulator for nurses and midwives throughout the UK. It sets the standards of conduct, performance and behaviour for more than 657,000 nurses and almost 35,000 midwives. To improve public protection and to address concerns expressed during investigations into systemic failures in the care of mothers and babies at the University Hospitals of Morecambe Bay NHS Foundation Trust, the draft order separates midwifery supervision and regulation, giving the NMC sole responsibility for midwifery regulation. It also makes a series of changes to modernise the regulation of nurses and midwives.

Specifically, the draft order does three things: it removes the statutory system of supervision and local investigation that is unique to midwifery in the national health service; it removes the statutory requirement for the NMC to have a midwifery committee, which again I think is unique in the NHS; and it improves the efficiency, effectiveness and proportionality of the NMC’s fitness to practise processes for both nurses and midwives. The Department of Health publicly consulted on the measures set out in the draft order and received more than 1,400 responses. The consultation highlighted concerns, in particular from within the midwifery profession, about the removal of both statutory supervision and statutory requirement for a midwifery committee, but the proposed legislation is required to enhance patient safety, to modernise the regulation of midwifery and to improve the fitness to practise processes for both nursing and midwifery.

The principles of midwifery regulation are based on a model that was established more than 100 years ago, back in 1902, when midwives worked as independent practitioners. Under the existing statutory provisions, supervisors of midwives, who are established in each of the four nations of the UK, have a role in investigating and resolving fitness to practise concerns at local level—that is, within their nation. Among the professions in the NHS, that system of supervision and local investigation is unique to midwifery. There is a lack of evidence to suggest that the risks posed by contemporary midwifery practice require that additional tier of regulation. More significantly, a number of reports have been critical of the system of statutory supervision, in particular the role that supervisors of midwives have in conducting investigations.

Following the completion of a number of investigations into complaints by the families of those affected by the tragic events at the Morecambe Bay trust, the Parliamentary and Health Service Ombudsman highlighted potential conflicts of interests in midwives investigating other midwives. The report stressed that the existing arrangements do not always allow information about poor care to be escalated effectively into hospital clinical governance systems or to the NMC. A subsequent report by the King’s Fund highlighted confusion resulting from local investigations being carried out in parallel with employer-led investigations. Similar concerns were expressed about the effectiveness of the statutory supervision of midwives in Dr Bill Kirkup’s report on the Morecambe Bay investigation.

Given the evidence set out in those reports, I am confident that separation of regulatory investigations from the supervision of midwives will be a positive step in enhancing public protection. To ensure that midwives continue to have access to support and development, the four UK nations through their chief nursing officers have collaborated to develop new non-statutory models of supervision to deliver those elements. While taking account of the requirements in each country, the four countries have been working within UK-agreed principles to develop employer-led models of supervision. Those models will have no role in fitness to practise matters concerning midwives. The new models of midwifery supervision will be introduced following the removal of the current statutory requirements and will build on the systems and processes for good governance and professional performance already in place through employers.

The second change the order will make is to remove the statutory requirement for the NMC to have a specific midwifery committee. The role of the midwifery committee is to advise the NMC council on matters affecting midwifery. The statutory requirement for the regulator to have a committee for a specific profession is unique to the NMC. In effect, it reflects a historical accident. The removal of that requirement does not prevent the NMC from establishing committees or groups in relation to midwifery; it simply removes the statutory requirement to do so.

The NMC is working to ensure that appropriate non-statutory routes are put in place so that the NMC council can continue to obtain expert advice on midwifery matters. To that end, it has already established a strategic midwifery panel to advise the NMC council on key midwifery issues and to develop strategic thinking on the future approach to midwifery regulation. The panel has representation from each of the four countries in the UK and the Royal College of Midwives. The NMC has also appointed a senior midwifery adviser to provide expert advice on midwifery issues. The NMC still has a statutory duty to consult persons who appear likely to be affected by any proposed rule changes and when establishing standards and guidance, including consulting midwives and those with an interest in midwifery.

I assure the Committee that the Government value the contribution made by all midwives to ensuring the informed and safe delivery of maternity services and the best outcomes for mothers and their babies. I hope the Committee is reassured that the changes are consistent with our commitment to the continued development of the midwifery profession.

The third set of changes concerns the NMC’s fitness to practise processes. In 2015-16, the NMC brought 1,732 cases to a conclusion before a panel at a hearing or a private meeting. The cost of those fitness to practise cases was more than £58 million—about 76% of the NMC’s budget. The changes in the order will enable the NMC to take proportionate action to address less serious concerns more efficiently and effectively while maintaining public protection.

