Wednesday 1 May 2019
[Mike Gapes in the Chair]
District Council Finances
I beg to move,
That this House has considered district council finances.
It is a great pleasure to serve under your chairmanship, Mr Gapes. I am very pleased to have finally secured a debate on the finances of district councils, which is an important subject. The fact that we got the debate now is testimony to the popularity of debates in Westminster Hall. I shall speak about a report that was published by the all-party parliamentary group for district councils in July 2018. Since our return after last year’s summer recess, I have consistently been applying for the debate, and we have finally got it, and with local elections tomorrow, it is extremely timely—persistence has finally paid off.
I am a Member of Parliament representing a district; I represent the borough of Rugby. I am a former district councillor and member of that authority, and very proud to have represented my community on the council and to have the opportunity to represent it in Parliament. As a former member of a district council, I strongly believe that they have a vital role to play in the next few years in shaping and delivering Government strategy, supporting local growth, building the homes we need and providing the preventive services that are necessary for sustainable health services.
To set the context, there are 192 district councils. In two-tier areas, they deliver 86 of 137 essential local government services to 22 million people, which is 40% of the population. District councils cover 68% of the country by area. One of their most important functions is as the housing and planning authority; they approve 90% of planning applications in their areas and enabled over 91,000 new homes to be delivered last year.
I am very proud to say that my local authority, Rugby Borough Council, saw 584 dwellings completed in 2017-18. It is a great example of a district that looks favourably on house building and development, and it has a very progressive attitude. I know the Minister saw that on his recent visit to Halton, which is an excellent example in my constituency of house building at scale, with a development that will consist of 6,200 homes by the time it is completed.
In two-tier areas, the county council area is divided into a number of districts, which each have an independent district council. I firmly believe that district councils are closer to their residents than are the vast majority of other forms of local government, which is one of the reasons I strongly believe that they should be protected. Rugby town hall is in the middle of our community. It is accessible by all residents and immediately identifiable; it gives a sense of identity to our community. I know there are pressures that are leading some areas to consider alternative arrangements—in particular, there is a move towards unitarisation—but in my area that would be neither practical nor in the best interests of our residents. Districts operate on a size and scale that makes sense to local communities, and they have a unique understanding of the residents they serve.
May I take this opportunity to congratulate my hon. Friend on securing this important debate? Blaby District Council and Harborough District Council, led respectively by Councillor Terry Richardson and Councillor Neil Bannister, are both excellently run. Does my hon. Friend agree that any proposal for unitarisation of the Leicestershire area is not welcomed by the district councils?
I share the views of my hon. Friend in believing that districts are the right-sized and best-located authorities to deliver a substantial number of services to local residents. I fear that some of that connectivity and identity would be lost in a larger organisation.
I will now talk about some of the things that district councils have been able to do. One key issue that came out of our report is that district councils have a proven track record of devising innovative solutions to transform public services by taking a lead in improving services and providing outcomes for people through better collaboration. That is a really important point, which we will come back to again and again. It is driven by a financial imperative in some instances, but in many ways it is driven by the desire to do things better.
District councils have a proven track record in building better lives and bigger economies in the areas they serve. Through their roles in planning and housing, they act as the building blocks for local economic growth, and in many ways districts work collaboratively with each other and alongside newly established local enterprise partnerships to deliver growth and support local businesses and industry. I believe that district councils also protect and enhance the quality of life by safeguarding our environment, which is an issue we will be considering later today in the Chamber. Promoting public health, leisure and a sound environment is an important role, creating attractive places to live and where people will want to raise their families and build an economy. Districts are also tasked with the challenge of tackling homelessness—again, their proximity to the people and knowledge of individuals is important—and the duty to promote wellbeing.
For district councils to deliver for their residents and the businesses in their area, it is important to ensure that they have sustainable and suitable levels of funding, which is the matter I want to address. It is why the all-party parliamentary group for district councils, which I chair, held a formal Select Committee-type inquiry on the finances of district councils. We published our report, “Delivering the District Difference,” in July 2018. I want to put on record my gratitude to the 60 local authorities that provided written evidence to the APPG, and I thank the seven district councils, including Rugby Borough Council, that came before us and provided oral evidence to the APPG in Parliament. I am also grateful to many parliamentary colleagues who sat on that committee, particularly the hon. Member for Stroud (Dr Drew), who took part in the evidence sessions and is here today.
Our report was a major piece of work, and we collaborated with the District Councils’ Network to ensure that we were working closely with the sector. I thank the DCN for its valuable contribution to the report. In our evidence sessions, it came across loud and clear that district councils under financial pressures have identified innovative and efficient ways of doing things differently to provide better value for money to local taxpayers. A recent Local Government Association report found that district councils have saved £224 million through sharing services with other districts and bodies, which is far more than any other type of council.
I will give some examples of shared working arrangements that my local authority, Rugby Borough Council, has with others. Rugby has a shared service on building control with Warwick District Council and works on procurement with our neighbours, Nuneaton and Bedworth Borough Council. A particularly useful case study in Rugby involves its working closely with Daventry District Council to provide local crematorium and cemetery services. On its own, neither authority was of a sufficient size to be able to deliver these services efficiently, and my constituents wishing to use crematorium services were obliged to make lengthy journeys to either Coventry or the other side of Warwick. There had been an aspiration for such a service in Rugby for some time, but it was recognised that, in isolation, Rugby was not of sufficient size to deliver it. By working with Daventry and providing a facility on the border between the two authorities, we have ensured that the residents of both local authorities have great provision.
National Audit Office figures show that district councils have experienced the most significant real-terms cut in spending power between 2016-17 and 2019-20, which has required them to be enterprising. One of Rugby’s overarching corporate priorities is to become financially self-sufficient by 2020. It is seeking to reduce its reliance on the sometimes arbitrary and variable central Government funding sources and take control of its sources of income through local taxation arising from economic growth and investment income. When I was a councillor, I was always aware of concerns that the pots of funding might or might not be available. They were sometimes arbitrary or time-limited, which meant that it was difficult to plan for the long term. Rugby aims to be financially self-sufficient so that it is no longer reliant on those variable sources. That will ensure better provision for my constituents in the long term.
All councils have had to work hard to achieve more with less. Between 2010 and 2020, councils in England will have lost almost 60p of every pound of central Government funding. For district councils, that equates to almost £1 billion. I know the Minister recognises the role that districts have played in identifying savings, and is aware of the burden that they have shouldered in recent years.
I thank my hon. Friend for his generosity in giving way again. The district councils in my constituency have highlighted the ever-increasing cost of waste and recycling services. Proposals to scrap a charge on green waste collection and introduce weekly food waste collections, although laudable, are likely to put significant financial burdens on district councils. Does my hon. Friend agree that, should district councils implement those changes, proper and full support is needed from central Government?
There is a role for central Government, but those are local, devolved matters for district councils. One of the good things about district councils is that, because they are close to their residents, they know and understand what is best for them. My hon. Friend draws attention to the important role that district councils play in environmental matters, which are of real concern to residents.
In recent years, districts have been given more freedoms and powers to stimulate their local economies. In our report, we urge the Government to commit to retain current incentives to help district councils deliver the homes that the country needs. We are keen to see the retention of the new homes bonus. My local authority in Rugby has a very progressive attitude to new house building and is doing well from the new homes bonus, which enables local residents to support the principle that it has adopted.
During our inquiry, the all-party group heard evidence about the savings and efficiencies that can be made in social care by increasing district councils’ capacity to deliver preventive services. Mannie Ketley, the head of service and chief financial officer at Rugby borough council, told us:
“What the districts have shown, working in conjunction with the county council, is that a very much joined up approach has been of huge benefit, so I am confident that as groups of authorities come together, districts are well placed to support in the delivery of social care…Something for districts to consider, or certainly for government to consider, is our role from a prevention perspective and the ability to allow district councils to levy a prevention precept much like upper tier authorities are able to levy that social care precept. There is a huge amount of recognition of the role district councils play at the prevention end of the spectrum”.
They do that through, for example, the provision of recreation facilities that enable people to get out into the open and enjoy the countryside.
The evidence and insights that the all-party group received led us to make seven key recommendations. We identified measures, flexibilities and incentives to stimulate local growth. I want to put them on the record and share them with parliamentary colleagues. The first and most important is that no district council should find itself in the position of negative revenue support grant. That would mean that councils hand over to the Government a proportion of the tax that they raise locally, which would be a real disincentive to grow the local economy. I will come to the way in which our proposals have been addressed.
We argued that the fair funding review should reverse the decline in district council spending power. We suggested that districts should be allowed the freedom to introduce more incentives. We said that measures to increase district spending power should include greater flexibility to raise revenue and introduce incentives to support local growth.
I have already referred to the new homes bonus. We argued that the baseline should be removed, and that there should be a long-term commitment to the new homes bonus. In fact, we went further and said that district councils should be given more financial incentives to deliver more homes. The time available to local authorities to spend right-to-buy receipts should be extended, and districts should be allowed to retain 100% of those receipts.
We spoke about our concern about the lifting of the borrowing cap—I will come to how the issues have already been dealt with by enabling district councils to spend the entirety of their funding. We drew attention, as Mannie Ketley did, to the role that districts play in prevention as housing and planning authorities. They provide leisure and recreational facilities, install home adaptions, tackle homelessness, offer debt advice and deliver social prescription. We also spoke about the need to establish a health prevention fund to support projects that deliver preventive services, which would in turn reduce the financial burden on adult social care.
I am delighted that the Government allocated extra funding in the 2018 Budget and the 2019-20 local government finance settlement, and that two of our recommendations have already been acted on. Just a week after we published our report, the Government announced that they would cancel the negative rate support grant for 2019-20, recognising the disincentive effect. The removal of negative RSG has meant an average saving of more than £350,000 for every district council that would otherwise have faced negative RSG, and more than £50 million overall.
On our recommendation that there should be no further changes to the new homes bonus and that the baseline should be removed, the pot of £18 million is welcome. For my local authority, Rugby Borough Council, no change to the existing threshold means that it would not receive any new homes bonus funding for the first 150 homes delivered each year. The Government have also announced the lifting of the housing borrowing cap, which will be a very significant and helpful move for districts, and more money has been made available through the rural services delivery grant.
The all-party group is delighted that the Government have responded and listened to the voice of districts. We are grateful for that response of recognising the need for change and listening to the voice of districts. At the conclusion of the debate, I hope that the Minister will update the House about the other recommendations that our all-party group made, in particular our call for greater freedom to deliver preventive health services. It is important to invest in such services for the broader welfare of our citizens. I will also be grateful if he outlines what consideration he is giving to the introduction of further freedoms and incentives for districts to grow their local economies.
As the Government look at the technical detail behind the future funding formula and business rates retention, I hope that the Minister will provide some reassurance that districts will continue to receive their fair share of funding. For many local authorities, there is a lack of clarity, and further rates reductions for some will mean a less reliable basis on which to plan budgets appropriately. All organisations, whether in the private or the public sector, benefit from a longer-term perspective, but the funding available from April 2020 remains unclear, as is how it will be distributed and the means of delivery. It is vital for the 2019 spending review to provide the right level of funding for local government, enabling councils to perform their role. Rugby Borough Council, for example, tells me that it faces several risks from the forthcoming funding reform and has concerns about whether it can continue to deliver the high level of services it provides.
The recommendations in our report have many positive aspects across all districts. I am delighted that the Government have already adopted many of them, and I look forward to hearing from the Minister what steps the Government will take in respect of the other recommendations we made.
I am delighted to serve under your chairmanship, Mr Gapes. I congratulate my friend, the hon. Member for Rugby (Mark Pawsey), on such an excellent exposé of the funding of district councils. I am delighted to be part of the group and to have played a small part in an excellent report. I look forward to engaging with the Minister again, and with my hon. Friend the Member for Oldham West and Royton (Jim McMahon), so that we can at least bring attention to bear on this important topic.
In advance of the debate, I asked my district council in Stroud what main aspects it would like the Minister to look at. I pay due regard to the council leader, Doina Cornell, and the head of finance, Andrew Cummings; both contributed to an outline of what they saw as the main funding formula issues. It would be pointless to go over the same ground as the hon. Member for Rugby, but I will reinforce what he said, which was borne out by the Local Government Association and the District Councils’ Network, both of which made excellent reports to allow us to make our contributions today.
Stroud would like the Minister to dwell on four main points. I have a couple of subsidiary ones, which I will talk about at the end. First—overwhelmingly so—is the issue of uncertainty in the sector. Local government in general faces uncertainty about the future funding regime; the forthcoming spending review will obviously have an impact on the finances of the sector from 2020-21, but we are also not sure about the new fair funding review, the changes to the new homes bonus and the resetting of the business rates baselines—they will all come together. They could be good news, but they could put local government under even more pressure.
My district was in a sense saved by the Government’s decision not to pursue the negative revenue support grant. We are one of the areas of the country in the business rates retention pilot scheme, but that is coming to an end and I am interested to know the Government’s future thinking. That all adds to the mood of uncertainty, however, and such a background makes it difficult for local authorities to set budgets. My hon. Friend the Member for Oldham West and Royton will have things to say about that.
On resetting the business rates baselines, the Government have made it clear that that is the direction of travel in which they wish to go, but they have not quite said how they intend to get there. So much depends on how the moneys already there are redistributed, and that will have an impact on district councils because we tend to be at the end of the train, rather than driving it—some of us might hope for a much greater say in how things are going.
That level of uncertainty is multiplied by the potential changes to the new homes bonus system. In Stroud district, that contributes £1.8 million, which is a not inconsiderable sum, and one that is important in allowing us to balance our budget. Again, will the Government say what they intend to do? We are talking about what the changes will imply after this year. If some of the suggestions are implemented, sadly many authorities including mine stand to lose out very badly.
Another big bugbear is the limited ability of small district councils to raise money through council tax. District councils are limited to a 3% ceiling, whereas upper-tier authorities have been granted some dispensation with the social care precept. The police have also been allowed to raise a much greater sum. I am a great fan of parish and town councils, and one of the reasons I am a fan is that they set their own budgets; they take the responsibility and are not capped.
The result—I do not know whether this is the case in Rugby as it is in Stroud—has been some offloading of responsibilities on to parish and town councils. That might be laudable, because the idea of subsidiarity and running things as locally as possible has merit, but the problem is that parish and town councils might be running things because they have to, because the district councils simply do not have the resources—although that gets us to pay attention to the difficult scenario of the threat of closure of such services. The District Councils’ Network is therefore clearly lobbying for what is called a prevention precept—the hon. Member for Rugby intimated that—and it will be interesting to know the Government’s attitude to that.
On housing, quickly—I am mainly looking at the funding per se of the councils—there are problems. Stroud District Council owns its own stock; it bought it for some £97 million. We are proud that we have built something in the order of 230 new council houses, which is a considerable increase for a small district authority. We could have the argument about the right to buy, which some of us feel is a real disincentive, but the problem is that although notionally the Government have said that the cap on borrowing has been removed, real hurdles remain in the way of driving forward that programme. At the moment, therefore, we are at a standstill, which is really disappointing, because it would be the way to deal with at least some of our problems of homelessness and of other means by which people get into the housing sector. I hope that the Government will look at what is happening, and why there is not the drive towards what some of us want to see, which is council housing at least being part of the solution, rather than being seen as a marginal element.
I have a couple of final points to make. Planning is always a real bugbear, because we are forever expected to provide more housing, which is right, and more jobs, which is right. The problem is that there are not necessarily the means to do that. The Government’s formula means that Stroud is being asked to provide something like an extra 48% on top of its normal provision, and the question of how that will be done is causing real heartache in communities. There are very few ways in which the provision of services can be guaranteed if the housing is provided, so the Government need to look at their planning proposals. That is all bound up, because it affects the new homes bonus, which is the incentive, but if the funding is not carried through, there is very little benefit for local authorities and the people they represent.
Waste is a difficult issue. Stroud District Council has a proud record of collection. It is one of the greenest authorities in the country and has a good record for collecting food waste. I will not go into the politics of this, but we have a new incinerator about to go live and the county is starting to remove tax credits for recycling. That is totally bizarre, because we talk about the need to drive up recycling and to avoid waste. I could go on at great length about that; I have said many things in the past about it and no doubt will in future. Would the Minister look at some of the ways in which the smaller district local authorities are penalised by what I see as a mad dash towards incineration?
I share the desire of the hon. Member for Rugby to get this topic heard. It is a pity that a few more people are not in the debate. We are a bit of an endangered species because so many authorities are going unitary. I was talking to the hon. Member for South West Bedfordshire (Andrew Selous) about that, because in Bedfordshire they are in the process of doing that. I support unitary—the Minister responded to my debate on unitary—but until Gloucestershire grasps the nettle, we have to do the best we can for our district. Many people look to that authority for the bulk of their services.
I hope the Minister listens to the need for certainty and proper funding, and that he recognises that those authorities are doing valuable work on waste and new housing, and more particularly on the services that are so important to everyday life.
It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for Rugby (Mark Pawsey) on securing this debate, although its importance is not reflected in the number of speakers. Nevertheless, that does not mean that the work done by district councillors across England is not critical and life changing to millions of people. I place on record my thanks to our councillors of every colour, and I wish every candidate success, in different degrees, in tomorrow’s local elections.
The vibrancy of local democracy is what communities are all about. Most of us have come into politics through local government, because we are passionate about the places we live in and the power of positive politics to make a difference. District councils reflect that in a special and unique way because of how grounded they are in the local population. They are important also because they are the primary deliverer of neighbourhood services. I think about what makes an area somewhere decent to live; it is those neighbourhood services that make life worth living—a decent park, good quality countryside, clean and safe environments, and access to cultural facilities such as libraries. They all make up the fabric of our local communities.
There are tensions between districts and councils, but generally they work well together and, between them, provide good quality services for our communities. Like every council in England, they are under huge financial pressure. It is a bit simplistic to look at a spreadsheet, which we do whenever there is a local government finance debate, and to dismiss the cash cuts to district councils as being quite small. Their budgets, however, are much smaller. The percentage loss, particularly across critical neighbourhood services, has been profound in many district council areas. Rugby has experienced a real-terms cut of 47% to cultural services for recreational sport, open spaces and tourism. People feel the impact of austerity even at a district level.
That brings me to the fair funding review. We can all argue about how we have ended up here—we do that on a regular basis. The challenge, which is similar to that for adult social care and children’s services, is that most of the issues should not be party political. They are not political—they are about the delivery of public services in local communities. Regardless of the places we represent and live, we all want good quality public services to be available to everyone.
Political parties need to unite on some of the issues—local government does that anyway—and find long-term, sustainable solutions to how we fund local public services. We have a fair funding review today, but who knows when a general election will be called? A change of national Government matters almost more to local councils than to any other part of government, central or local, because it has a direct implication for how they are financed.
Every Government have always moved money around to favour the areas where they have strong representation. When there was a Labour Government, my locality had enough money to fund public services. It was never quite enough because we always wanted to go further and do more, particularly on housing and the local economy. Then, we had a change of Government and there was a shift. There is a good chance that when the cycle comes back around, the reverse will happen. That is not the way to fund sustainable public services. It does not give credit to our public servants who work for local authorities and it is not fair on the local councillors who have to deal with that cycle of spending turmoil. It is not right for the taxpaying public, either.
On cross-party consensus, the Local Government Association—I declare an interest as a vice-president—carried out an independent review of local government funding a number of years ago. It looked at the then current state and at what type of future structure could provide sustainability and value for taxpayer money. We need to look at some of those ideas.
I am listening carefully to the hon. Gentleman, who seems to be making a pretty strong case for local authorities becoming self-sufficient. Is that what he is arguing?
I understand the calls for that, but I stop short of it, or anywhere near it, because the ability to fund local government public services is so heavily dependent on property taxation, which causes huge geographical inequalities across the country. We want a funding formula and structure where funding follows need. If we give local authorities financial independence there will be significant winners but also significant losers. My strong view is that council tax places a disproportionate burden on local taxpayers in terms of overall taxation. It has been expected to fund too many local public services while the central Government grant is being reduced. Business rates are near breaking point. Those taxes serve a very important purpose, but they also have significant limitations.
Whether it is a district or unitary council, the connection between the tax people pay and the neighbourhood universal services they receive is very healthy for democracy and transparency in governance. I am not sure whether the same is true of social care and children’s services, which in general benefit a smaller number of the local population. Those services are targeted, not universal, and have no relationship to local property values in 1991 or the business rate base that has been built up over hundreds of years. At some point there will have to be a separation of the two, for a purer connection between the council tax that people pay locally and the neighbourhood universal services they receive in return. There should be a properly assessed fair funding formula to ensure that funding goes where older people need care, children need social services, and homes need to be built to resolve homelessness. If we were to do that, it would be a start.
The LGA’s independent review also recommended that there ought to be an independent body to assess the total requirement across England. It would not, of course, set the Treasury’s Budget, but it would make recommendations to the Treasury about the total sum local government needs for the requirements placed on it by central Government. If the recommended sum was £1, the Government might decide to provide 90p of funding and distribute that according to an independently assessed fair funding formula.
Another suggestion, which has huge merit, is that we should establish local public accounts committees. Our councillors see on a daily basis where money is spent in their areas by a range of Departments, in a way that almost no other elected representative does. That provides important insight into how money could be used to better effect. Establishing a local public accounts committee would effectively allow a local authority to hold the ring on all the public sector spending in its area—to ensure that there is no duplication, that any gaps are identified and filled, and that people can work more collaboratively for better public services. Our councillors have proved, and all the evidence shows, that they are best placed to deliver public sector efficiency. They are rooted in the community, they know how to deliver public services, and their insight would help the whole of Government.
To be honest, however, even after all that, there is still not enough money in the system. We know that there will be a funding gap of more than £3 billion by the coming financial year, and by 2024-25 that gap will have increased to £8 billion. The truth is that people are living longer and need care. We know that if we do not give them care in their homes, we will put pressure on the acute sector and the NHS. We also know that children need safeguarding. We can have good processes and screening in place, but ultimately we have to provide protection for young people. The threats are increasingly complex, particularly with the growth of online social media and so on, and councils need the capacity to deal with that. Many are struggling under the weight of those two pressures.
Will the Government meet us halfway and agree to take some of the politics out of local government spending, for the benefit of all of local government? Will they be radical in challenging the Treasury to cough up for once and provide the money that is needed to fund local public services? Will they show leadership and stop pitting council against council? This is not about urban areas and rural areas, or counties, shires and unitaries; this is about local people and local public services, and every man, woman and child in England deserves decent public services.
It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate my hon. Friend the Member for Hertford and Stortford (Mr Prisk) on securing the debate and on his work in this place to champion the role of district councils, which he does with passion and eloquence. I have been in this job for just over a year; I have enjoyed all the work I have done with him, and district councils are lucky to have such a champion for their cause in this place. I also pay tribute to the hon. Member for Stroud (Dr Drew), who deserves credit for his focus on the issues concerning district councils.
While I am on the subject, my good friend John Fuller, the president of the District Councils’ Network, is an irrepressible advocate and champion for district councils. I am sure the only reason there is slightly lower attendance at the debate than usual is that everyone is out campaigning hard in their local communities for the district council elections. I join the hon. Member for Oldham West and Royton (Jim McMahon) in wishing everyone well on Thursday.
We are here to discuss the “Delivering the District Difference” report, which was released some months ago. I was pleased to be able to attend its launch, and I pay tribute to everyone who contributed to the production of that fantastic document. As my hon. Friend the Member for Rugby pointed out, it highlights that district councils are at the heart of our communities and our system of local government. They cover two thirds of the country and deliver 86 out of 137 essential local government services.
I am fortunate to come from a two-tier area, with fantastic district councils in Hambleton and Richmondshire. I have seen as I have travelled around the country visiting countless other districts that they deliver high-quality services, ensure excellent value for their local taxpayers and, as we heard from all the Members who contributed, remain incredibly close and connected to their communities. We should be very grateful for that.
I am pleased to say that this Government are determined to continue supporting district councils. We heard about the seven points in the report, but I thought I would frame my remarks by looking at the two things the District Councils’ Network highlights as the key roles of district councils: building stronger economies and providing better lives for their citizens. In discussing those two overarching roles, I hope to pick up at least the seven specific points in the report, as well as others that Members raised.
District councils are integral to the UK’s future prosperity. We talk a lot about the Budget, and my right hon. Friend the Chancellor is an important figure, but our prosperity as a nation will be built bottom-up, community by community, neighbourhood by neighbourhood and district by district. District councils have a vital role in driving economic growth in their areas—indeed, only that economic growth can pay for the vital public services that we all care so much about.
When talking about what we have done, business rates are a great place to start. The business rates retention scheme is yielding strong results; local authorities estimate that they will keep more than £2.5 billion in revenue from generating growth this year, on top of the core settlement funding we debate so much in this place. In the current year, there are 15 75% pilot pools, which were selected through a competitive bidding process. They cover 122 local authorities, 83 of which, crucially, are district councils. We heard from the hon. Member for Stroud about the importance to his area of being part of that pilot programme last year. We plan to deliver 75% retention to the entire country from next year. That will give districts even more control of the money they raise through their own economic success.
On a related theme, building stronger high streets is one of the great pressing issues of our time. This Government understand that a thriving high street is at the centre of any local community’s vibrancy and success, and it is a mark of our confidence in district councils that we have trusted districts to lead the way. We announced a £675 million high streets transformation fund in the last Budget, and, as we are seeing, districts will take the lead in applying for those funds. The changes we are making to our planning system are pivotal to giving districts the power they need to shape their local high streets and areas. District councils are also at the heart of the Government’s ambition to achieve nationwide full-fibre broadband coverage by 2033. The revised national planning policy framework requires priority to be given to full-fibre connections in existing and new developments.
While I am on the topic of growth, I want to pay tribute to the innovative work across local government to drive up efficiency and creativity. We have seen the merging of district councils in East Suffolk, West Suffolk, and Somerset West and Taunton, as district councils seize the opportunity to improve services and drive efficiencies for their communities. We heard from my hon. Friend the Member for Rugby about the creative shared working agreements that his local council has entered into, striving at every turn to provide better value for money for its residents by improving service delivery. We also heard from my hon. Friend the Member for South Leicestershire (Alberto Costa), who is no longer in his place, about the fantastic work by Harborough District Council and the efficiency it has created with its neighbour, Blaby District Council, to ensure that its taxpayers benefit from low council tax bills and high-quality public services.
Districts are well placed to innovate in that way. Given their smaller size, they can be agile and quick to respond. I see them as the entrepreneurial arm of local government, as was demonstrated in the recently announced £7.5 million local digital fund, which I was pleased to initiate and launch. Two of the successful bids for the first round of funding included a host of district councils, which will use that funding to explore ways they can use cutting-edge artificial intelligence technology and better data management in their authorities. I have repeatedly highlighted the social prescribing model of Adur and Worthing Councils as one that others should look to follow. They have been consistently at the cutting edge in driving digital transformation in local government.
Economic growth is not everything we should be focused on. As the District Councils’ Network has mentioned, creating better lives for our residents is equally important. Indeed, district councils are at the heart of helping the most vulnerable in our society to live those better lives.
We saw in the report and heard in the speech made by my hon. Friend the Member for Rugby much about the important role that district councils play in prevention. Although clearly we are not fully there yet, we have seen Government responding to that need and recognising the important role that districts can play. For example, the disabled facilities grant is part of the Government’s commitment to help older and disabled people to live more independently. We established the grant to help local authorities to fund home adaptations, keeping people in their homes. The grant has more than doubled to over £500 million this financial year. Indeed, Rugby District Council has been allocated more than £2 million since 2015. Hopefully that represents a positive step in the direction of recognising the role that districts can play in prevention. If not fully the way to a precept, it is certainly a step in the right direction.
My hon. Friend also touched on homelessness and rightly highlighted that districts are on the frontline of reducing homelessness. Following the introduction of the Homelessness Reduction Act 2017, between April and June last year more than 10,000 households secured their existing accommodation or were helped to find alternative accommodation through the new prevention and relief duties. Local authorities received an additional £72 million to carry out the new duties and are leading policy implementation through their role on the homelessness advice and support team.
We heard from the hon. Member for Oldham West and Royton about the importance of parks, and I fully agree. Parks create communities that we want to live in, and make people proud of the area that they call home. They are the green lungs of our society.
One thing that district councils do is planning, ensuring that we have an ordered and adequate amount of housing land available and so on. Is it not also important that there should be adequate funding for enforcement? In my area we have the two excellent district councils, North Hertfordshire and East Herts, but East Herts is having to spend a lot of money tackling cases of intentional unauthorised development, particularly by Travellers. Such action is very expensive. Does my hon. Friend agree that adequate funding needs to be allowed in all settlements for such enforcement?
My right hon. and learned Friend makes an excellent point about an issue on which he has represented his constituents many times in this place. Just last week I responded to my hon. Friend the Member for Mole Valley (Sir Paul Beresford) in an Adjournment debate on this topic, and I highlighted that exact issue. Enforcement is important, as a recent consultation picked up.
Although this area is not my specific responsibility, the Secretary of State is considering, and I think has already committed to, making more funds available later this year—£1.3 million, I believe—to district councils through the planning delivery fund to tackle this exact issue, and I know that my colleagues in the Home Office are considering greater powers for the police and other bodies to enforce in the first place. I hope my right hon. and learned Friend knows that the Government take seriously the inconvenience and distress caused to settled communities through illegal and unauthorised encampments, and that we are committed to making improvements.
It is important that parks and green spaces are well funded. That is why the Government launched the £1 million pocket parks fund in 2016, which led to the creation of more than 80 new green spaces for local communities to enjoy. That fund had a phase 2 earlier this year, with almost 200 new pocket parks created. Districts are again are playing the lead role in that work.
The Minister needs to demonstrate some balance and reflect that there have been real-terms cuts in open space funding of 41% and in sports and recreation of over 70%. If the Government are committed to parks, open spaces and a quality environment, what will they do to replace the funding cut so far?
Funding for all green spaces and such services is not ring-fenced by central Government. It would not be right for me, sitting in Whitehall as a Minister, to dictate to every single local authority how it should prioritise its resources between social care, homelessness, parks and planning enforcement. Every area will have different priorities, and it is right that local authorities make those decisions. The Government recently unveiled a range of initiatives around parks—not just the pocket parks programme but an additional several million pounds of funding for the renovation and upkeep of parks or children’s playgrounds that have fallen into disrepair. We have established the Parks Action Group to bring people from the industry together, and we funded the Heritage Lottery Fund and the National Trust with money for their accelerator to innovate new parks models. Indeed, we are also developing a new apprenticeship standard for 21st century parks managers. On parks and green spaces the Government are firmly on the front foot, supporting local areas to ensure that their green spaces are there for their communities.
To the hon. Gentleman’s broader point, I would be the first to acknowledge that all local authorities, whether district, upper tier or unitary, have faced difficult times over the past years. They deserve enormous tribute for the fantastic job they have done in ensuring high-quality public services and public satisfaction in what they are doing at a time of constrained finances. That is thanks to their innovation and creativity, as was put so well by my hon. Friend the Member for Rugby. We all know why we were in that situation: when the Government came into office in 2010, we were left with a £100 billion deficit, and savings had to be made across government. Again, I pay tribute to those in local government for playing a starring role in helping to bring our public finances back to a sustainable position.
Housing was mentioned by many speakers. Building the homes that our communities need is another great challenge of our time, and the Government have placed trust in districts to help solve it. One key recommendation in the report was the removal of the housing revenue account borrowing cap. That was the No. 1 request from districts, and I am pleased that the Government have responded to that, which has unleashed the potential for districts to get on and build the homes we need. Similarly, the Government listened to district council calls for continuity and stability on the new homes bonus and responded by committing an additional £20 million to maintain the baseline this year, ensuring that district councils will receive more than £300 million in new homes bonus payments in 2019-20. Through all these measures, we are making every effort to create a housing market that works for everyone, and in doing so creating a country that works for everyone.
The hon. Member for Stroud mentioned uncertainty, and I acknowledge that issue. We are at the end of a spending review period, so naturally there will be some uncertainty as one set of programmes comes to an end and we wait for the spending review for certainty about what will replace them. The Government recognise the role that incentivising districts and authorities more generally to build houses has played in helping to get the number of new homes up to its highest in more than a decade. There were more than 220,000 last year, and I am sure that at this moment my hon. Friend the Minister for Housing is considering how best we can continue to incentivise local authorities in the new spending review. I am always committed to providing certainty as early as possible for councils of all stripes so that they can make the long-term plans that we have heard are so important.
It is worth dwelling for a minute on housing. I visited the constituency of my hon. Friend the Member for Rugby to see the fantastic work of his local council, replacing old high-rise blocks and improving the stock of houses for social rent. As my hon. Friend said, the council deserves credit for being on the front foot, forward thinking and keen to get on and provide the homes that our young people, and indeed all our communities, need.
I thank my hon. Friend for calling the debate on this vital issue. On my list of seven things, the one I have not touched on is freedom and flexibility. Perhaps this goes to the heart of the tension between the Government and the Opposition on how much to trust local government to get on with it. I am firmly and instinctively a localist. I want to be able to give and devolve powers down to the lowest possible level. It is good for our democracy and for our civic society if decisions are taken closer to the people they affect. I will be arguing where I can during the spending review process for greater freedoms and flexibilities for all local authorities. Indeed, at every meeting and engagement I go to, I ask local councillors, whether they are from parish or town councils all the way up to big metropolitan devolved mayoral administrations, for the ideas they have that I can debate, kick around with the team and put into the mix when we come to the spending review.
I will first take an intervention from the hon. Member for Oldham West and Royton.
It is part of the nature of this place that we can be mischievous at times, but let us not be under any illusion: this tension is not caused by trust in local government. We all respect the role that councillors play and we trust them to know what is best for their area. Fundamentally, this is about the sustainability of local council finance and the historical local tax bases that inform an entirely devolved financial model. That is the only tension—this is not about trust; it is about financial sustainability.
I thank the hon. Gentleman, and I will now take an intervention from my right hon. and learned Friend.
Does the Minister agree that freedom and flexibility, particularly in housing, can provide settings for housing estates that fit the local area? Hertfordshire has a lot of garden conurbations—Welwyn garden city, Letchworth garden city, and so on—and we try to create settings for future buildings that include those garden features where possible. Other parts of the country also do their thing well, and over the past 30 years, housing settings—particularly public housing, but also more generally—have improved hugely, and that is down to the offices of district councils.
I firmly agree with my right hon. and learned Friend. Planning and housing can be contentious in local areas, but one way to relieve that tension is to ensure that local communities feel that they are shaping the developments taking place around them. I saw that when I visited my right hon. and learned Friend’s constituency, and his point is well made.
The hon. Member for Oldham West and Royton asked the Government to be radical. They have been radical by introducing neighbourhood planning. They have devolved planning power to local communities, often at parish or town level, so that that community can create its own neighbourhood plan, supported financially by incentive payments over the last few years. That plan is then given significant and strong legal weight in the planning process, which puts local communities, at a small level, in control of their destinies on the ground. That is central Government sitting here in Whitehall, being radical, and trusting and empowering local communities to construct the housing that they need and think appropriate for their areas.
I can debate this issue with the hon. Gentleman, but we must recognise that there are two sides to this coin. If one argues for more freedom, flexibility and trust in local government, one must also believe that local governments are able to shape their own destinies. It is no good saying that local governments are not able to sustain themselves and require constant handouts from central Government, yet also saying that they should be empowered to do everything they want. If central Government are shovelling money around the system, national politicians will always rightly be in charge of that system of redistribution. The more that money is raised locally, the more that local government will have the right to say, “Let us do things the way we want. You do not have the right to dictate to us what we do because you do not provide us with our funds.” There will of course be differences in the abilities of different areas to raise funds, and there will always be some element of redistribution, but local areas cannot be considered completely static entities with no ability to be creative, dynamic and improve their financial sustainability.
If the Minister is arguing in favour of growing the local tax base, we are entirely in agreement. If local authorities can demonstrate that through their actions they have grown the local economy, and therefore the local tax base, we should discuss how they benefit from that success. That is not the same, however, as the historical inherited tax base that many local authorities rely on for their funding, which includes the housing stock and business rate base. We need to separate out the two things. We need fair funding to ensure that public services are properly and sustainably funded, and a proper incentive for local authorities to grow the local economy and tax base.
I am pleased to say that that is exactly what the Government are doing. The fair funding review is a blank sheet of paper on which we can consider the relative needs of local areas. It is bottom up, and driven analytically and empirically by the evidence, so that we figure out the right element of need for each local area, and then add a system of redistribution to ensure that funding gets to the right place. I am pleased the hon. Gentleman supports the incentive mechanism. An argument I hear a lot—I think I have also heard it from him, so I am glad if I misheard it previously—is when councils say that they have no ability to grow and will therefore need more handouts. I would take issue with that. Yes, the starting bases may be different, but that does not mean that areas cannot look creatively and entrepreneurially at how to create growth and generate resources for their local community. I believe in growth and driving prosperity locally, because I think that is the only sustainable way to pay for public services. Whether money comes from national or local government, it will come only if the economy is growing and generating tax revenue, and that is why I am keen to focus the conversation on driving economic growth.
This has been an excellent debate, and I was glad to hear all the contributions on the importance of district councils. Funding is important, and the big point is the elimination of the negative revenue support grant—I am not entirely sure that the hon. Member for Oldham West and Royton supported that when we unveiled it in the local government finance process. That is worth almost £153 million to the local government sector. District councils were big beneficiaries of the Government ensuring their commitment that the business rates baseline would not change over that period. I am glad that the Government were able to meet that big ask, which benefited 140 shire districts.
We all agree about the vital role of our district councils, their connection with communities and proximity to those affected by their decisions, and the importance of those decisions in ensuring that communities enjoy stronger local economies and better lives. It is my pleasure to represent district councils for the Government. I pay tribute to everything they do, and will continue to champion them for as long as I have this role.
The debate has focused mostly on finance and funding, but it has been a valuable opportunity to consider the important role that district councils play in communities, and the important functions that they deliver. I am grateful to colleagues who spoke about the roles of their district councils and some of that innovative work, and to the hon. Member for Oldham West and Royton (Jim McMahon) for his reference to the neighbourhood services that district councils provide. It seems that there is a benefit to the delay between asking for a debate and securing it, because it gave the Government time to respond to many of the issues raised, and I am pleased they have taken those points on board.