The Department believes that the principles of better regulation centre on giving greater autonomy and flexibility to the regulatory bodies to enable them to deal more effectively with fitness to practise cases. Changes include new powers for the investigating committee to agree undertakings with the registrant or issue a warning or advice to a registrant, and replacement of the conduct and competence committee and the health committee by a single fitness to practise committee, where both conduct and health issues can be considered. Those changes will ensure that the NMC is able to respond to fitness to practise allegations in a more efficient and proportionate way, benefiting patients, midwife registrants and employers as well as nurses.

The NMC will need to amend its fitness to practise rules before some of the changes come into effect. The order of council with the proposed changes to the fitness to practise rules will be laid in Parliament for consideration. The changes that the order makes to the governing legislation of the NMC will ensure that the regulation of nurses and midwifes continues to be fit for purpose, with patient safety at its heart. I commend the order to the Committee.

It is a pleasure to serve under your chairmanship, Mr Paisley.

Few professions, if any, carry the respect, trust and affection of the nation like nursing and midwifery. We hugely value the role that all nurses and midwives play in caring for people who are sometimes in the most vulnerable conditions. In the current climate of an underfunded health and social care sector that is struggling to keep up with demand, we know that they are working harder than ever to hold our health service together.

As we have heard from the Minister, the proposed changes in the order affect two main areas: regulation and fitness to practise legislation. While we do not oppose the order in its totality, we have some concerns about the proposed changes to midwifery regulation that are reflected across the sector. I hope that when the Minister responds he will be able to allay any fears we may have about potential negative impacts.

It is fair to say that the current fitness to practise legislation is outdated and costly. As we know, about three quarters of the Nursing and Midwifery Council’s budget is spent on fitness to practise work, despite less than 1% of nurses and midwives being referred to it. That is against a backdrop of significantly increased registration fees in recent years, at a time when public sector pay has failed to keep up with the cost of living. That very significant call on the NMC’s resources is made because it is required to hold hearings in almost all cases and to hear the evidence even if there is no disagreement about the facts. Those hearings often take a number of days and are costly and time-consuming to organise.

We all know from speaking to constituents the immense strain those investigations bring, not only for the professionals who are being investigated but for the families, who often feel that the time the proceedings take only exacerbates an already very difficult situation. Even when the allegations are admitted, the case must go to a full adjudication. As we have heard, there are also elements of duplication in investigations.

We agree that the draft order will allow case examiners to streamline the system and have authority to issue warnings or agree undertakings with nurses or midwives. I understand—and hope—that that will avoid the need for hearings to take place in all cases where the facts are not in dispute and the circumstances are less serious, which of course would enable a resolution to be reached much more quickly. That would enable those under investigation to focus on the future more quickly than they can now. As the Minister said, the proposed changes will also bring the Nursing and Midwifery Council into line with other professional regulators, including the General Medical Council, which already has these powers.

Although we support the changes enabling swifter resolution in less serious cases, I am sure the Minister will be unsurprised by our request for an assurance that the right balance is struck between efficient and proportionate regulation, maintaining public confidence and protection at all times. With such changes to any system, it is vital to get that balance right. I would welcome hearing what the Minister has to say on that. There are also proposals to reduce the number of interim hearings, which will reduce costs, associated bureaucracy and the length of time that matters take to be concluded, as well as some of the undoubted stress individuals feel.

The Minister referred to the other significant changes specifically related to midwives, and acknowledged that there has been significant unease, about, if not outright opposition to, some of the changes that the Government are proposing. Although we often speak of nurses and midwives as one, it is important to remember that nursing and midwifery are, of course, two distinct professions with very different qualifications and roles. Given that in England the Nursing and Midwifery Council regulates many more nurses than midwives, it is easy to understand why midwives may be anxious that their voice will be lost if these change are pursued. Currently, their voice is amplified by the NMC’s midwifery committee, which advises the council on policy issues affecting midwifery practice, education, statutory supervision and ethical issues. As the Minister acknowledged, there has been concern in the profession about the proposal to abolish the legal requirement to have a committee—indeed, 91% of the midwives responding to the consultation were strongly opposed to the change. The Royal College of Midwives has warned that there can be effective midwifery regulation only if the body that sets the standards for the regulations has a good understanding of the context in which midwives work.