I was interested in the Minister’s emphasis on stronger economies and the role of district councils in building those economies and developing high streets. I am also delighted that he took on board the bit about better lives. This is not always about finance and pounds and pence; it is about lifestyles and the benefits that councils can bring to the lives of individual residents. I am grateful to the Minister for his remarks, and for the opportunity, once again, to highlight the important role played by district councils.
Question put and agreed to.
That this House has considered district council finances.
England Coastal Path
I beg to move,
That this House has considered the effect on landowners of the proposed England Coastal Path.
May I say how nice it is to see you in the Chair, Mr Gapes? I applied for this debate following representations from a number of small landowners in my constituency who face having part of their land expropriated by a Government agency, without compensation and against all their objections. That agency is Natural England, and the land being expropriated is being used as part of the England coastal path, which seeks to ensure that the public have access to England’s beautiful coastline.
While in some quarters that might be seen as a commendable and worthwhile aim, it is worth pointing out straight away that the justification for the original legislation for the coastal path was seriously flawed, because 70% of the coastline was already publicly accessible and an additional 14% was owned by the Government or large industries, with only 16% being in the control of private landowners. In addition, significant areas of that 16% were sites of special scientific interest and so could not be used.
The whole project is several years behind schedule and has put an additional strain on an already stretched public purse. Even if the scheme was good value for money, which is arguable, I believe it is simply wrong to route the path, without consent, through land that has been lawfully owned, kept and maintained by small family farmers and businesses, often for many generations.
Worse still, parts of the proposed route will put at risk not only the safety of grazing animals, but some of the people who will be using the path. The people who have contacted me are not major landowners with thousands of acres, but small-scale owners for whom the businesses they run on their land are their only source of income. They are little people who feel they are up against an overbearing, mighty, all-powerful state, and they are frustrated and angry at their treatment.
Is my hon. Friend saying that small landowners are facing a disproportionate burden that is not being acknowledged by the big industrial owners of some of the land, and that that is affecting their businesses?
My hon. Friend is right. That is exactly what I am saying, and it goes further: Natural England is not showing any common sense but treating everybody the same, and that is simply not right.
To better explain the anger, I will set out some of the complaints that those landowners have relayed to me. I will begin by highlighting what is happening on the Isle of Sheppey, which lies adjacent to the Thames estuary and forms part of the Medway estuary. Parliament has made clear that the coastal path legislation is about access to the coast, not to estuaries, but Natural England is ignoring that guidance and pushing forward its plans for a path around the Isle of Sheppey, including along the island’s northern coastline.
I am grateful to my hon. Friend for introducing this timely debate. Is he aware that I promoted a private Member’s Bill, the Coastal Path (Definition) Bill, the main purpose of which was to omit section 301 of the Marine and Coastal Access Act 2009, which deals with river estuaries? In my constituency, the proposal is that the path should go right up into Christchurch and across the River Stour, rather than across from Mudeford to Hengistbury Head, which would be a much more direct coastal route.
I must be honest and say that I was not aware of my hon. Friend’s private Member’s Bill, but since he promotes more private Member’s Bills than all other hon. Members put together, it is hardly surprising that I would not remember that particular one. However, I am delighted to hear that it is not just my constituency that has concerns about the legislation.
Part of the north of Sheppey is given over to farming and holiday-related businesses. One of the families affected by the proposed route is that of Clive, Maria and Gary Phipps, who live on Connetts Farm. To survive financially, they have had to diversify into other activities, including fencing contracting, holiday lets, a farm and forest school and wild camping.
The latter activity, which allows campers to use any suitable land on which to pitch their tents, was last year judged a winner by the camping organisation Pitchup.com, with a review score of 9.8 out of 10 for clifftop camping. The biggest appeal for those campers is that they have exclusive use of the land and the peace and quiet it provides. For a few days they are able to experience a simple life, back to nature and away from such things as interlopers, public footpaths, uninvited visitors and dogs.
Hon. Members can imagine the anger felt by the Phipps family that, despite the land’s already being accessible to those paying campers, Natural England wants to include it on the coastal path. One of the problems that poses for the Phipps is that people using the path will be able not simply to walk along the clifftops, but to loiter, picnic, cycle, pitch a tent free of charge and even have a barbecue. If that happens, the whole attraction of wild camping will be lost, which would be a major blow. As Clive Phipps told me:
“Having to accept a public footpath on our land will completely destroy any business we get from the camping facility and will, I’m sure, affect the viability of our holiday lets, because most of the people who come to stay with us, value the privacy and security offered by our little piece of England.”
The irony is that one of the reasons that Natural England wants to run the path through Connetts Farm is that the neighbouring holiday park owner refuses to allow access through his land. He is able to do so because the legislation protects holiday parks and, quite rightly, only allows the path to cut across a park with the owner’s consent. Unfortunately, small businesses such as that run by the Phipps family are not afforded the same protection, and that is simply unfair.
Other family-run farms and businesses sited along the north Sheppey coast are similarly being discriminated against. For instance, the path would run as close as 6 metres away from the house of one of those families. The property cannot be fenced off to protect livestock and the owners have been given no clarity on issues such as liability, should people using the path injure, or be injured by, livestock.
The landowners are also fearful for another reason. The north Sheppey cliffs are unstable and steep, with regular mudslides that see the clifftop disappear. The coastguard helicopter is often called out to rescue people stuck in the mud created by the erosion, yet the proposed path will increase access to that dangerous environment. The risk is even more unacceptable because there are safer and more stable routes for walkers, further away from the cliffs. Yet Natural England refuses to listen to landowners who have witnessed so many near misses, where people straying on to the cliffs have been lucky to escape with their lives.
The danger is summed up by another of my constituents, Susan Goodwin, who told me:
“These cliffs are particularly unstable, and people are constantly getting stuck, requiring rescue by the coastguards. The local council even closed an old footpath to Barrows Brook because of safety issues. Allowing people to wander along the cliff edge is madness”.
Of course, if the cliffs were protected to prevent erosion, the risk would be reduced. Indeed, one of our local farmers put forward a proposal to protect the cliffs by using construction spoil to construct a coastal park in the area. Therein lies another irony: Natural England objected to that plan, because it wants the cliffs to erode. Mr Gapes, you simply could not make it up.
Landowners living on the Isle of Sheppey are not the only constituents who are alarmed at what is happening. Let me give a small example. Lower Halstow is a small village on the mainland that lies on the Medway estuary marshland. The area is popular with walkers, who use the well-established Saxon Shore Way—a path that opened in 1980 and gives fantastic views of the estuary and marshes. However, rather than utilising the Saxon Shore Way, Natural England is insisting on expropriating a farmer’s land to run another coastal path through the farm to the estuary, despite there being no requirement in legislation for the path to continue into an estuary. The landowners believe that that new path will rip the heart out of their farm and have a serious impact on the wildlife habitat that has been carefully nurtured over many years.
Let me quickly explain how that came about. The sea wall that protects the farm was privately funded by the family 60 years ago. That wall has helped to conserve and grow the habitat. The protection of what is an incredible Ramsar wetlands site is the responsibility of the landowners, and they do not begrudge or shirk that responsibility. Now, however, the route of the proposed path will allow free and unfettered public access across a very vulnerable site. One must question the cost implications of creating that section of the path, given that Natural England itself has said that it does not anticipate a great increase in the number of walkers along it, compared with those using the existing Saxon Shore Way.
Let me read out a quote given to me by another landowner:
“The sole benefit of this scheme is that in some areas it has created more comprehensive access for the public, something that could have been achieved with landowners in a much simpler way, using a carrot and stick approach, rather than the mighty sledgehammer of poorly constructed legislation to crack a small nut!”
I could not agree more. Frankly, this is essentially a land grab that totally contradicts Natural England’s claim that it takes into account land management by landowners. Only somebody or some organisation that has never actually farmed could pursue such a policy.
In addition to the anger and frustration, my constituents have followed the process with growing disbelief. They simply cannot understand why their views and local knowledge have continually been ignored by Natural England. It is baffling that such a worthwhile national project is being delivered in such a draconian way, unnecessarily affecting negatively the lives and livelihoods of the long-term custodians of our countryside.
I would therefore like the Government to take the following steps to bring some common sense into implementation of the scheme: first, make it clear to Natural England that coastal access is about access to the coast and not to estuaries, such as the Medway estuary; secondly, make it clear that Natural England is not expected to provide full coastal access around estuaries and that existing paths, such as the Saxon Shore Way, are considered suitable alternative means of circumnavigating an estuary; thirdly, encourage Natural England to signpost existing estuary trails from the new coastal path, so that the public can use them as an alternative route when circumnavigating rivers and estuaries; fourthly, instruct Natural England to extend to all small landowners who offer holiday accommodation the protection given to holiday parks; and fifthly, instruct Natural England to pay greater attention to the dangers presented by cliff erosion when planning the route of the coastal path.
My constituents need help, and I urge my hon. Friend the Minister to give them the help and the justice that they deserve.
It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate and my hon. Friends the Members for Christchurch (Sir Christopher Chope) and for Henley (John Howell) on contributing to it. Although Lord Gardiner is the Minister responsible for policy when it comes to the England coast path, I am of course happy to respond to the debate, but I will ensure that a copy of Hansard is given to my noble Friend, so that he can respond to some of the specific queries that my hon. Friend the Member for Sittingbourne and Sheppey has raised.
In relation to delivering the coastal path around England, I believe that the intention of the law is clear. The practice that Natural England is supposed to follow is that the needs of landowners are balanced with the aspiration to create a continuous route around the coast of England that will allow walkers to enjoy our stunning coastline, supporting tourism and the visitor economy in rural areas.
Will the Minister give way on that, because it is a very important statement? She is effectively saying that Natural England should be using common sense and balancing the needs of the landowner with the need for a path. Is that right?
The duty is on Natural England to create this path around the coast of England. It builds somewhat on rights that were given with the right to roam under the Countryside and Rights of Way Act 2000. Very specifically, Parliament, in the Marine and Coastal Access Act 2009, placed a duty on Natural England to identify this route and a margin of land adjacent to the route for people to use for rest and recreation. Yes, this is about getting the balancing element right with the specific design of the path, but there is, as far as I am aware, no exemption for Natural England to ignore parts of the coast of our country in that regard.
England has about 2,700 miles of coastline, and 70% of that already has a legally secure right of access, as my hon. Friend pointed out. However, there is no doubt that in places the continuity of the access is patchy, meaning that walkers may find that they are unable to make further progress, sometimes even after just 1 or 2 miles, which has a detrimental effect on encouraging walking at the coast.
On completion, this coastal path will join the 2,500-mile network of national trails, which are long-distance walking routes that are maintained by trail partnerships to a higher standard than ordinary rights of way, to reflect their status and the popularity of walking in our nation’s finest countryside. On some of the routes, access for horse riders and cyclists is also provided.
There are benefits to bringing the England Coast Path to fruition. My hon. Friend was right to point out that that is behind schedule; I will address that point further in my speech. In essence, access to the natural environment is known to improve our mental and physical health. Access to the coast brings a more diverse range of people together to enjoy that natural heritage than many other accessible parts of our countryside. Studies have demonstrated that improving coastal access also brings with it economic benefits for coastal communities.
Will the Minister accept that the landowners have the right to be protected from the mental stress that has been caused to them in seeing their hard-earned income being stolen from them by what they see as state intervention?
Because this is the first time that I have heard the specifics of the issues relating to land in my hon. Friend’s constituency, I do not feel qualified to provide an individual comment on a particular issue.
But the principle?
But the principle is clear, and Parliament legislated for this coastal path to come into force and Natural England is under a duty to bring that forward. As I have said, the guidance is clear: engaging with stakeholders and landowners is a cornerstone of that approach. Nevertheless, Natural England has a duty under the law to take forward the coastal path.
Consultation and dialogue are supposed to form the cornerstone of the approach. I am conscious that landowners in my hon. Friend’s constituency feel ignored. The process that Natural England must follow when identifying proposed alignments for the path is described in detail in the coastal access scheme, which is the approved statutory methodology for delivering the path.
Understanding the strategic issues present on an individual stretch and working towards solutions to any concerns should be achieved through extensive dialogue with the landowners and occupiers, as well as the local authorities and other local interests. Natural England will also maintain frequent contact with the national stakeholder organisations as it develops its thinking on suitable alignments for each stretch of the path.
I am keenly aware that we have to continue to do as much as we can to ensure that there is meaningful engagement with landowners on the more complex stretches of the path, which are currently in development. Therefore, I expect Natural England to work carefully to identify all the legal interests on any stretch, and ensure that its emerging proposals are communicated to those interested parties early and in an easily understandable way. I also expect Natural England to ensure that adequate time is given to negotiating alignments on those stretches that include particularly complex features.
The 2009 Act requires a fair balance between the public interest in having new access rights over land and the interests of those whose land might be affected by that proposed new access. In preparing its proposals, Natural England should consider all relevant factors along a section of a stretch, and gauge the need for intervention in relation to any particular concerns raised by landowners and occupiers. Where intervention is considered necessary, the principle of the least restrictive option will be applied to the scope of the intervention.
Once Natural England has published its proposals for a stretch in a coastal access report, there will be an eight-week period for owners, occupiers and others to object and make representations about Natural England’s proposals. Any such objections will be independently considered by an inspector from the Planning Inspectorate, who will then make a report, which is presented to the Secretary of State, with recommendations on whether Natural England’s proposals have struck a fair balance.
The final decision on the approval of Natural England’s proposals will be taken by the Secretary of State, who must have regard to the recommendations in the inspector’s report. With that in mind, my hon. Friend will understand why I cannot comment specifically on the local issues that he has raised, given that it is subject to that quasi-judicial process.
In my constituency, I share the challenge of coastal erosion faced by my hon. Friend. We have met before to discuss the particular challenges that he faces. Provisions in the 2009 Act mean that the route can change in response to those challenges—a process known as roll back. When applying roll back to a stretch, Natural England will consult with landowners to ensure a fair balance.
My hon. Friend mentioned a particular part of the northern coast of the Isle of Sheppey. In my consistency there is a similar area with estuaries. I am conscious of the impact of walkers not following the path and getting too close to the cliff, which entails risks, as he highlighted regarding his own constituency, as well as the impact that walkers can have on flood defences and walls, which may become the paths. Therefore, I have taken up this matter as a constituency MP as well as an Environment Minister, to ensure that Natural England considers these matters carefully when looking at both estuaries and areas subject to coastal erosion.
If my hon. Friend believes that Natural England is not considering those issues proactively in the designation of the path, I would be interested to see the details regarding that, to which I would expect Lord Gardiner to respond.
As a constituency MP, I have raised the issue with the Minister. I have to say, her response was very disappointing. At that time I was raising the issue of cliff erosion. This path will go on the edge of the cliff. As I pointed out in my speech, the erosion could be resolved by shoring up the cliffs, but Natural England’s position, supported by the Minister, was that it wants to see the cliffs erode into the sea.
Each year the path will have to be moved further back due to erosion, and eventually it will run through the gardens of some of my constituents. That is lunacy. Is it not better to use the alternative path? The options have been provided to Natural England, but it is ignoring them.
I do not know the detail of the alternative path. I do not know how close it is the coast. Again, I will not comment on specific schemes, because ultimately I am not the decision maker when it comes to that. I will share my hon. Friend’s comments with Lord Gardiner.
One reason for the delay in this process is that a European Court of Justice judgment was handed down in April 2018, known colloquially as “People over wind”. It affects the way Natural England manages the impact of its proposals on sites with nature conservation designations, as my hon. Friend mentioned. That has affected the pace of the path’s delivery, and Natural England has had to consider it carefully. It intends to continue to work towards opening as much of the path as possible by 2020.
I am sure that Lord Gardiner would be interested to understand more about my hon. Friend’s proposals for treating people with holiday accommodation in the same way as the holiday park. I will ensure that that is brought to Lord Gardiner’s attention. I would be surprised if Natural England was not taking the erosion into account, because it has done so in my constituency. If there is a lack of consistency in different parts of the country, Natural England should consider that urgently, especially regarding the proposals in my hon. Friend’s constituency.
Does the Minister accept that there is a lack of consistency in the approach to estuaries? Will she explain why the Government have objected to my Coastal Path (Definition) Bill, which would have required this path to go along the coast, rather than into estuary areas? It would be a straightforward change of policy imposed upon Natural England, because it is not prepared to apply common sense itself.
I understand that my hon. Friend is keen to avoid the coastal path deviating from the line of the coast, whether through an estuary or not. It is appropriate to consider that again. Like most MPs, I think of an example from my constituency, where there is a huge detour along the path through an estuary, but in essence it is still a path; otherwise, one would need a boat to cross the estuary in order to continue the walking experience.
It is appropriate for Natural England to consider estuaries but, as with similar issues, they need to be considered on a local basis. It may be appropriate to consider other ways of getting the walker from one side of the coast to the other, depending on the nature of the estuary involved. However, it will vary by area. That is why I do not believe we can take a general, principled approach. Sometimes a detailed design is there to account for the local conditions, which will not be the same on the Isle of Sheppey or in Christchurch as they are in Suffolk Coastal or other parts of the country. Ruling out certain areas is not the right way to proceed on a national basis.
The Government are committed to ensuring that the England coast path happens, but I am conscious of the issues that my hon. Friend the Member for Sittingbourne and Sheppey has raised. I have tried to use my constituency experience to inform Natural England, as it progresses the issues of the coastal path, particularly when it comes to erosion and estuaries. I will continue to do that.
I will encourage Lord Gardiner to look carefully at these issues. I expect that it will still not be possible for any letter that my hon. Friend receives to give detailed responses on the courses of action, given that Ministers have to wait for the Planning Inspectorate report, so that the Secretary of State can make a decision on that particular stretch of the coastal path.
I appreciate that some of my comments will not satisfy my hon. Friends. However, my hon. Friend the Member for Sittingbourne and Sheppey was right to bring this matter to the House’s attention. It will receive further detailed consideration.
Question put and agreed to.
Facial Recognition and the Biometrics Strategy
[Sir Roger Gale in the Chair]
I beg to move,
That this House has considered facial recognition and the biometrics strategy.
It is a pleasure to serve under your chairmanship, Sir Roger. First, I must declare my interests, which are not directly in the subject but in the privacy and data protection space in which I practise as a lawyer, as set out in the Register of Members’ Financial Interests. I chair various technology all-party parliamentary groups and Labour Digital. I am also a member of the Science and Technology Committee, which has an ongoing inquiry into the subject. We have taken evidence from Professor Paul Wiles, the Biometrics Commissioner, and Baroness Williams of Trafford, the Minister in the other place. Some hon. Members have sent their apologies, which I entirely understand, because we are competing with the climate change debate in the main Chamber.
Why did the subject first come to my attention? As a consumer, I have become increasingly used to using facial recognition technology, whether I have proactively agreed to it or not. I often forget my passwords these days, because I use my face to pay for things and open my iPad and phone, although as I was saying to my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), that can prove tricky when I am trying to pay for things at a distance. For many of us, facial recognition technology provides consumer services on Facebook and Google by auto-tagging friends and family members and allowing us to search our images. There is an entire debate to be had about consent, transparency and privacy in the use of such technologies in the private sector, but my focus today is on the role of the state, the police and the security services in the use of facial recognition technology.