Although the consultation response has not led to any change in the legislation that is being proposed, I note that the concerns have been recognised by the NMC, which intends to reconstitute the midwifery panel, which will have a remit to provide strategic input into policy or regulatory proposals affecting midwifery. I also understand that the NMC has stated in clear terms that it remains obligated in law to consult midwives on matters that affect their profession and that legal requirement will not be affected by the draft order, as the Minister also acknowledged. The NMC has also indicated that it will be holding twice-yearly listening events where all midwifery views from across the UK can be aired. I understand the NMC is committed to creating midwifery-specific expert groups when it reviews matters such as pre-registration education standards.

This is not the statutory footing that the RCM would have wanted, but I understand that it has responded positively to the proposals. However, that is no reason for us not to keep a watching brief on the issue. Although the Minister has expressed his support for continuing to give midwives an opportunity to speak on these issues, I ask him to set out specifically the steps he will be taking to monitor and safeguard the distinct voice of the midwifery profession in the sector.

The order will also formally separate regulation and supervision, which, as we know, was a recommendation of Dr Bill Kirkup’s report into the Morecambe Bay NHS Foundation Trust. The report found that the hospital displayed

“a potential muddling of the supervisory and regulatory roles of Supervisors of Midwives”,

which was a significant factor in the poor response to the failings that occurred. We owe it to the families affected by Morecambe Bay to ensure that the recommendations are implemented. Therefore, we welcome the transfer of supervision to the organisations that employ midwives. That will provide much needed clarity about who needs to take action when things go wrong.

It is also vital to ensure that concerns about a potential loss of support and development are addressed. I therefore ask the Minister whether the Government will consider making available earmarked funding, either centrally or through NHS bodies, for the training and education of those midwives who will be undertaking roles in the new system of supervision. Also, what steps do the Government intend to take to monitor the roll-out of the new system? When he responds, will the Minister indicate whether he would be prepared to give an undertaking to report to Parliament on the effectiveness of the new arrangements following the first year of their operation?

It is clear where responsibility for supervision will rest following the implementation of the changes, but it is less clear whether the NMC will continue to be required to produce standards and guidance for midwives. Can the Minister confirm that that will be the case and that all changes, standards and guidance will continue to be subject to extensive consultation with the profession?

Removal of statutory supervision removes the requirement for local supervising authority midwifery officers, which are currently very senior positions at a national level in Wales, Scotland and Northern Ireland and at a regional level in England. The Royal College of Midwives has expressed concern that removing those positions will leave a significant gap in midwifery leadership within the profession, particularly in England, as the devolved Administrations already have well-established senior midwifery positions. I therefore ask the Minister to consider the proposal to appoint a chief midwifery officer at the national level and directors of midwifery within NHS England regional teams.

In conclusion, we do not oppose the measures. However, it is vital to ensure that public protection will not be weakened and that the distinct voice of the midwifery profession can be heard loud and clear. I would welcome any assurances that the Minister can give on that and answers to the specific points that I have raised today.

It is a pleasure to serve under your chairmanship this afternoon, Mr Paisley. I rise to seek reinforcement of the reassurances already articulated by the Minister and to echo some of the questions raised by my hon. Friend the Member for Ellesmere Port and Neston, the shadow Minister. I should point out that, as MP for Poplar, the historic location for the BBC flagship drama, “Call the Midwife”, it would be remiss of me not to speak, having been placed on this Committee. Indeed, my Whips Office or the Speaker’s office have demonstrated a sense of humour by placing me on this Committee and making it an obligation to make a contribution to this debate.

In Poplar, we still have several nuns’ residences. I have met constituents who were delivered by the nuns and midwives in Poplar in the ‘40s, ‘50s and ‘60s. Although the BBC series is a historical drama, it is still relevant in east London today.

I must confess I was slightly confused by the two briefings I received: one from the Royal College of Midwives and the other from the Nursing and Midwifery Council. On first reading, I thought one was in favour and one was opposed, but further and closer inspection demonstrated that that is not entirely the case. The RCM raised a couple of questions, as my hon. Friend has already explained. He said that it was concerned about the removal of the additional tier of regulation for midwives, which includes the supportive supervision at a regional level, the removal of the midwifery voice on the NMC in the new replacement structure, and the fact that the new systems will be non-statutory, which will make their existence in the long term potentially more fragile. The RCM seeks reassurance from the Government that the new systems will be enforced, particularly in the long term.