Facial recognition technology is beginning to be used more widely. It is well known to those who take an interest in it that the South Wales police has used it at sporting events; that the Metropolitan police has trialled auto-facial recognition technology on many occasions, including at events such as the Notting Hill carnival and Remembrance Sunday, and at transport hubs such as Stratford; and that Leicestershire police has used it at the Download music festival. I am concerned that it is also being used at public protests, although perhaps I understand why; I will come on to that later in relation to our freedom of association.
I congratulate my hon. Friend on securing this debate on a key subject. He has spoken light-heartedly about the competition with the climate change debate. Does he agree that in some ways, as with climate change, although only a small number of issues are currently associated with this topic, the range of impacts that facial recognition technology will have on our society and economy, on the way we work and do business, and on our trust relationships will be huge and will grow over time?
I agree wholeheartedly with my hon. Friend. She and I often end up in these types of debates in this place. One thing that they have in common is that the technology is changing and the services are becoming more mature at such a pace that the regulation and concerns are often slower. As legislators, we need to understand the technology as well as we can and make sure that the appropriate protections are in place.
In other spaces, we talk about the fact that I have a date of birth, I am male, I have two daughters and I am a vegan, which means that companies profile me and suggest that I might like to buy Quorn sausages that children like. There is a public debate about that, of course, but facial recognition technology is a particularly sensitive area of personal data. Such technology can be used without individuals really knowing it is happening, as I will come on to shortly, which is a big issue. It is not just police forces that are interested in the technology; some councils are using it to enforce certain rules, as is the private sector, as I say.
Facial recognition technology uses two methods: live auto-facial recognition, which is referred to as AFR Locate, and non-live auto-facial recognition, which is referred to as AFR Identify. What does Locate do? When such technologies are being trialled—although some police forces have been trialling such technologies for many years, so the definition of trial is important—cameras will build a biometric map of the face and facial features of members of the public who are walking down the high street, through a shopping centre or at a sporting or music event. That builds a numerical code that identifies them as individuals, which is matched against a database of images to identify them using the technology. That spurs an action by the police force or others, should they feel that that individual is high risk or has broken the law and some enforcement needs to be taken against them.
As I have alluded to, unlike fingerprints, which people have to proactively give, the technology is so pervasive that many people will walk past the cameras not really knowing that they are taking part in the process and, therefore, not consenting to it. As I will come on to shortly, the rules in place for the use of facial recognition technology are non-existent.
On non-live AFR, the so-called Identify scheme, I will focus on the databases that are being used. After we have built the facial image—the map or code of a person’s face—we match it against a database of images. What is that database and where do those images come from? The police have watch lists of people they are concerned about. Obviously, we want terror suspects to be on a watch list so that the police can do their job properly. There has been a question about scraping social media for images that police forces can match against. Can the Minister confirm that today? If we are doing that in an untargeted fashion for those about whom there are legitimate concerns, we ought not to be. There are also custody images on databases such as the police national database, about which there are long-running concerns, as we have heard on my Select Committee. When the police take someone’s picture and put it on to the PND, it stays there. It does not matter whether they are convicted and go on to a list of people with convictions—perhaps we would understand if that were the case—or they are found innocent or no action is taken against them; their images are kept on the database anyway.
We have known for many years that the way the police have been processing the facial images of innocent citizens is unlawful. In the High Court in 2012, in the case of RMC and FJ v. Commissioner of Police of the Metropolis, the High Court was clear that it was being managed unlawfully. The Home Office responded, albeit some years later—I am not entirely sure why it took so long to respond to such an important issue—setting out a six-year review period in which the police would have to review the images on the database to decide whether they should weed and take out the images of innocent citizens. It also said that any of us could proactively ask the police force to remove our images because we claim our innocence.
There are several problems with that. Unsurprisingly, the number of requests to remove facial images from the database has been low, because people do not know about it. The fact that people have to proactively prove their innocence to not be on a police database is also fundamentally an issue. It is well known, however: the minutes from the September meeting of the Law Enforcement Facial Images and New Biometrics Oversight and Advisory Board say that
“most forces were struggling to comply”
with the Government’s response to the High Court’s ruling of unlawfulness. In answer to my questions in the Select Committee hearing, the Minister in the other place and her officials confirmed that no additional resource had been given to police forces to respond to or promote the fact that people can request the removal of their images from the database, or to undertake the review in which they are supposed to weed out and delete the images that they are not keeping on the database.
Evidently, the system is not fit for purpose. In my view, we continue to act in a way that the High Court said was unlawful, and I know that the Information Commissioner has also expressed concern. It will be useful if the Minister sets out how the Government will act to improve the situation, not only in terms of resourcing and support for police forces across the country but in terms of honouring the Government’s commitment to build new databases, so that the process can be automatic. Technology is pretty advanced now in some of these areas of facial recognition. If Facebook is able to identify me, tag me and take an action, and if Google is able to identify me and allow me to search for myself online, surely the Government ought to be able to auto-scan images, identify people who are not criminals and automatically delete the images of them. That ought to be deliverable. Indeed, it was our understanding that such a system was being delivered, but only a few weeks ago, when I asked Baroness Williams, the Minister in the House of Lords with responsibility for this issue, when we could expect the new computer system to be delivered, there was stony silence from the Minister and her officials. They were not clear when it was going to be delivered, why it had been indefinitely delayed and whether the delay was due to financing, contractual issues or technology issues. There was no clarity about how the existing system would be fixed.
We found in 2012 that the system was unlawful in relation to civil liberties. That in 2019 going into 2020, we do not know what we are doing to fix it or how it will be fixed, it is wholly unsatisfactory. Will the Minister give us a clearer update today about when the automatic deletion service will be available to police forces?
I thank my hon. Friend for giving way to me again. He has made some very important points about the way in which this technology is already being used by Facebook and others, but is it not the case that, however advanced the technology is, it has also been found that it can be biased because of the training data that has been used, which means that particularly those from minorities or specific groups are not recognised adequately? Does he agree that it is all the more important that there is investment as well as transparency in the police database, so that we can ensure that groups who are already marginalised in many ways, particularly with regard to police services, are not once again being discriminated against?
Unsurprisingly, I agree entirely. This is part of a much broader conversation about designing technology with ethics at the very start, not only in facial recognition but in algorithmic decision making and a host of different areas where we have seen that human biases have been hardwired into automated decision processes that are delivered through technological solutions.
The Government have a really important role to play here, not just in setting the regulatory framework and building on, and really giving strength and resource to, the Centre for Data Ethics and Innovation to set the national and international tone, but through their procurement of services. They must say, “We have got to get this technology right. We are going to buy these systems, but we really must see this ethics by design right from the very beginning, dealing with biases in a way that allows us to avoid biased solutions.” That would stimulate the market to ensure that it delivered on that basis.
On the legal basis for biometrics, older forms of biometrics such as DNA and fingerprints have a legal framework around them; they have guidance and rules about how they can be used, stored and processed. There is no specific law relating to facial recognition and no specific policy from the Home Office on it. The police forces that are trialling these systems say that they are using existing legislation to give them the legal basis on which to perform those trials, but the fact of the matter is that we only need to look at the dates of that legislation to see that those laws were put in place way before the technology came into existence or before it reached the maturity that we are seeing today.
There was some debate during the passage of the Data Protection Act 2018, when I, my hon. Friend the Member for Sheffield, Heeley and others served on the Committee scrutinising that Bill, but there was no specific discussion during that process or any specific regulation arising from it about facial recognition technology. If police are relying on the Police and Criminal Evidence Act 1984—perhaps there is an irony in the date of that legislation—the basis and the understanding of the technology did not exist at that time, so it is not in that legislation. Even the Protection of Freedoms Act 2012 is too old. The definition of biometrics in that legislation cannot encapsulate a proper understanding of the use, sensitivity and application of automatic facial recognition.
I am not alone in saying this—indeed, it seems to be the view of everybody but the Government. The Information Commissioner has opened investigations; the independent biometrics and forensics ethics group for facial recognition, which advises the Home Office, agrees with me; the London Policing Ethics Panel agrees with me; the independent Biometrics Commissioner agrees with me; and, perhaps unsurprisingly, civil liberties groups such as Liberty and Big Brother Watch not only agree with me but are involved in legal action against various police forces to challenge the legal basis on which these biometrics trials are being conducted. When he response, will the Minister say that the Government now agree with everybody else, or that they continue to disagree with everybody else and think that this situation is okay?
I will now address the second part of this debate, which is the biometrics strategy. I focused on facial recognition because it is a particularly timely and sensitive component of a broader biometrics strategy. All of us who use technology in our daily lives know that biometric markers and data can be used to identify our location, identity and communications. That means that the Government and, indeed, the private sector can access data and learn things about us, and that area of technology is growing. People are rightly concerned about ensuring that the right checks and balances are in place. It is one thing for an individual to agree to facial recognition technology in order to unlock their tablet or phone, having read, I hope, about what happens to their data. It is another thing, however, for them not to be given the opportunity to give their consent, or not to receive a service and therefore not know about it, when the state is using the same types of technology.
The biometrics strategy needs to get into the detail. It needs to set out not only what is happening now but what is envisaged will happen in the future and what the Government plan to do about it, in order to protect civil liberties and inform citizens about how the data is being used. Clearly, they would not be informed individually—there is no point in telling a terrorist planning an incident that there will be a camera—but the right balance can be achieved.
Again, I do not understand why the Government are so slow in responding to these fundamental issues. It is so long since the 2012 High Court ruling on the retention of custody images, and we had to wait five years for the biometrics strategy. Imagine how much the biometrics sector in this country changed during those five years. Perhaps the Government were trying to keep up with the pace of change in the technology space, but the strategy was long delayed and long awaited.
Given my tone, Sir Roger, you will not be surprised to hear that everyone was very disappointed with the biometrics strategy, because it merely gave a kind of literature review of current uses of biometric data. There was a little bit about the plans for a new platform, which the Home Office is building, regarding how different people access biometric data. It said nothing at all, however, about the future use, collection and storage of biometric data, or about data protection. It said nothing about the Government’s own use and collection of data; the need for enforceable guidelines to enable devolved decision making by, for instance, police forces across the country; how different Departments might be able to use different forms of biometric data across Government, which, evidently, is very easy to deliver with today’s technology; or how the data would be stored securely.
People are concerned about cyber-security and breaches of their personal data, so what steps will the Government take in this developing space? Where will the data be stored? In advance of this debate, I received representations arguing that we should not send it to companies overseas and that it should be stored in the UK. One would think that the biometrics strategy addressed those issues, but it does not. Is the beta version of the biometrics strategy due soon, or does the Minister think that the Government have provided a sufficient response on this important field?
I do not want to keep saying that everybody agrees with me, because that would be a little uncomfortable, but there is no denying that the Biometrics Commissioner, the Surveillance Camera Commissioner and the Information Commissioner’s Office have all said exactly the same thing—this biometrics strategy is not fit for purpose and needs to be done again. The Government need to be clearer and more transparent about their endeavours and make that clear to the public, not least because these areas of technology move at pace. I understand entirely why police forces, civil servants or others want to be able to take the opportunities to deliver their services more efficiently, more effectively and with more impact—we support that—but the right checks and balances must be in place.
I will touch on our fundamental rights and freedoms, because that debate does not get enough air time in the technology space. Our freedoms are increasingly being challenged, whether the issue is cyber-defence or how we regulate the online world, and also in this space. Fundamental freedoms—freedoms that we hold, or purport to hold, dear—are encapsulated in the European convention on human rights and the Human Rights Act 1998. They go to the very nature of this technology, such as the right to a private life that can only be interfered with for a legitimate aim and only if that interference is done proportionately. Scanning a load of people going about their day-to-day life does not feel proportionate to me, and there is no accountability to make sure that it is being done legitimately. As my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said, if the selections that those technologies pick up are resulting in false matches or are discriminating, primarily against women and people from ethnic minority backgrounds, that also ought to be considered.
Those freedoms also include freedom of expression and of association. In public protests in recent weeks, people who dearly hold certain views have gone too far by moving away from their right to freedom of expression and to peaceful demonstration, towards criminal activity, intimidation or hostility. We should set the tone and say that that is not welcome or acceptable in our country, because having a right also means having a responsibility to use it wisely. Of course we want to protect those who want to demonstrate through peaceful public protests.
I am sure the public will say—this lies at the heart of my contribution—“Fine. Use some of this technology to keep us safe, but what is the right balance? Do we understand how it is being used? What are the accountability measures? What rules and guidance are being put down by the Government, on behalf of Parliament and the people, to make sure this is being done in a way that is not a slippery slope towards something we ought not to be doing?” We need a wider debate in public life about how we protect freedoms in this new digital age, and this issue is an example of that.
The House of Commons digital engagement programme is often a very good process for Westminster Hall debates, as it allows the public to be part of the conversation and to submit their comments. It would be remiss of me to not point out that some members of the public highlighted a certain irony in the fact that this debate was being promoted on Facebook, so I have shared their concerns, but that is still a medium through which the public like to engage in debate. Hundreds of thousands of people engaged across different platforms—way more than I was expecting—which shows the level of public interest in the use of these technologies.
As might be expected, there were two sides to the argument. The minority view on the platforms was, “I have nothing to hide. Please go out and keep us safe. Crack on, use it.” The other side said, “Actually, this is a slippery slope. I don’t know how this is used, and I’m worried about it. Why can’t I go about my day-to-day life without the police or the state surveilling me?”
I will share some of the comments. On the first side of the argument was Roy. I do not know where he is from. I wish his location had been given, because I could have said, “Roy from Sheffield”. He said:
“No objection. I’ve nothing to hide and don’t find it scary or objectionable for ‘the state’ to be able to track my movements. They already can if I’m in a car”—
I did not know that—
“and that doesn’t seem to be a problem. The added security of the police being able to track potential terrorists far outweighs any quibbles about reduced privacy.”
That is a perfectly legitimate view.
“Having seen the numbers of crimes solved and even prevented by CCTV I have no objections. Today we have to be realistic, with phones listening in on conversations for marketing and plotting where we are, this is small price to pay for public safety and if you have done nothing there is nothing to fear.”
That is an interesting contribution on what is happening in the private and state sectors. We need to be much more advanced in both spheres.
That was a minority view, however. I do not have the percentage, but the bulk of comments came from people who are concerned. Chris Wylie, who many of us will have read about—he was the Cambridge Analytica whistle- blower, so he clearly knows something about these issues —was firm:
“No. Normalising this kind of indiscriminate surveillance undermines the presumption of innocence.”
We should pause on that, because it is really important. Why should we be tracked and surveilled by the police on the assumption that we might be guilty of something? That does not feel right, just as it does not feel right that people have to prove their innocence to get their images taken off a police database. Chris went on to say:
“It should never be up to us as citizens to prove we are not criminals. Police should only interfere with our lives where they have a reasonable suspicion and just cause to do so.”
I share Chris’s views.
Andrea said that this was a slippery slope:
“The idea that some people have about privacy as an exclusive issue for the bad guys is completely wrong. Not only privacy prevents my acts from limiting my rights but also avoids an unjustified use of power by the Gov’t.”
Again, we should pause there. It is our job in Parliament to hold the Government to account, yet we have no strategy, legislation or rules to enable us to do so. That is a fundamental problem. She goes on to say:
“Such a huge involvement of disturbing tech could lead to a 1984-like slippery slope, one which none of us wants to fall in, regardless of their legal background.”
“I believe that this would suppress people’s ability to engage in public demonstrations and activities that challenge the government, which is hugely dangerous to democracy.”
A lot of people said that if they thought the state was scanning their data and putting it on a database, they might not associate with or take part in public demonstrations. If that were to happen, it would represent a significant diminution of our democratic processes.
Lastly, Bob said:
“It makes it easier for a future, less liberal government to monitor the activity of dissident citizens. During the miners strike in the 1980s miners were stopped from travelling just on the suspicion they would attend rallies based on their home locations and where they were heading. How would this technology be applied in the future for, say, an extinction rebellion march?”
Regardless of our political disagreements across the House, none of us thinks that the state is overreaching in a way that many other countries would. However, given the lack of legislation, guidance and regulation to enable us to hold the Government to account, and with independent commissioners and regulators saying that this is not good enough, I agree with Bob. There is a huge risk in not putting in place a framework with the appropriate checks, balances and protections, not just because that is the right and important thing to do today, but because we need that framework for future Governments.
My hon. Friend is being very generous with his time, and I congratulate him again on having raised this important topic. Does he agree, as I think he is suggesting, that the level of interest in this debate—demonstrated by the quotes he has read out—shows that technology such as facial recognition, as well as algorithms and data, needs to be publicly debated? We can make a choice as to how it is used, so that citizens are empowered. Technology should not be something that is done to people; they should have rights and controls as to how it is enacted.
My hon. Friend is absolutely right. The debate is a broader one about technology. How do we engage the public with these issues? I am an evangelist for technological reform, although I will not go on about that topic for too long, because it is not linked to the title of the debate. In my view, the idea that we can increase our economy’s productivity, increase wages, transform people’s working lives and reform and make more efficient our public services without using technology does not make sense. As my hon. Friend says, however, we have to do that in the right way and bring the public with us.
On a cross-party basis, we share the belief that we need to take crime seriously, and to address the increasingly sophisticated methods that criminals and terrorists may employ when trying to commit crimes or terror in our country. However, we must get the balance right, and there is a lacuna of regulation in this space. There are no legal bases, there is no oversight, and as a consequence there are no protections. That is why the Government should act now.
I congratulate the hon. Member for Bristol North West (Darren Jones) on presenting the case very well. We spoke before the debate started and found we were on the same page. I am pleased to see the Minister in his place. Our comments are made with a genuine interest in arguing the case and hopefully to help the Government see the correct way of moving forward. I also want to thank the hon. Member for Bristol North West for the hard work that he and other members of the Science and Technology Committee undertake. It is painstaking work—very technical and detailed. If I was wearing a hat I would take my hat off to them for what they have done.
The issue of facial recognition is a complex matter. Of course, anyone who watches American crime dramas—I am one of those people who watches CSI and all the others from about 11 o’clock until 12 midnight before going to bed—will think it is a useful tool for identifying terrorist suspects, which can be right, but Hollywood life and real life are two very different things, and black and white is difficult to have when we consider people’s right to privacy and how far we can have a security site without a Big Brother state. I am always very conscious of that Big Brother state.
I thank the Library for the background information. I read in the paper this morning of a suspect in China who was wanted in relation to the murder of his mother. He had been missing for two to three years, but facial recognition was installed at the airport and they caught him. That is one of the good things that can happen—those who thought they would get away with a crime are made accountable.
I declare an interest as the chair of the all-party group for international freedom of religion or belief. As hon. Members know, I am very interested in such issues. China has apprehended a fugitive and is making him accountable for his crime, but at the same time China uses facial recognition to fence in villagers in the far west of China. That is a very clear illustration of how that technology can be used to the detriment of human rights and religious minorities in a country that, let us be honest, is guilty of many human rights abuses. I am very concerned at how China can use facial recognition to its advantage to suppress human rights and to suppress people’s right to practise their religion in the way that they would like.
On accuracy and bias, some of the information illustrates clearly that errors for low-resolution surveillance footage can exceed 10%, so there is still a question mark over the validity of the process. If as many as 10% of people are found not to be the right person, I question the validity of the process.
We cannot deny or ignore the concerns of Elizabeth Denham, the Information Commissioner. She raised concerns about facial recognition technology and law enforcement in her blog:
“There is a lack of transparency about its use and there is a real risk that the public safety benefits derived from the use of FRT will not be gained if public trust is not addressed.”
I refer to the questions that the hon. Member for Bristol North West asked, and I suspect others will, in relation to the need for public trust that the system will not be abused or used detrimentally against people. People feel strongly about this matter. How does the use of FRT comply with the law? How effective and accurate is the technology? How do forces guard against bias? What protections are there for people that are of no interest to the police? How do the systems guard against false positives and their negative impact? That is clearly an issue.
My hon. Friend the Member for South Antrim (Paul Girvan) tabled a parliamentary question on 24 May 2018—
“To ask the Secretary of State for the Home Department if he will take steps to ensure that the facial recognition software that law enforcement bodies use is accurate.”
It clearly tells us that there are concerns across all four regions of the United Kingdom—England, Scotland, Northern Ireland and, obviously, Wales.
The background is clear. The courts ruled in the 2012 RMC case that it was unlawful to hold custody images without making a distinction between those who were convicted and those who were not. In response, the Home Office has introduced a system to allow unconvicted individuals to request the deletion of their images. We understand the system and that is all great, but it is an opt-out scenario; the individual must ask for the deletion of their image. I am not sure how many people would think of doing so; I suspect it would be the last thing on many people’s mind, with their busy lives. I know I probably would not think of doing so. I would not know that my images have been stored away for a rainy day to be pulled out, even though I am completely innocent. The presumption, “You may well do something someday” is not enough of a reason to hold on to these things. An arrest must be made for fingerprints to be taken and stored, and yet no arrest is needed for images of a person in the background of an event to be taken and perpetually stored by successive Governments—not just this Government, but every Government that comes after, if the legislation is in place.
The excuse of cost is a weighty consideration, and so is the protection of personal identification. I say this honestly: because of my age I have lived through the height of the troubles, when cars were searched, ID was a must and the battle against terrorists was daily. I lived with that, not just as an elected representative, but as a former member of the part-time army—the Territorials and the Ulster Defence Regiment. We seem to be heading that way again. I could understand it if the Government were to make it known that they believed that retaining this process would save lives—I would understand the thinking behind what they are trying to do—but that if necessary, there would be a mechanism to have the information removed. I could understand it if there was that level of transparency. However, to say that the reason is that there is not enough money to do an IT upgrade just does not wash with me, and I suspect it does not wash with others taking part in today’s debate.
I agree with the Science and Technology Committee report, “Biometrics strategy and forensic services”, published on 25 May 2018, which states:
“The Government must ensure that its planned IT upgrade…is delivered without delay…to introduce a fully automatic image deletion system for those who are not convicted. If there is any delay in introducing such a system, the Government should move to introduce a manually-processed comprehensive deletion system as a matter of urgency.”
That would be my request to the Minister. We have great respect for the Minister; that goes without saying, but we are very concerned about what is proposed, or could possibly happen, and we have to record those concerns.
I further agree that facial image recognition provides a powerful evolving technology, which could significantly help policing. I am all for that, but everyone must be clear about what is acceptable, what is not acceptable, what is held and for what purpose. That underlines my point that if it is for the sake of security, then say it and we can debate the merits of the case. If that is the purpose, let us debate it honestly, truthfully and in an informed way, to ensure that all concerns are taken on board.
I am all for targeting those on a watchlist or those affiliated with those on a watchlist, as in previous examples of terrorism on the mainland and back home as well, but let us be clear that it is happening, and let us be clear that those who take umbrage against it have the information that they need to ensure that their images are not stored even though they have not committed a crime and are not a person of interest. I am conscious of the need to protect human rights, protect privacy and protect those who are innocent, although I understand the reasons for the process.
In conclusion, I look to you, Minister, as I always do. We must have a chance to debate these issues and make an informed decision about the strategy and the justification for it. I look forward to the report’s coming before us, but I must record my concerns.
It is a pleasure to participate in this debate under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Bristol North West (Darren Jones) on securing it. My speech will be neither as lengthy nor as expert as his. My interest in this matter arises from the issue in my constituency last year when a report in the Manchester Evening News revealed that the intu Trafford Centre had been working with Greater Manchester police to use live facial recognition technology. I had not been made aware of that previously, and as far as I know, none of my constituents, or the other members of the public, knew of it either. Following the report in the Manchester Evening News, the intu Trafford Centre and Greater Manchester police suspended the pilot.
Like my colleagues, I suspect that many of our constituents would support the use of facial recognition and other technologies to prevent crime, keep us safe, catch criminals or trace missing and vulnerable people, which is something that I understand the British Transport police are considering. However, as we have heard, the use of the technology raises a number of issues, which my hon. Friend the Member for Bristol North West drew attention to. I have discussed some of them directly with local police in Greater Manchester, and at national level. I am grateful to the police officers who have spoken to me for their openness in those discussions. It is clear that the police themselves feel that there is a pressing need for the national framework that would make effective use of the technology possible. For now, they do not feel they have that.
From my perspective, and in the light of the experience in my constituency, I think that the framework will need to address decision making, who takes a decision to use such technology in a particular context, oversight and, importantly, accountability. How can such use be scrutinised and how can the police and other state authorities be made accountable to the public? I say that because what is happening could constitute a significant intrusion into the privacy of individual citizens whose record contains nothing criminal or threatening, and who are merely going about their daily business. It is important that the use of the technology in relation to the majority of citizens should be both appropriate and proportionate.
Issues that concern me include the size and content of any watchlist that might be constructed—particularly vis-à-vis the effectiveness of the size of the watchlist. In the Manchester Evening News report it was revealed that 30 million people per annum visit the intu Trafford Centre. It is an iconic destination in my constituency. However, over the sixth-month period during which the technology was being deployed, only one positive identification was made. That makes me question whether it was right to draw so many members of the public into the ambit of the experiment, for what seems to be a low level of effectiveness.
We also have to consider where the technology is being used. The police themselves said to me that some events or venues will be more suitable, and some less. Also we need to consider why it is used—at whose initiative or request such technology is deployed. In the Trafford Centre the intu management themselves had suggested it to Greater Manchester police. Is it right that police priorities should be set by the wishes of private enterprises? If that can be right, and in some circumstances there can be a partnership approach between the police and private entities, if the private entity draws a disproportionate benefit from the activity is it not right that it should pay for it? Football clubs pay for additional police protection at football matches.
We have heard concerns about potential ethnic bias in the databases and technologies that are currently available. I am told that what is on the market, as it were, at the moment is better at matching north European and south-east Asian males than other ethnic categories. That relates to the countries in which the algorithms that underpin the technology were developed, but from the public’s point of view we can say that if there is any ethnic disparity, or perception of it, in the way the technologies apply, it is bound to sow public mistrust. It cannot be right that we make use of technologies that do not treat all communities equally.
I have mentioned my concerns about where decisions are taken in police and other public agencies. It has been made clear by regulators that that should be at the most senior strategic level, and in my view it should be in the context of an absolutely transparent national framework. I also think we must think about mechanisms for accountability both to individual members of the public and the community that a police force serves overall.
Finally, while we are not going to halt the speed of spread of technology, and I think that we can expect more resources to go into such technology in the future, there is a question about how we prioritise resources vis-à-vis effectiveness and public buy-in. The static facial recognition technologies that have been used have excited much less contention and public concern. People can understand that the police hold a database of those with previous convictions and criminal records, and that they will check, where they have got someone whom they are not able to identify, against those records. I understand that that database is in need of new investment, which it is not currently scheduled to receive. I ask the Minister whether that might be the first priority for investment in facial recognition technologies; can the investment that is needed in the police national database be brought forward?
I am glad we have had the opportunity to debate the matter in Parliament today. I would be misleading the House if I suggested that it was causing widespread concern among my constituents, but in fact it should be. How the technology is being used, and the context in which we are made aware of its use, should concern us all. That is not to say it should not be used, but in the absence of a clear legislative or regulatory framework for its use, I do not think it would be right for the House not to ask those questions today.
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Bristol North West (Darren Jones) for obtaining the debate. I can testify to his expertise on such issues, having served with him on the Committee that scrutinised the Data Protection Act 2018. I claim no such expertise, so I am grateful to him for succinctly explaining the operation of facial recognition technology in particular. It has been a useful debate. It is a shame that we have clashed with the climate change debate because, as the hon. Member for Stretford and Urmston (Kate Green) said, even if the issue does not cause concern among many of our constituents at the moment, it ought to. There are some important questions that we have to debate and address.
The use of biometrics by police and law enforcement is of course not remotely new, but it is clearly evolving exponentially. It can and does make a huge contribution to detecting and preventing crime; it also has an important role in eliminating innocent individuals from inquiries, and it can help to trace missing and vulnerable people, but as all the hon. Members who spoke highlighted, it poses a range of serious ethical and human rights questions. It has the potential to be hugely invasive of privacy, largely because of the possibility that the systems will operate while requests for the consent of those caught up in them will be limited; there could be impacts on freedom of assembly and association, and the operation of the systems raises significant questions about data protection. In many forms of fast-developing technology, it is a challenge for the legal system to keep pace with changing use. Understandably, there has been particular concern about automatic facial recognition technology.
All the different legal systems in the United Kingdom and beyond face those challenges, and of course Scotland is no different. We kick-started our debate on the issues in 2016 with the report of Her Majesty’s inspectorate of constabulary in Scotland. It concluded that Police Scotland had been making
“proportionate and necessary use of Facial Search within PND”
and that it had been operating in accordance with its own policy, Home Office policy, and College of Policing guidance. However, it identified similar concerns to those that have been raised in the debate, and the need for improved legislation, a statutory code of conduct to govern Police Scotland’s use of biometric data, and better independent oversight.
The main legislation relating to biometrics in Scotland dates from 2010. The hon. Member for Bristol North West mentioned 2012 legislation being out of date already, and I absolutely accept that the 2010 measure is now too old. It predates the time when Police Scotland started to upload photos on to the police national database, in 2011. I understand that the facial search functionality of PND became generally available in March 2014. We do indeed have some catching up to do to make sure that issues to do with images and facial recognition technology are properly covered in legislation.
Following the inspectorate report, the Independent Advisory Group on the Use of Biometric Data in Scotland was established to produce more detailed proposals for plugging some of the gaps and setting up a more ethical and human rights-based framework. I thoroughly recommend the group’s report—it is a fascinating read. It draws on a range of expertise, not just from members of the group, but from the police, human rights and data protection groups, and experts such as the Biometrics Commissioner, the Forensic Science Regulator and the Biometrics and Forensics Ethics Group, which advises the Home Office. The report found that
“those involved in this field in Police Scotland...appear to work to very high standards of international repute, with a good grasp of the ethical and human rights implications of their work”.
It also made several recommendations about enhancing the legislative framework and oversight. Specifically, it recommended a Scottish biometrics commissioner and an ethics advisory group. It recommended a new legislative framework, accompanied by a code of practice, and made more detailed policy recommendations that I will come to shortly. I am pleased that those recommendations have been accepted by the Scottish Government. A public consultation has been held, and a biometric data Bill will soon be introduced to implement them. That is the right approach, and hopefully it will deliver the comprehensive framework that hon. Members have argued for today.
Let me turn to two of the most controversial aspects of the debate. In Scotland, 2010 legislation allows Police Scotland to retain fingerprints and DNA data from convicted individuals indefinitely. Data from individuals prosecuted for certain sexual and violent offences may be retained for three years, regardless of whether there is a conviction, and the chief constable can apply to the sheriff court for a two-year extension. More generally, data from individuals who have been arrested for an offence must be destroyed if they are not convicted or if they are granted an absolute discharge. Usual practice for photographs also follows that regime, which is slightly different from what happens in England and Wales, particularly with regard to the disposal of photographs of those who have not been charged or convicted.
Is that the perfect approach? I do not think we can answer that conclusively; we must be led by the evidence as it develops. It is perfectly legitimate to question whether a blanket policy of the indefinite retention of biometrics after every conviction is reasonable, because, as the advisory group pointed out, there is no abundance of evidence to suggest what degree of retention has proved the most useful. Biometric data is likely be more useful in identifying the perpetrators of some crimes compared with others, but the risk of offending and reoffending involves a range of factors, including many individual aspects. In an ideal world, the length of time we kept biometric data would be decided for each individual case, but that is not a practical approach, so we must consider the evidence gathered and do the best we can.
The use of automated facial recognition systems is hugely problematic, and our general approach must be evidence led. If such technology is to be used, it must be used only where necessary, and it must be done proportionately and on as targeted and limited a basis as possible. There are huge concerns about the impact of such technology on privacy and freedoms such as the freedom of assembly, and there is a danger of bias and discrimination. Studies have shown that such technology can disproportionally misidentify women and black and minority ethnic people, and as a consequence people from those groups are more likely to be wrongly stopped and questioned.
We must by now have sufficient evidence from forces in London and south Wales to show what automated recognition could look like in practice, what it is capable of achieving, and the price to be paid for that achievement. I will not say that I envisage no circumstances where the use of such technology could be justified—for example, it could be used to counter a specific and serious threat or danger—and I am probably somewhere between Roy and Chris in the range of views set out earlier. Nevertheless, I would be reluctant to see such technology rolled out in Scotland before the new regulatory and oversight regime is in force and before issues of bias and discrimination have been addressed. It seems sensible to stop the use of the technology elsewhere until its implications have been fully assessed and debated, sufficient checks are in place, and there is sufficient public support.
I will end with a quote from the advisory group:
“In this context, it is essential that sensitive personal data are collected only for specific, explicit, lawful and legitimate purposes. In seeking to achieve a careful balance between the needs of citizen and state, there is clearly a need for independent oversight, and for the development of a broad framework of consistent ethical and human rights respecting principles against which all biometric use for policing, law enforcement and public protection purposes in Scotland can ultimately be checked”.
The SNP supports an approach that involves a comprehensive legislative framework and a regularly updated code of conduct. We need strong oversight through a commissioner to ensure that the use of biometrics is proportionate, necessary and targeted, and respects human rights, privacy and data protection rules. I congratulate the hon. Member for Bristol North West on securing this debate. I hope there will be many more to come, with more MPs in attendance, as this important subject requires much more discussion.
It is a pleasure to serve under your chairmanship, Sir Roger. This excellent discussion has been informed by expert opinion, particularly from my hon. Friend the Member for Bristol North West (Darren Jones), whom I congratulate on securing this important debate. I think the public would be shocked to hear about the lack of legislative framework and guidance, and the potential for such intrusion into people’s lives by the state.
My hon. Friend spoke about the need for us all to understand the technology that could be used, and to ensure that the frameworks we set out are relevant and keep pace with legislation. That must be informed by a principles-based framework, because legislation will never keep up with the technology used by law enforcement or private operators. Several Members mentioned the police national database and the unlawful processing of custody images by police forces. That is not a good starting point for this debate, given that the Home Office’s response to that issue has been poor and the delays in the auto-deletion of images are worrying.
My hon. Friend mentioned the need for ethics by design to ensure that any biases, particularly against people from BME backgrounds, are built out of such technologies from the beginning and are not allowed to be replicated and harden. He described well the astonishing fact that there is no legal basis for these invasive, pervasive technologies and highlighted clear gaps in the biometric strategy in failing to address those issues. The hon. Member for Strangford (Jim Shannon) spoke powerfully about the consequences of false positives, and raised basic questions about the rights of innocent people. Those questions should be answered. We should not need to hold this debate to speak about the right of innocent people not to have their privacy undermined, and about the police unlawfully holding images of people who have committed no crime.
My hon. Friend the Member for Stretford and Urmston (Kate Green) spoke about her personal experience and the Trafford Centre in her constituency. She made the important point—I have had the same conversation—that the police want and need a transparent, national and consistent framework, because they feel that they have to make things up as they go along. Experiences will differ: South Wales police has demonstrated a completely different attitude to the Met in rolling out facial recognition, and it cannot be right for people to experience different technologies in completely different ways and with different attitudes, depending on the police force in the area where they live.
My hon. Friend is right to say that the police want a clear, national framework, and it cannot be right that different police forces operate in different ways. Greater Manchester police has stopped using that technology altogether, but there may be circumstances where we would like it to be deployed to keep us safe.
That is completely right, and that is why this debate and the framework are so important. We cannot allow the police, with all the best intentions, to attempt to use this technology and then in some cases to mess it up—as they will—and have to roll it back. We want to ensure that the framework is in place so that the police can go ahead with confidence and the public have confidence. We must ensure that biases are designed out and that people accept the intrusion into their privacy and understand that such technology is being used proportionately and out of necessity. At the moment we cannot have confidence in that, which is why this debate is so important.
I thank my hon. Friend for giving way, not least because I spoke at great length today. I did not mention earlier that we took evidence in the Select Committee from the Biometrics Commissioner that trials should be conducted on the basis of rigorous scientific guidelines and processes. The problem is that if we let different police forces do different things in different ways, we do not get clear answers on how and in what circumstances the technology can best be used. We need guidelines not just for the regulatory purposes, but so that the trials can be done in the right way.
That is absolutely right. I do not get a strong impression that individual police forces are learning from each other either. In the case of the Met, the word “trial” has been used for the technology’s use at Notting Hill carnival. It has been trialled for three years in a row. When does a trial become a permanent fixture? I do not think that that can now be called a trial. My hon. Friend is absolutely right that if it is a trial, we should be gathering data, and they should be informing Parliament and the public and should be addressing the concerns around false positives and ethnic biases and whether it is being used proportionately. My hon. Friend the Member for Stretford and Urmston gave the astonishing figure that demonstrated the mismatch between the numbers of people who were covered by the facial recognition technology when just one individual was identified. That surely cannot be proportionate.
The question of technology within law enforcement gets to the heart of public consent for policing in this day and age, and the issues we have discussed today represent only the tip of the iceberg of potential privacy issues. So much of what defines an investigation today is data-driven. Data-driven policing and data-led investigations are transforming policing. It is already completely unrecognisable from when I was a special constable only 10 years ago. The police have the scope to access more of the intimate details of our personal lives than ever before.
The trialling of technology—including facial recognition and, as my hon. Friend the Member for Bristol North West mentioned, risk assessment algorithms—has not been adequately considered by Parliament and does not sit easily within the current legal framework, but it is having some phenomenal results that we should not ignore. The identification of images of child sexual abuse rely on hashing technology, which enables law enforcement and the Internet Watch Foundation to scrape hundreds of thousands of images off the internet each year.
This week, we have had the news on what is in essence compulsion for rape victims to hand over their mobile phones for what potentially amounts to an open-ended trawl of data and messages, without which there is little prospect of conviction. That high-profile debate has lifted the lid on the ethical questions that ubiquity of data and technological advances are having on law enforcement. Nascent technologies such as facial recognition are at the sharp end of this debate. They do not just represent challenges around collecting and storing of data; they also provide recommendations to law enforcement agencies to act, to stop and search and, potentially, to detain and arrest people.
As my hon. Friend the Member for Bristol North West said, we served on the Data Protection Bill Committee, where we discussed these matters briefly. We outlined our concerns about facial recognition, in particular the lack of oversight and regulatory architecture and the lack of operational transparency. I reiterate the call I made to the Home Secretary in May last year that Her Majesty’s inspectorate of constabulary launch a thematic review of the operational use of the technology and report back to the Home Office and to Parliament.