The NMC was much more supportive of the Government’s proposals. The briefing from Kerry Racher, the senior parliamentary officer of the NMC, indicated that the NMC forcefully welcomed many of the changes that the Government propose, and indeed advocated them. It quotes a number of reasons why it supports the changes. It says that they are changes that were requested following a number of critical incidents; the Minister referred to Morecambe Bay.

The NMC has long maintained that the legislation is out of date, which the Minister referred to a lot in his remarks. It has worked closely with the Department of Health to bring forward these changes and it welcomes the Secretary of State’s announcement that the Government would accept all the recommendations in Dr Kirkup’s report into Morecambe Bay. Finally, it says:

“The changes to midwifery regulation will strengthen public protection.”

In conclusion, I would welcome additional reassurance from the Minister because the two perspectives do not seem irreconcilable. I am reassured that my hon. Friend has indicated that the Opposition will not oppose these changes. I am grateful, Mr Paisley, for the opportunity to make these brief remarks.

It is a pleasure to serve under your chairmanship, Mr Paisley. I thank the Minister for his clear and concise explanation of the order. I will not oppose the order and, indeed, I welcome the changes in general because I believe that they strengthen public protection and bring midwifery regulation into line with that for other healthcare professionals.

I welcome the support of the hon. Member for Ellesmere Port and Neston, who speaks, again, with great clarity and thoughtfulness on behalf of Her Majesty’s Opposition, and the support of the spokesman for the SNP, the hon. Member for Linlithgow and East Falkirk. That support is much welcomed. I will try to address their points in a second. I would first like to make a suggestion to the hon. Member for Poplar and Limehouse, who gave us an interesting insight into some of the activities in his constituency. He should put himself forward to be a dad in the next series of “Call the Midwife”. I am sure he would be given a part if he could spare the time.

The hon. Member for Ellesmere Port and Neston specifically asked whether we are striking the right balance between efficiency and a proportionate response to regulation. He will not be surprised to hear me argue that we are. In essence, many of the measures are designed to bring regulation of midwives up to date with regulation of other professions across the NHS.

Removing a unique statutory provision to have a committee within the NMC is an efficiency issue. The proportionate nature of the change is that it provides more flexibility to the NMC in its fundamental role in addressing fitness to practise. We think that that is the most meaty issue in the order and that is where we will need to continue to monitor the effectiveness. That will be done on a routine basis through NHS England, in response to another question put by the hon. Gentleman.

The hon. Gentleman also asked whether we intended to appoint a chief midwifery officer. At present, the chief nursing officer is the professional lead for both nursing and midwifery and we intend that to continue. That role is supported by the head of maternity in NHS England, which will continue to be the case. What will be new is the structure of regional leadership for midwife professionals across England. There will be a regional maternity lead and a deputy regional maternity lead in each of the four NHS England regions. Those leaders will take up position once the new law changes, which, provided the order is approved today, will be from the beginning of the new financial year, 1 April.

The hon. Gentleman asked whether we would be funding training requirements for new supervisors. Of course, each nation will have its own responsibilities for funding trainers. In England, the standard NHS contract, which has already been entered into for 2017-18, sets out that providers must have systems in place to ensure that staff receive appropriate continuing professional development supervision and training in accordance with the clinical supervision of midwives guidance issued by NHS England. That matter has been considered in that contract, and I believe arrangements have also been put in place in each of the other nations.

The hon. Gentleman also asked whether there would be any negative impacts on midwives from the arrangements, given concerns raised in the consultation response. The important point is that we do not see the measures as downgrading midwives’ status in the NHS in any way. We absolutely recognise the important role they play in one of the most fundamental things that the NHS provides—enabling babies to be brought into the world in a safe environment. Midwives should not see the order as downgrading their status; we do not think it does. It puts them on a statutory footing similar to that of other professions. We shall continue to provide midwives with the professional training, support and recognition that they have always had.

As for a parliamentary review of the procedures, I am not inclined at this point to give the hon. Gentleman a commitment. We shall certainly carry out a review within the Department. NHS England, as I have said, intends to conduct monitoring. He may want to make a diary note and consider whether he would want to bring the matter to Parliament in a year or so. I should rather approach the matter in that way than give a commitment now.

I thank hon. Members for their contributions. I hope that I have addressed the questions that were asked.

Question put and agreed to.

Committee rose.