We believe such a report should cover six key areas: first, the process police forces should and do follow to put facial recognition tools in place; secondly, the operational use of the technology at force level, taking into account specific considerations around how data is retained and stored, regulated, monitored and overseen in practice, how it is deleted, and its effectiveness in achieving operational objectives; thirdly, the proportionality of the technology’s use to the problems it is seeking to solve; fourthly, the level and rank required for sign-off; fifthly, the engagement with the public and an explanation of the technology’s use; and sixthly, the use of technology by authorities and operators other than the police.
It is critical as operational technology such as this is rolled out that the public are kept informed, that they understand how and why it is being used and that they have confidence that it is effective. The Minister has the power to commission reports of this type from HMIC and it would be best placed to conduct such a report into the use of police technology of some public concern.
We have discussed concerns about the accuracy of facial recognition tools, particularly in relation to recognising women and people from BME backgrounds—that is quite a swathe of the population! We do not know whether this is because of bias coded into the software by programmers, or because of under-representation of people from BME backgrounds and women in the training datasets. Either way, the technology that the police are currently using in this country has not been tested against such biases. In the debate around consent, it is extremely worrying that potentially inaccurate tools could be used in certain communities and damage the relationship with and the trust in the police still further.
As I said, we had some debates on this issue in the Data Protection Bill Committee, where we attempted to strengthen the legislation on privacy impact assessments. It should be clear, and I do not believe that it is, that police forces should be required to consult the Information Commissioner and conduct a full PIA before using any facial recognition tools.
I am further worried that the responsibility for oversight is far from clear. As we have heard, software has been trialled by the Met, the South Wales police force and other police forces across the country, particularly in policing large events. In September last year, the Minister made it clear in response to a written question that there is no legislation regulating the use of CCTV cameras with facial recognition. The Protection of Freedoms Act 2012 introduced the regulation of overt public space surveillance cameras, and as a result the surveillance camera code of practice was issued by the Secretary of State in 2013. However, there is no reference to facial recognition in the Act, even though it provides the statutory basis for public space surveillance cameras. The Surveillance Camera Commissioner has noted that “clarity regarding regulatory responsibility” for such facial recognition software is “an emerging issue”. We need clarity on whether it is the Biometric Commissioner, the Information Commissioner or the Surveillance Camera Commissioner who has ultimate responsibility for this use of technology. It would also be helpful if the Minister made absolutely clear what databases law enforcement agencies are matching faces against, what purposes the technology can and cannot be used for, what images are captured and stored, who can access those images and how long they are stored for.
The Government’s new biometric strategy takes a small step forward on oversight, with a board to evaluate the technology and review its findings, but it meets too infrequently—three times since last July, as far as I can tell—to have effective oversight of the operational use of the technology. In any case, it is clearly not designed to provide operational safeguards, and that is where big questions remain about discriminatory use and effectiveness. The lack of operational safeguards and parliamentary scrutiny may lead to ill-judged uses of the technology.
I am hopeful that the Minister can assure us today of the Government’s intention to make things a lot clearer in this space, that existing and emerging technologies will be covered by clear, consistent guidance and legislation from the Home Office, that the relevant commissioner will have all the powers they need to regulate these technologies, and that our law enforcement agencies fully understand what they need to do, both before any technology or new method of data collection is rolled out, and afterwards, when an individual’s data rights may have been abused. We need clear principles, and I am not convinced that the legislative landscape as it stands provides that.
It is a great pleasure to serve under your chairmanship, Sir Roger. It was a wrench to come out of the climate change debate in the Chamber, but the debate here has shown that what we are discussing is extremely important. Before I start, I recognise the presence of the Chair of the Science and Technology Committee, the right hon. Member for North Norfolk (Norman Lamb), who has joined us. I will of course take an intervention if he wishes to speak.
I congratulate the hon. Member for Bristol North West (Darren Jones) on securing the debate and on his excellent speech, which was rooted in genuine passion, deep expertise and a lawyer’s ability to present a case and fillet the evidence. It was really interesting. Of course, the context, which the hon. Gentleman was very good at laying out, is huge. We will talk about the police and the attitude of the security services, but ultimately this is a debate about how we protect our personal freedoms in the digital age, to use the hon. Gentleman’s language, and that is an enormous issue. Some hon. Members have already volunteered the opinion that the public are not yet fully engaged with the issue, and I support that from the experience of my constituency, but it is a huge issue.
The other context that we have alluded to and must not lose sight of is the backdrop of the extraordinary acceleration of the pace of change in what technology now enables for good and evil. Therefore, the debate about how far we go in supporting our police system and our security system—those who get up every morning thinking about how they can protect us—in using technology for the power of good is extremely important.
The hon. Gentleman mentioned a fundamental issue that underpins the debate. His primary charge against the Government, which was echoed by others, was that the regulatory framework, the legal framework, the oversight arrangements and the governance framework were not fit for purpose. He also said that a fundamental challenge for any Government of any colour is finding ways to keep pace with what is going on out there and make sure that the checks and balances and protections and regulations that are put in place are fit for purpose, against a landscape that is changing all the time.
I am grateful to the Minister for giving way and for indicating that he was willing to give way. He is making some really important points. When the Biometrics Commissioner gave evidence to our Committee, he gave a clear view that many in the police want a clear statutory framework that they can operate within. They do not want to be uncertain as to whether the next step they take will be subject to legal challenge. Surely it is in everyone’s interests to have a clear statutory framework and to do that now.
I understand that point. Although I technically do not lead on this area in the Home Office, in the context of another meeting with many of the chiefs directly involved, I have heard them talk a bit about it. They have not expressed that view directly to me, but that is not good enough. I will go back to them and get their direct view.
The hon. Member for Bristol North West spoke about his case and the legal framework for that. As that is about to be tested through a legal challenge in May, he will know there is a limit to what I can say. I am very up-front in saying that in reviewing the landscape, it is quite clear to me that some of the oversight and governance arrangements are not clear enough. A considerable amount of work is going on in the Home Office to try and improve that situation. That will become clearer over the summer, and I will talk on that.
The other context, if we come specifically to the work of the police—which is what we are basically talking about—is the use of biometrics and data to identify people, based on their personal characteristics. Those data are used by the private sector and the police and are very much part of our day-to-day life, as Members have said in relation to users of Facebook and Google and companies that basically make money out of their information about us. It is part of our day-to-day experience.
As the shadow Minister knows, biometrics have been an essential tool for the police for many years. If we consider that in one year alone, DNA linked more than 32,000 people to crimes, including 700 relating to murders and 700 to rapes, it sharpens the importance of this agenda for those trying to keep the peace and to protect us. For any Government of any colour who recognise that the security of the public will always be a priority, if not the priority, the question of our responsibility and how far we go to ensure that the police can continue to use biometrics and make use of the most up-to-date technologies will always be a priority.
Members have talked about the attitudes of the public, and I am sure they are right. The data I see, whether it comes from Lincolnshire’s police and crime commissioner or the Mayor’s Office for Policing And Crime, reinforces what Members have said. If members of the public are asked, “Should the police use these technologies to catch criminals?”, the answer tends to be yes, particularly in the context of the most serious crimes. We understand that, but that needs to be offset by a much more open and clear debate on the checks, balances and transparency around the use of these technologies. I absolutely understand that, but the pace of change and the opportunity are genuinely exciting for the police services. What is happening with new mobile fingerprint checkers, for example, is transformative in what they allow the police to do, including the pace with which they can work and the time that they can save by harnessing these technologies. Any Government would want to support their police system in making the best use of technology to protect the public and catch criminals, particularly those involved in the most difficult crimes.
Facial recognition is clearly a massively sensitive issue, and I welcome this debate. We have supported the principle of the pilots, and we can debate the degree to which the appropriate guidance and supervision have been in place for that. It is clear to the police and us that there are real opportunities to make use of facial matches. Generations of police officers have used photographs of people to identify suspects for a long time, and CCTV images have been a vital tool in investigation, but what is changing is our ability to match images with increasing confidence and speed. That is the major change in the technology. In a recent example, images taken by a member of the public in a Coventry nightclub where a murder took place were quickly matched on the police national database to a known individual who was arrested. They found the victim’s blood on his clothing and he is currently serving life imprisonment. We need to be clear about where the opportunity is in terms of matching suspect images on the national police database to wanted known individuals, ensuring that they cannot evade justice when they cross force boundaries.
It is understandable that the use of live facial recognition technology, which is the heart of the debate, raises extremely legitimate privacy concerns. Speaking not only as a Minister or a Member of Parliament but as a member of the public, I absolutely understand and share those concerns. A fundamental part of our democratic process is that those concerns are expressed here in the House or in the courts. The hon. Member for Bristol North West alluded to that. He wants us to go much further on transparency, accountability, governance and oversight, and I will try to set out the progress we hope to make on that, but the fact is that in many countries, these debates just would not take place. It is a strength of our system that we are sitting here in this debating chamber and the Minister is forced to come here and respond, that the Select Committee is able to do the work it does, and that the Government of the day show the Committee the respect it is due. That is our process, and it is not bad.
On the retention of images, the Government and successive Governments have been clear that DNA and fingerprints are not retained where someone is not prosecuted and is, in effect, an innocent person; yet with facial recognition, the facial images are retained. There is a mechanism for someone to apply to have their image deleted, but the indication is that people are not routinely told about that. What can possibly be the justification for having a very clear rule applying to DNA and fingerprints and a different rule applying to facial recognition? When are we going to get to the point where there can be automatic deletion of the images of innocent people?
I will come to that point, because I know it was a particular focus of the Committee, but first I want to conclude my remarks on facial recognition. The police have responsibilities and duties to prevent, detect and investigate crimes. The police have broad common law powers, as we are aware, that allow them to use relevant technologies, such as surveillance cameras in public places and live facial recognition, but it is clear that such use is not unfettered. The police have to exercise their powers in accordance with the law, including the Police and Criminal Evidence Act 1984, the Human Rights Act 1998 and data protection legislation.
As was alluded to, we also carry out data protection impact assessments before using a new biometric technology and before a new application of an existing technology. That includes inviting scrutiny from an independent ethics panel, regulators and commissioners. I was listening today to the chiefs of one of our largest police forces speaking exactly to that point, when he talked of the importance he attaches to the opinion of his local ethics panel. We will produce DPIAs for each element of the Home Office biometrics programme and the police will produce DPIAs for each use of live facial recognition.
When it comes to the use of surveillance cameras, the police are required to have regard to the surveillance camera code. To support them in using that technology, they can draw on the guidance of the Surveillance Camera Commissioner and the Information Commissioner. Recognising concerns around the use of the new biometrics, we have set up a new oversight board that includes the Biometrics Commissioner, the Information Commissioner and the Surveillance Camera Commissioner. It will oversee new pilots and is reviewing police operational guidance for live facial recognition. There is a recognition in the system of the issues raised by Members, and mechanisms are in place.
However, I have been clear that the current arrangements are complex for both users and the public. We are therefore keen to simplify and extend the governance and oversight arrangements for biometrics. As I have said, we will update Parliament in the summer on that work. There is a limit to what I can say at the moment, but I hope that Members can take comfort from the fact that we recognise that their concerns are valid, and that, as I said, there is an active stream of work to try to simplify and extend the governance and oversight arrangements for biometrics, against a background of rapid change in the landscape.
The policy on custody images was established in the 2017 review, and allows people who have been arrested but not convicted to ask the police to remove their custody images. There is a strong presumption in favour of removal. It is critical that people are aware of their rights, and debates such as today’s, as well as the work of non-governmental organisations, help to increase that awareness.
The policy is public and set out on gov.uk, and is covered in the management of police information and authorised professional practice guidance. However, we cannot rely on that, and we need to go further. The police will tell all those who go into custody about the policy through information that they hand out. We will also review the policy, and use a current police audit of requests to inform our conclusions. I undertake that the views of the House will also be taken into account.
The hon. Member for Bristol North West and the Chair of the Science and Technology Committee spoke about automatic deletion of data for people who are not convicted. The Committee Chair will be aware that Baroness Williams of Trafford, who leads on the issue in the Home Office, has written to the Committee to give a further explanation of, frankly, the complexity underlying the issue. There is no debate about where we want to get to: we want to move to a system that is automatic. Her letter to the Committee, which I will share with the shadow Minister out of courtesy, sets out some of the complexities in delivering the timeline for which Members are reasonably asking.
As I understand it, the fundamental issue is that, unlike the arrangements for DNA and fingerprints, there is no single national system for custody images, with a unique identifier for every record. Many records have the appropriate identifier, enabling them to be linked to arrest records. However, there are several million on the police national database that cannot be linked easily, or at all. They would have to be manually reviewed or deleted in bulk, entailing many thousands of hours of work.
There is therefore an issue surrounding the different ways in which police databases work, and a fragmented landscape of local police force systems and different practices. It is genuinely complicated work. There is no quick fix, but I am satisfied that there is a determination to get to the end objective that we all want. In the meantime, we will work with the police to improve their procedures to better comply with the agreed policies. I will press the system harder on that, because obviously the current system is not satisfactory, or acceptable to me.
I will leave a few minutes for the hon. Member for Bristol North West to wind up, but I stress that biometrics, as the shadow Minister knows, play a fundamental role in many aspects of modern life and a vital role in the work of police, and have done for an extremely long time. We have a duty, as a Government and a Parliament, to support the protectors of the peace by ensuring that they can make use of new technologies in the most appropriate way. However, we must do our duty by the public we serve by ensuring that there are the right checks and balances in the process.
Ultimately, the public we serve and protect have to trust the process and continue to trust the police. We know the importance of trust in the modern age. Strikingly, the public we serve and represent continue to have high levels of trust in the police, whereas it has plummeted for many other traditional institutions. Trust in the police remains high, and it is important to me, and to anyone who will do my role in the future, that we maintain it. The inappropriate use of technology, or a lack of trust concerning how technologies are used in the future, is therefore a core challenge that the Home Office, under any colour of Administration, needs to take extremely seriously.
As the Home Secretary has said, we are not a surveillance state and have no intention of becoming one. That means that we must use new technologies in ways that are sensitive to their impact on privacy, and ensure that their use is proportionate and maintains the public trust that is at the heart of our policing model.
I thank the hon. Member for Strangford (Jim Shannon), my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Newcastle upon Tyne Central (Chi Onwurah), and the shadow Minister, my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), for their contributions. I also welcome the interventions of the Chair of the Science and Technology Committee, the right hon. Member for North Norfolk (Norman Lamb), and the Minister’s responses.
It is clear from today’s debate that everyone, including the Minister and, by extension, the Home Office, agrees that we have some work to do, which is a good conclusion. I put it on record that the Select Committee is interested in the actions being taken by the Scottish Government in the biometric data Bill that the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) mentioned. We will keep a close eye on the work being done in Scotland, and think about what lessons we might learn in Westminster.
As my hon. Friend the Member for Stretford and Urmston said, if we have 29 million facial scans for one hit, we clearly need to have a better debate about the balance between impact and invasion of privacy. As many colleagues mentioned, the demand for a stronger regulatory system comes from not just police forces, commissioners, politicians and the public, but from the technology companies providing such solutions. They wrote to me in advance of the debate to say that they want to do the right thing, and would rather that there were a framework in which they can operate so that—no doubt for their own brand purposes—they are not pushing the envelope by delivering solutions that police forces and others may take too far.
I welcome the Minister’s commitment to privacy impact assessments. I am sure that we all welcome that confirmation. I understand that dealing with legacy IT systems is difficult; we have been talking about that on the Select Committee too. We encourage the Government not to put a sticking-plaster over old systems, but to invest in new ones, so that we are not just dealing with a legacy problem, but building something fit for the future. I look forward to reading the letter that the Minister referred to from Baroness Williams of Trafford.
The Minister said that it was good that in our system we can hold the Government to account and show our interest in such matters. It is clear from the debate, and from the Select Committee’s ongoing work, that we will continue to do so. We therefore look forward with anticipation to the further announcements that the Minister has committed to in the season of “summer”. Even though we do not quite know when that will start or end, we look forward to those announcements, and I thank him for his contribution.
Question put and agreed to.
That this House has considered facial recognition and the biometrics strategy.
Jain Community: Contribution to the UK
[Andrew Rosindell in the Chair]
I beg to move,
That this House has considered the contribution of the Jain community to the UK.
I have the privilege of chairing the all-party parliamentary group on Jainism, and of having a large Jain community in my constituency. Jainism is a major and ancient religion of Indian origin that is recognised in the UK and globally, including by the United Nations, yet the cultural, economic, social and religious contribution that Jains make to our country has received little or no attention from public policy makers. That needs to change.
The largest proportion of people of the Jain faith live in India. There are estimated to be some 7 million Jains worldwide, but global census figures are likely to be a significant underestimation because many Jains are identified as Hindu—of which more anon. There is also confusion about the true number of Jains in the UK, but the UK is certainly a significant centre for Jainism, and studies indicate that it has almost 65,000 Jains—a figure far in excess of the 20,000 identified in the 2011 census, about which I will also say a little more later.
One key figure in the UK’s Jain community told me:
“We have always sought to integrate into the fabric of British society and wholeheartedly accept British values whilst retaining our distinct identity, religion and heritage.”
The UK has five major Jain religious sites: Hayes, Kenton, Leicester, Manchester and, of course, Potters Bar. The Potters Bar Jain temple, the largest example of Jain architecture in Europe, hosted His Royal Highness Prince Charles as recently as 2015.
I have shared many an Ahimsa Day—a glorious occasion—with my hon. Friend. He will be aware that even many people who do not know much about Jainism know a lot about Jain temples, which are the oldest religious buildings on Earth. Is he aware of the problem with getting visas for stonemasons to come to this country to assist with repairs and extensions to our Jain temples? Will he join me in giving the Minister a gentle nudge towards being a little more generous with such visas?
I am grateful for my hon. Friend’s intervention and for his work on the all-party group. When I visited the Potters Bar temple last June, its trustees were at pains to point out the difficulty of getting visas for stonemasons to come and help with the extension. I hope to come back to that issue and, as my hon. Friend suggests, press the Minister for help with getting the Home Office to be a little more reasonable.
The Potters Bar temple is magnificent. It was built with ancient techniques and crafts. No steel was used; 1,300 tonnes of Indian marble from Makrana were shipped to London after being beautifully carved by more than 450 specialist craftsmen. Almost 6,000 carved pieces were used, including for the amazing intricate ceiling of Indian marble, which was assembled like a giant jigsaw puzzle in just 15 months. That is why stonemasons need to be brought in from India, with the specialist expertise to which my hon. Friend rightly referred. I have also had the honour of visiting the Jain temple in Kenton, which is slightly nearer to my constituency and is attended by many Jains who live in Harrow West.
Jainism was founded in the 6th century BC. Jains trace their history through a succession of 24 Tirthamkara, or enlightened teachers.
The hon. Gentleman always brings topical and important subjects to this Chamber, and I am usually here to support him. Does he agree that the 65,000 Jains who live and work in the UK, including in Northern Ireland, are more than welcome, and that their religious view must be respected at every level by every person in all the regions of the United Kingdom of Great Britain and Northern Ireland?
The hon. Gentleman makes an important intervention about the need for respect for the Jain community. He is right that there are Jains in Northern Ireland too; I am sure that they will have appreciated his intervention.
The first Tirthamkara was Rsabhanatha, who lived millions of years ago; the 24th was Lord Mahavira, who lived in about 500 BC in what is now Bihar in modern India and was a contemporary of the Buddha.
There are three major principles that most Jains recognise. The first is ahimsa, which my hon. Friend the Member for Ealing North (Stephen Pound) mentioned; it enshrines non-violence to all life in thought, word or deed. The second is aparigraha, which requires Jains to minimise their environmental impact through the non-acquisition of material goods; it discourages them from employment in sectors such as mining that can have a negative impact on the environment. The third principle, anekanta-vada, promotes tolerance through the acceptance of a multi-sided view of reality; it encourages the recognition that others have a right to their own point of view.
The principles of Jainism are believed to have inspired the idea of non-violent protest. Mahatma Gandhi was certainly aware of them; he spoke of his debt to Jainism. The principle of non-violence has led Jain culture to be vegetarian, and indeed often vegan, with fasting observed by many at key points in the year. In April and October, followers of Jainism mark Ayambil Oli, a biannual weekly festival of prayer and limited diet that celebrates discipline, austerity and self-control. In August and September, the Jain community celebrates Paryusan, an eight-day festival of fasting, prayer, repentance and forgiveness. Lord Mahavira’s birth is celebrated in April, and his final liberation is celebrated during Diwali in October and November.
I pay tribute to the Institute of Jainology, which provides the infrastructure to support Jain communities throughout the UK.
I congratulate my hon. Friend on securing this debate to raise awareness of the Jain community, not only among parliamentarians but among the general public. Does he agree that Jains do not practise Jainism for themselves alone? They bring their message of vegetarianism, tolerance and equality to wider society, promoting unity among all communities and, above all, bringing their architecture to Europe, particularly in the west London area. Their communities in this country make a very positive contribution.
My hon. Friend sums up well the contribution made by Jainism. I celebrate the contribution of all Jains, but particularly those in north-west London.
The Institute of Jainology was established in 1983 and has been registered as a charity since 1986. It supports the more than 30 individual Jain communities that operate throughout the UK and brings them together as one movement. It is led by the excellent Nemubhai Chandaria OBE, and I pay tribute to all its trustees, including Mahesh Gosrani and Jaysukh Mehta, whom I believe may be watching this debate. From 2007 to 2012, the IOJ oversaw the successful JAINpedia project, which catalogued, digitised and displayed, albeit briefly, the Jain collections in major UK institutions such as the Victoria & Albert Museum and the British Library, attracting more than 30,000 visitors. Indeed, the UK’s collection of Jain works of scholarship, arts and literature is the most important outside India. Overseen by Mehool Sanghrajka MBE, who continues on the board of the IOJ with his father, Dr Harshad Sanghrajka, the JAINpedia collection has already had 5 million website hits.
Broadly speaking, there are two major strands in Jainism. The Digambara sect, whose monks do not wear any clothes, is found mainly, but not exclusively, in southern India. The Shvetambara sect, whose monks wear white clothes, is found mainly in northern India. It is fair to say that most Jains in the UK adhere to the Shvetambara tradition. Each of the two sects is divided into sub-sects, largely on the basis of people who pray in temples—the Murtipujak, meaning “idol worshipper”—and those who do not idol worship, but use halls to celebrate their faith, who are known as the Sthanakavasi, which literally means “hall dweller”.
I have been honoured to chair the all-party parliamentary group on Jainism since its inception in 2016. With the purpose of gently raising the profile of Jainism in the UK, the APPG has had a number of successes. Last year the Jain community was finally given a place at the Cenotaph, alongside the other major world faiths and the royal family. Through the all-party parliamentary group, we have sought to celebrate the contribution of people from the Jain community who have dedicated their lives to community service in the UK, and of non-Jains who have personified the Jain principle of non-violence and compassion.
On the subject of community service, the Jains whom I know are exemplary in their contribution to the community. Does my hon. Friend agree that it is somewhat sad that we do not have a single Jain Member of Parliament? I appreciate that Jains might be doing a huge amount of work in the community, but does he agree that perhaps it is time for a Jain MP to bring some of those glorious principles, which he has so beautifully enunciated, to this place? Would we not be a better Parliament for having a Jain MP?
My hon. Friend is absolutely right. We would be a better and more representative Parliament if there were a Jain MP; equally, there are no peers in the other place who are from the Jain faith. He raises a point that I wish to address: the role of political parties in changing the situation.
Some Jains have received recognition for their work in the UK through the honours system. They include Dr Vinod Kapashi, who runs Kenton temple with the support of others, Mrs Vilas Dhanani and Mrs Kusum Shah. Jain businesses have made a huge contribution to the UK economy across every sector, with leading businesses in education, transport, finance, hospitality, real estate and pharmaceuticals, to name just a few, all run by members of the community. An important example is Sigma Pharmaceuticals, led by Bharat Shah. It is the largest independent pharmaceutical wholesaler in the UK and was a national champion in the European Business Awards back in 2017. It is a family-run company with Jain principles at its heart, and for almost 40 years it has served independent pharmacies, dispensing to doctors and hospitals across the UK.
Another Jain-led business is Comline, which was established in 1991 and is a leading independent British supplier of aftermarket replacement vehicle parts. It is headquartered in Luton and has rapidly expanded to ensure efficient logistics from four key European hubs, which are located not only in the UK, but in Greece, Spain and Ireland. It has an impressive record in international trade, which unsurprisingly led to its receiving, among many other prestigious business awards, a Queen’s award for enterprise in international trade in 2016.
The Jain community has made huge contributions to charity in recent years by donating to a variety of causes in the UK and across the world, including tackling poverty, environmental issues, animal welfare and disaster relief. The community has also made donations—if the House will forgive my being parochial—to Earlsmead Primary School in my constituency, to help an excellent headteacher invest in the school’s library and other facilities.
The Jain community has a number of asks of Government and Parliament, which I will set out, and I look to the Minister to help us make progress. As I have said, the 2011 census did not get close to recording accurately the number of Jains. They had to self-identify on the census and will have to do so again on the printed return for 2021, unless the Government change course. Some 20% are expected to fill out a paper census form, and how to identify their religion is likely to lead to confusion for many Jains who do not have access to a computer.
Although it is true that Jains who complete their 2021 census return online will be able to tick a “Jain” box when they get to the question on religion, the procedure is not as simple as one might hope. They will have to tick the “Other” box and then type the letter “J” to bring up a list of religions starting with “J”. I fear that the failure simply to offer a “Jain” box in the religion question on the main census form will once again lead to significant under-representation of the true number of Jains in our country.
In 2011, many Jains who did not note their specific religion ticked the “Hindu” box. They did so because many Jain families in the UK have links with India, which was known as Hindustan before the British came along. For many Jains, being a Hindu is a geographical description—they are very comfortable with it—of where their family are from. Confusion and misidentification of people’s religion was therefore inevitable in 2011, and we risk the same mistake happening again. In my opinion, the 2021 census could easily offer a “Jain” box in the religion question. After all, Jainism is a major world religion and the seventh largest in the UK. As I have outlined, there is already evidence of significant under-reporting. Why will the Government not grant that simple request?
Using data from Jain temples, we know there are an estimated 60,000 to 70,000 Jains in the UK, but just 20,000 or so identified as such in the previous census. The Office for National Statistics has been lobbied by the all-party parliamentary group and representatives of the Jain community, but it is refusing to budge. I look to Ministers to give a stronger steer to the ONS to put that omission right.
There has been little recognition of Jainism by public broadcasters. It is a significant world faith, with significant places of worship in the UK, yet the BBC and other broadcasters do little to acknowledge that fact. I hope the Minister is willing to help facilitate a meeting between representatives of the BBC and the Institute of Jainology, to help put that omission right.
With inaccurate data, public services such as NHS trusts have more of an excuse for not planning appropriately for their local community. The need for a Jain crematorium is particularly urgent. The traditional custom in Jainism is to cremate the body within 48 minutes of death; after that, the body starts decomposing and breeds bacteria. The belief is that a delayed cremation would cause a great deal of violence and potentially spread disease. There are no Jain crematoriums in the UK, which means there is usually a one-week period between death and cremation while arrangements are made.
The Oshwal Association in Potters Bar has submitted a pre-plan to its local authority for a purpose-built crematorium at the Potters Bar temple, with a hall to accommodate large groups, adequate ritual and washing facilities, prayer rooms, a viewing room and adequate onsite parking. It has not yet received approval.
As my hon. Friend the Member for Ealing North pointed out in his first intervention, a particular challenge for Jain organisations is getting stonemasons to build, repair or extend their temples. It would be useful if the Minister could encourage the Home Office to be more sympathetic to requests from Jain communities for stonemasons who are expert in the traditions and practices of Jainism, usually from India, to be allowed into the UK temporarily to help with temple works. I took up the Oshwal Association’s need to secure visas for five such stonemasons to help extend the Potters Bar temple in time for its 50th anniversary celebrations. Initially, all five visa requests were refused. Following appeal, three were allowed and two were not. Similarly, Jain religious leaders visiting the UK temporarily often have difficulties. Again, a little more sympathy from the Home Office would be helpful.
There is a challenge for political parties. As my hon. Friend has said, there are no Jain Members of Parliament. The most senior elected Jains are currently Navin Shah, the excellent London Labour Assembly Member for Brent and Harrow, and Councillor Sachin Shah, previously leader of Harrow Council. There should be Jains in both Houses of Parliament. I look forward to all our political parties doing better at recruiting and mentoring Jain politicians and ensuring that more are elected.
Jainism is a remarkable religion, and its adherents in the UK are great British citizens. They deserve more recognition, and I hope the Minister will help us to deliver that.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate the hon. Member for Harrow West (Gareth Thomas) on securing and introducing this debate on the contribution of the Jain community to the United Kingdom, and I welcome the contributions of other hon. Members.
I hope Jains across the country had a wonderful Mahavir Janma Kalyanak recently, as they came together to commemorate the birth of Lord Mahavir. I was pleased that the Prime Minister provided a message to the Jain community and sent her very best wishes as it came together to celebrate Mahavir Jayanti.
I also thank my hon. Friend the Member for Harrow East (Bob Blackman), to whom I have spoken about this subject. Although he could not be with us today, I know that he and the hon. Member for Harrow West are fully committed to serving not just the Jain community in Harrow, but all communities irrespective of belief and background. I commend them for their public duty in doing so.
I thank the members of the all-party parliamentary group on Jainism, ably led by the hon. Gentleman, for its work in helping to raise the profile of the Jain community in Parliament. In particular, I thank the Institute of Jainology and its chairman, Mr Nemubhai Chandaria OBE. Nemu and his team do a wonderful job representing the Jain community, including through their engagement with the Government, and especially my Department, to create and foster better understanding of Jainism.
We must of course pay tribute to the Jain community for its incredible contribution to British life, some of which we have heard about today. Jains from India and east Africa have successfully settled and integrated here, and they have made Britain their home. The Jain community comprises hard-working individuals and families, and is entrepreneurial in spirit. It is economically successful and continues to make a positive difference in our local communities. I know very well how faith groups and people from ethnic minorities can make our communities better, safer and stronger. Britain is stronger for her diversity. The Jains’ views of tolerance, respect and ahimsa help us to forge stronger and safer communities.
Lord Bourne, the Minister for Faith, recently attended the Mahavir Janma Kalyanak celebratory event last month in Portcullis House. He was honoured to have been asked to present community service awards to deserving members of the Jain community, including Dr Harshad Sanghrajka MBE, who received the ONEJain lifetime achievement award for his tireless work over 50 years supporting the Jain community; Mrs Shah for her charitable work in the UK and overseas; and Mrs Sheth for all that she has done over many years at the Navnat Vanik centre to manage the community catering as well as the weekly programmes for the elder members of the community. They have all gone above and beyond what is expected of them, all in the cause of helping their communities, voluntarily and without expectation or favour.
Charitable work and selfless service to the community are an important aspect of Jainism, whether in this country or anywhere else around the world. The Government are always delighted to receive nominations for honours from all faith communities to recognise their hard work. It was particularly satisfying to see the work of two Jains recognised in the most recent Queen’s new year’s honours list—Dr Vinod Kapashi, who received an OBE for services to Jainism, and Mr Ajay Gudka, who received an MBE for services to charity and to the community in Gujurat.
One topic I would particularly like to highlight is the work of the Jain community to promote organ donation and increase the number of donors across the Asian community. I applaud Jains and Hindus for bringing that important and often difficult subject to the fore. Their vital work will help to save countless lives.
On Jains’ engagement with Government, I am pleased to say my Department has an excellent relationship with the community and is happy to support it where we can. For example, my Department was instrumental in securing a place for a representative from the Jain community to attend the annual national memorial service at the Cenotaph for the first time last year. This was very fitting in view of its being the 100th anniversary of the Armistice. Lord Bourne and everyone in the Department were determined to see Britain’s diverse faith and belief groups appropriately represented, and it was a proud moment for us when that happened and Nemubhai took his rightful place.
One of Lord Bourne’s first engagements as the Minister for Faith was to visit the magnificent Oshwal temple in Potters Bar to see how the Jain community has fully embraced unity with nature. He was invited to tour the facilities and engage with the community.
I want to touch on the specific requests made by the hon. Member for Harrow West. He will know and, I hope, understand that the census falls under the purview of the Cabinet Office, so it is difficult for me to make policy on it. He has made representations on that point to the Cabinet Office and the ONS, and I know that the ONS has been engaging extensively with the Jain community ahead of the next census. It published its proposals in a White Paper at the end of last year. Some 55 different ethnic groups, including the Jain community, were asked to make representations, and I understand that the ONS has evaluated them according to some predetermined criteria. Currently, the recommendation, as the hon. Gentleman outlined, is that there will not be a specific category for Jains, but there will be the ability to use the online facility to search and enter oneself as a Jain. I appreciate that there is some concern about that. I ask the ONS and hon. Members to keep engaging with each other and the community to ensure that the records are good. It is no good undertaking that exercise if people are not aware that they can avail itself of that option and thereby enable us to collect the vital data that, as the hon. Gentleman pointed out, is necessary to ensure the correct functioning of our services.
The second issue that the hon. Gentleman raised is the appropriate provision of crematoria. I am pleased to tell him that, just a few weeks ago, the Government announced that we will update the guidance on crematoria to ensure that the needs of different cultures and faiths in modern Britain are recognised and taken into account by local authorities. I will not go into all the details now, as the Government’s consultation response has been published and is online. The Minister for Faith has written to all local authorities asking them to be mindful of their obligations. The Government will consult on new guidance on the siting and design of crematoria, and will offer support to community groups interested in operating their own crematoria. I hope that is welcome, not just to the hon. Gentleman and the Jain community, but to different groups across the United Kingdom.
The two other issues that the hon. Gentleman raised are visas and the BBC. I would be delighted to see what we can do to get the meeting with the BBC that he asked for. Again, it is not the responsibility of my Department, but I would be happy to try to facilitate that meeting with representatives of this faith community. The hon. Members for Ealing North (Stephen Pound) and for Ealing, Southall (Mr Sharma) made the same point about temporary workers who do not fit neatly into any existing visa categories. If there are specific cases, my Department and I would be delighted to take note of them if they write to us. Typically, we raise visa applications with the Home Office.
I again thank the hon. Member for Harrow West for securing this debate. He is right to put the contribution of the Jain community on the agenda in this place. It should be incredibly proud of its record, and he should be proud of his work in supporting it in this place. The Government feel very strongly that we can support the community. Together, we can live in a cohesive society with a shared idea of what Britain means to all of us. We can come together to celebrate and embrace that, and ensure that this country remains stronger for our diversity.
Question put and agreed to.
Future International Trade Opportunities
I beg to move,
That this House has considered future international trade opportunities for the UK.
It is a pleasure to serve under your chairmanship, Mr Rosindell.
Leaving the European Union will provide us with a unique set of opportunities to develop trade policy. As we leave influences and restrictions put on us by the EU, we will be offered an exciting opportunity to compete more freely in global markets. That is one reason why I voted to leave the EU, and I know that was first and foremost in the minds of the 67% of my constituents in North Warwickshire and Bedworth who voted the same.
I recognise not only the opportunities but the challenges—we will face stiff competition globally—but we have to take the opportunity to ensure that the benefits of leaving the EU are fully recognised and, importantly, felt throughout the whole UK, not just in small pockets of it. I have discussed that with many businesses in my constituency and more widely in meetings here in Parliament, and I genuinely feel that we are ready and that the UK will be well placed to fulfil our huge potential.
As the Government know, according to International Monetary Fund projections, 90% of world growth is likely to come from outside the EU, so in future a greater proportion of UK trade will be with non-EU countries. That will be the case whether we are inside or outside the EU.
One initiative that preceded the referendum was the appointment of trade envoys. That had nothing to do with Brexit, but it illustrates the point about the enormous opportunity, in particular in developing markets. I happen to be trade envoy to Nigeria. Will my hon. Friend join me in saying what a wonderful job that that initiative does in helping to keep us in the forefront of international trade?
My hon. Friend is absolutely right. One of the priorities of the Department for International Trade, in co-operation with the Department for International Development, is to look at how to replicate and increase the effects of the economic partnership agreements. There are with seven in place now, and we want to extend them to 31 other countries, including African and Caribbean ones. The opportunity is certainly out there, and I agree with him wholly.
We have made a good start. The Government’s stance in the White Paper on trade was encouraging:
“When we leave the EU we will regain our independent seat at the WTO. As an independent member and one of the largest economies in the world, we will be in a position to intensify our support for robust, free and open international trade rules which work for all, and to help to rebuild global momentum for trade liberalisation.”
We are already seeing encouraging signs. According to the OECD, at the end of last year the UK’s inward investment stock was an impressive $1.89 trillion, more than double Germany’s, which stood at $920 billion. The Government have already established working groups and high-level dialogues with a range of key trade partners, including the US, Australia, China, the Gulf Co-operation Council, India, Japan and New Zealand. I commend that approach, and I know that the Department plans and will work to extend that list, continuing to increase global trading relationships.
Analysis in a report by Minnesota’s Minneapolis Fed suggests that were we to reduce trade and investment barriers with the rest of the world by 5%, we would raise UK income by between £25 billion and £30 billion per year, even taking into account possible future restrictions on trade and investment with EU. Dr Graham Gudgin, an economist at the University of Cambridge’s Centre for Business Research, states:
“A smart WTO Brexit with well-designed trade, immigration, agricultural, fishing and regulatory policies would, far from being a ‘disaster’, have an excellent chance of delivering substantial long-term net benefits.”
Exciting opportunities across a wide range of sectors are open to Government as we move forward.
The hon. Gentleman must know that the most advanced example of trade liberalisation is actually the single market. Would it not therefore be better for Britain to remain a member of the single market?
The hon. Gentleman will not be surprised that I disagree. One of the issues with the single market is freedom of movement, which was an issue in the referendum, and similarly the customs union ties our freedom of policy. Being able to develop our own wider trade policies offers far more exciting possibilities to my constituents and to businesses around the country.
Speaking of my part of the country, it is good to see that, primarily as a result of Brexit, a new strategy is forming. Traditionally, parts of the midlands have tended to work separately on their trade policies, but through initiatives such as the midlands engine they are working much more closely together, with a great sense of teamwork and unity, and more joined-up thinking to deliver a wider, more focused outlook, which is to the benefit of the midlands as a whole.
I raise my main topic today as one who was an insurance broker for more than 20 years and as chair of the all-party group for insurance and financial services. I will focus my comments on this sector, because insurance has to play a leading role in our future trade success. It is fundamental to economic improvement in every one of our constituencies, and is apparently one of the UK’s most successful export industries.
I say that insurance is important in all our constituencies because overall it employs about 300,000 people and, contrary to popular belief, two thirds of those jobs are outside London. The specialist London market itself employs about 52,000 people, but again, 17,000 of those jobs are outside London. In terms of premium income, the UK market is bigger than all the markets of its major competitors—Bermuda, Singapore and Zurich—combined. This country attracts large commercial business from more than 200 territories around the world, bringing to the UK about £65 billion of premium annually. On top of that, we have a reputation for product innovation to cover new types of risk. That is important as technology grows. Some of the products recently developed in London include cyber and data-breach insurance, stand-alone terrorist cover and natural catastrophe cover.
We cannot afford to be complacent about the industry, though. Research by the London Market Group, highlighted that premium coming from emerging markets into the UK has declined and that we face significant and growing competition from overseas, especially from markets in Bermuda, Singapore and Zurich, whose Governments support regulators that actively promote their industries and insurance markets. Meanwhile, our share of mature insurance and reinsurance markets stagnates. Asia is the highest growth market globally, and the region in which the UK lost the most ground in commercial insurance between 2013 and 2015, mainly to growing regional insurance hubs such as, again, Singapore, which had an annual growth rate of 4%.
The UK is the third biggest by value importer of food. If the United States wants access to that market, with lower quality food and hormone-impregnated beef for instance, does the hon. Gentleman think that is a permissible exchange for greater penetration for insurance and other financial products into the United States?
Although the US is one of our biggest import markets, I do not necessarily think so, because the Government have committed to maintaining high food standards. I am primarily talking about the insurance industry; I am sure the Minister can give some reassurance, but I think there is plenty of scope for us to grow imports from a whole range of countries around the world. The scope of where our imports come from seems to be very narrow.
Research published in December by the Centre for European Reform suggests that if Britain leaves the single market, even with an ambitious future trade agreement with the European Union, exports of insurance and pension services from the UK would be almost 20% lower per year. Does the hon. Gentleman think that, however difficult it would be to present it to his constituents, staying in the single market might be the best way to protect a considerable number of insurance jobs in his constituency and elsewhere?
I do not. I have spoken to a wide range of stakeholders, including the London Market Group, Lloyd’s and the Association of British Insurers. I will make the point later that from their perspective, even free trade agreements are not necessarily the way forward.
Returning to the trend of the loss of global market share by UK commercial insurance, it is particularly important that the Government and industry consider the measures that can be introduced to reverse that trend, to encourage more trade and opportunities and, crucially, to promote the industry. It has long been argued in the insurance sector, and is something I have raised many times in this House, that our regulators should have a dual role—they should promote on the international stage. That would mirror what many of our competitors around the world already do, particularly in emerging areas.
We need domestic reform just to put us on a level footing with our competitors. UK regulators should have a regard for our international competitiveness. That means they would have to consider the impact of their decisions on the ability of UK-based financial services to compete on the international stage that we want to have access to. The sector has repeatedly made the point that progress does not necessarily rely on agreeing formal free trade agreements—they are not the be-all and end-all. The Government can make substantial progress now using some of the existing tools available to them such as financial and economic dialogues, which offer real benefits in shorter time frames. There would be an opportunity to turn them into bilateral agreements in future—the ABI highlighted that in relation to China and India in particular.
To remain internationally competitive, a future regulatory framework needs to be outcome-based. There is a view that trade should not be prevented by technical divergence between the UK and third countries if the outcome of the regulation is the same. So that we are not overtaken, it is important that Government, in partnership with organisations such as the LMG or the ABI, promote the unique benefit of access to our commercial insurance markets, given the significant economic and social benefits of expanding insurance provision and the growing protection gap challenge that many countries face.
I would like to draw the Minister’s attention to the London Makes it Possible campaign, run by the London Market Group. It is designed to promote London and the UK as the world’s pre-eminent insurance hub. It reminds countries around the world of the business range of risks we cover and is something that Government could get behind, to promote us. It has a fantastic website, where it is interesting to see some of the world-leading risks that we cover, and how our market is so different.
The expertise in this country enables us to place highly complex risks. The question is: where should we consider targeting? There are opportunities to grow the insurance trade in a number of developed and emerging markets. The ABI has identified 11 priority markets for future international trade, including China, India, Japan, South Korea, Canada, Switzerland and the United States. In addition, the LMG has identified its own target markets: the US again and the markets of the Association of Southeast Asian Nations, which have huge cyber-insurance opportunities. Latin America has one of the lowest insurance penetrations in the world, largely due to measures to shield those countries from international insurance markets. Although it is understandable why they may want to do that, those measures limit the pooling of risk and make the insurance of large-scale natural disasters next to impossible. Importantly, that puts up costs for consumers and reduces take-up.
I visited the US last year with the British-American parliamentary group, to discuss financial services post-Brexit. We went to Washington and New York to see at first hand how important our insurance industry is there. The US continues to be the London Market Group’s single biggest source of business. In 2017, Lloyd’s under- writers wrote approximately £13.5 billion of US business, contributing to a total of approximately £20 billion of London Market Group premiums. The US spend on cyber-insurance alone is expected to reach $6.2 billion by 2020. It also faces a growing need to strengthen resilience against natural disaster and to bolster federal and state insurance programmes. The three hurricanes in 2017 caused more than $217 billion-worth of damage, of which only $92 billion was covered by insurance.
The Government have already made important progress in negotiating and signing the UK-US covered agreement for reinsurance, which removes some collateral requirements and encourages regulatory dialogue between the UK and US. That is a very welcome step to developing a new post-Brexit trading relationship between the two countries. The UK is ready to take advantages of those opportunities. World-leading insurance expertise is already based in this country so it will be a critical industry for us.
Leaving the European Union with the deal that the Prime Minister hopes to get would do 6% damage to GDP. Leaving with no deal would do 8% damage. An American trade agreement would boost GDP by about 0.2%, which is a thirtieth or a fortieth of that, depending on the scenario. That means we would need about 30 or 40 US-style agreements to make up for the economic damage that Brexit will do.
I believe it is not just about US agreements; I mentioned many other countries where there could be an opportunity for future agreements. It is interesting to hear that remark from a member of the SNP, which is looking to leave the UK, where 60% of Scotland’s exports come from.
Will the hon. Gentleman give way?
I am sure the hon. Gentleman will be able to intervene later, as I want to wind up my remarks.
I began by saying that leaving the EU brings a unique opportunity to the UK. In order to make the most of leaving, we need to rethink our strategy. The creation of our own UK regulatory framework can play a big part in that. I want to make it clear that the insurance industry is not looking for standards to be reduced or diluted. It is committed to maintaining standards, but it needs to be able to compete on the global stage. We should be under no illusions: regulation is a key factor in businesses deciding to invest here and to send their people here. It is really important that the Minister has at the forefront of his mind the need to retain proportionate regulation so we are not put at a disadvantage.
In March, following his spring statement, the Chancellor announced that the Government would review the UK’s future regulatory framework for financial services to
“maintain world-leading financial services regulatory standards, remain open to international markets, and realise new trading opportunities.”
An international competitiveness duty should be a priority for that review. As I said, I think there are exciting opportunities ahead. Those of us who believe in the potential for our trading future were heartened by the International Trade Secretary’s comment that we will
“break down the barriers to trade wherever we find them.”—[Official Report, 16 July 2018; Vol. 645, c. 43.]
That needs to be our mantra as we move forward. I look forward to hearing what the Minister has to say about how we can continue our progress.
I shall be brief. It will be a massive challenge to recover the trade that we shall lose. We currently negotiate as Team EU; standing alone as Britain, negotiating with other countries—particularly large ones, such as the United States and China—will be very difficult. There is a debate about climate change in the main Chamber at the moment. It seems to me that we shall have to trade further afield, which will harm our climate. I hope we see the introduction of carbon pricing to save the climate, but that will not be good for trade.
The hon. Member for North Warwickshire (Craig Tracey) mentioned the WTO. There are 160 countries in the WTO, many of which have dictators and so on, and they will jointly make rules that govern us. It is a massive organisation, with a panel of unelected judges that will impose rules on our courts. We will not, for instance, be able to bring the railways and water companies into public ownership, as some in the Labour party would like to.
There will also be a great threat to our standards from things such as hormone-impregnated meat, chlorinated chicken and the sale of asbestos, all of which we see in the United States. The United States is likely to put pressure on us to allow the lowering of standards in exchange for access to digital and financial markets, for example.
I just note that when the International Trade Committee went to Japan and South Korea, the thing that sparked most concern among Japanese investors was the nationalisation of industries under a potential future Labour Government. That caused greater alarm than any discussion about Brexit. Does the hon. Gentleman agree that nationalisation may cause wider worry among international investors?
Ironically, the architect of the single market was largely Margaret Thatcher. As has been pointed out, it is one of the most perfect marketplaces in the world. She enabled the Japanese to platform into the European marketplace. Of course, they are all leaving now, because we are Brexiting. There is an EU-Japan deal, which we will be cut out of, and the car manufacturers are moving for that reason, too. Historically, the Japanese brought together the Government and industry in a way that allowed platforming, and used active government to help industry. That is what a Labour Government would want. The Japanese are not very happy about Brexit, and they are basically pulling out, which is a complete disaster for Britain.
On how we move ahead with the Trade Bill, I want assurances from the Minister about the scrutiny, accountability and transparency of future trade deals. It seems to me that there will be enormous pressure on standards, human rights, the environment, workers’ rights, consumer rights—everything. The Department is denying access even to the aims and objectives of trade negotiations, which are transparent in the United States and the EU. In fact, as I understand it, there is currently a freedom of information case in court because the Department is resisting providing access to that information. That is appalling. It bodes very badly, and I am very concerned.
I also want assurances from the Minister about investor-state dispute settlements, especially as fracking companies, for example, presumably will want to continue the appalling work that this Government have started. We are debating fracking to a certain extent today in the main Chamber. It is so destructive. The Minister may know that 5% of the methane is leaked, and that methane is 85 times worse than carbon dioxide for global warming, making fracking worse than coal. Under investor-state dispute settlements, big fracking companies such as Lone Pine have fined the Canadian Government hundreds of millions of dollars for imposing a moratorium on fracking in Quebec. Will he therefore rule out investor-state dispute settlements?
Will the Minister ensure that Parliament can fully scrutinise and agree on the negotiating aims of future trade deals? Will he allow MPs to access some of the documentation, and to have debates and votes? We do not want, week after week, to be presented with a deal versus no deal choice in which the Government say, “Here’s the deal with Chile. If we don’t sign it, even though it’s not as good as the one we’ve got already, we won’t get anything. Come on,” and force through appalling trade deals that are not in our interests and may undermine human rights abroad and environmental protections here and elsewhere.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I am sure that, given your passion about Brexit, you would like to speak in the debate yourself. I am grateful to my hon. Friend the Member for North Warwickshire (Craig Tracey) for securing the debate. What a refreshing change it is to talk about opportunity rather than threat—it is just a shame that we do not have longer to do so.
I do not wish to retread well-worn ground, but one of my abiding concerns about the withdrawal agreement is that it will, in effect, preclude us from drawing up an independent trading strategy, with the customs arrangements in the backstop effectively becoming the blueprint for the future relationship. That would cause us to enter a de facto customs union with the EU and be tethered to the EU’s regulatory regime without a seat at the table, as was confirmed by the Prime Minister’s admission about the commonalities between her customs position and that of Mr Corbyn. I do not see that loss of power as compatible with the public’s decision to leave the EU.
It is a myth that the customs arrangements in the withdrawal agreement would deliver frictionless trade with the EU. One freight forwarder told the International Trade Committee that
“a softer Brexit would deliver a harder Brexit for us”.
Indeed, with UK wet stamp certifications or similar for every consignment to or from the EU and Northern Ireland, and a customs arrangement tantamount to Turkey’s, in which the EU’s trading partners would benefit from access to the UK market without our deriving reciprocal access, the withdrawal agreement would preclude us from signing meaningful new FTAs and open up huge potential for tax leakage when it comes to tariff collection. I believe that would come very quickly to be understood as a substandard arrangement from which we would have no unilateral right of exit.
That is not to say that our future trading relationship with the EU should be deprioritised, or that to move away from the EU’s regulatory orbit will be plain sailing, or necessarily desirable in every sector. However, our future relationship must be placed on a sustainable footing, and such an asymmetric arrangement would not allow for that.
My desire has always been for us to strike a comprehensive free trade agreement with the EU, accept and then manage any trading friction that would cause, and offset costs through a competitive tax and regulatory regime and a broader range of new trading agreements that would—over time, admittedly—allow UK companies better to plug into growth markets or to enhance access to countries with which we already have strong trading relationships. Until that EU-UK relationship is determined, however, we have effectively put on ice the opportunities available with third countries, many of which are necessarily waiting to see the extent to which we are tied into EU structures to assess how deep a trading relationship they can have with us.
Looking to the future, it is important to underline that free trade agreements are not a panacea, but can none the less be used as a catalyst to deepen bilateral ties or simply to kick-start workstreams. We had a fascinating discussion at the International Trade Committee this morning about how Brexit has already had a positive impact simply through the creation of the Department for International Trade, which provides momentum and focus, and by sparking often overdue audits by UK companies of their agility, productivity and exposure to risk. The creation of a DIT database of trading opportunities for UK businesses has been enormously valuable, while the packaging of UK investment prospects in brands such as the northern powerhouse and the midlands engine has helped companies and trade bodies better articulate opportunities to prospective investors.
Companies have generally been impressed by the skills and energy of DIT teams in our embassies, but now they want those teams to enhance their regulatory knowledge, extend their networks to lobby more effectively and gear themselves to long-term relationships with key decision makers to act as experienced Sherpas to UK businesses. That will require lower churn of staff and a more extensive network of offices, particularly in different regions of China and states in America, where we can only achieve so much at federal level. The big prize would be in assisting mid-cap UK firms, where we currently fall short of the extensive assistance offered to the German Mittelstand by the powerful German chambers of commerce. We should also look to capitalise on and complement the existing networks of UK bodies such as the Corporation of London, which has developed city-to-city agreements with the likes of Tokyo and Shanghai on green finance, asset management and more.
With trade these days stifled much less by tariff than non-tariff barriers—admittedly the context is changing somewhat under the Trump Administration and the deteriorating relationship with China—future free trade area negotiations can be a focal point for, but need not hold up, wider country-to-country discussions on issues such as recognition between respective trade bodies of professional qualifications that would allow for the easier transfer of skilled staff; swifter, less costly visa regimes; research co-operation between universities; and working groups on regulatory harmonisation, such that close ties with countries like the United States, Australia and Singapore could create momentum for a move towards global standards in key industries of interest to us such as financial services, tech and the digital economy. Those are especially important issues for a services economy such as ours, and the coming together of powerhouses in financial services and life sciences such as the US and the UK could have a tremendous impact on the setting of those standards.
Should we ever get to the point where we can negotiate new FTAs, we ought to have completed an analysis of the errors made in the Brexit and Transatlantic Trade and Investment Partnership negotiations. I recommend, and I know the Minister agrees, that we ensure that Parliament has scoped out and agreed to a broad mandate for any new FTA and is able to access information about ongoing negotiations via a new, confidential parliamentary committee that could access relevant paperwork, trade expertise and legal advice.
Meanwhile, we should seek immediately to knock on the head unhelpful canards about chlorinated chicken or US healthcare companies being able to sue the NHS. Modern bilateral agreements are flexible and can permit carve-outs for sensitive areas of trade. The FTA between China and Australia, for instance, does not allow access to certain aspects of Australia’s pharmaceutical and healthcare system, while investor dispute settlement mechanisms are absent from large parts of the Canadian and American trading relationship. Ultimately, however, in being able to determine our own trade policy, we can be compelled neither to enter nor remain in any FTA or investment treaty that we do not believe to be in our interests, subject to notice.
There is so much more to say on this subject, but other Members wish to speak. Finally, I hope that this realignment of UK trading prospects is not hindered by the signing of a substandard withdrawal agreement that places us either implicitly or explicitly in a customs union, and that this debate marks the start of a more positive, creative discussion about the new trajectory on which we can place our nation in the years ahead. Ours is the world’s fifth-largest economy, strong in so many expanding areas such as services, science and digital technology, and able to attract huge amounts of investment despite the uncertainty that Parliament has created over Brexit. With skill, verve and leadership, the UK can eventually emerge a nimbler, more dynamic economy, not only better positioned to plug into growth markets but better able to deliver tangible benefits to the people and businesses we represent.
I congratulate the hon. Member for North Warwickshire (Craig Tracey) on what so far has been an interesting debate. I gently remind the House of the promise that the International Trade Secretary made to have signed some 43 trade deals by the end of March 2019. Not surprisingly, that has not been achieved, and we are some way from seeing those 40 so-called roll-over EU trade agreements signed. That is an indication of the complexity of trade. While, as the hon. Member for Hornchurch and Upminster (Julia Lopez) alluded to, many things can affect future trading opportunities for British businesses, the instability of not having sorted out proper trade agreements with both the European Union and other key markets is likely to inhibit the international trading opportunities for British businesses.
I raise in particular concerns about trade in services, because the vast majority of the jobs done by my constituents that directly involve international trade are related to services. The few bits of detailed thinking from independent trade experts about the impact of Brexit on trade in services highlight the huge significance of such trade between the UK and the EU, and therefore what is at risk, in terms of scale, for the UK economy from any inhibitions of trade in services.
In 2017, according to the Centre for European Reform, services accounted for some 45% of total UK exports, or almost £300 billion. The EU received 40% of those exports, the highest proportion of any UK trading partner. Research by the Centre for European Reform suggests that if Britain leaves the single market and trades services under the provisions of an ambitious free trade agreement, on an annual basis UK exports to the EU of financial services will none the less be 60% lower, UK exports of insurance and pension services will be almost 20% lower, and exports of other business services, including law, accountancy and professional services, will be 10% lower. Those are all sectors in which Britain has a significant comparative advantage, so jobs, investment and tax revenues are all at risk in the case of withdrawal from the single market.
I am grateful to the hon. Gentleman for giving way on that point, which leads me to the point raised by the hon. Member for North Warwickshire (Craig Tracey). The stats he just gave lead to the 6% damage there would be to GDP. When I pointed out that we would need 30 or 40 America-style agreements, he said we can find more countries and more deals. The only problem is that the USA is a quarter of the world’s GDP, so we would need seven to 10 planets to make up for the damage the UK is inflicting on itself with Brexit.
I agree; the hon. Gentleman makes a good point. Without dwelling on that point, the CER report helpfully points out that it is significantly more difficult to open services markets than goods markets to trade, because many barriers to trade are regulatory in nature. The quality and safety of a service is difficult to decide at the border.
As I pointed out in my intervention on the hon. Member for North Warwickshire, no group of countries has gone further than the European Union in making it easier to sell services produced in one country in another in a bloc, yet still barriers remain. Therefore, pulling out of the single market and negotiating a free trade agreement, however ambitious it ultimately is, would inevitably throw up new barriers to trade, particularly if we withdraw from the EU’s collective rulebook, shared institutions and cross-border enforcement regimes, as it appears the Prime Minister wants. Some of the impact of withdrawal from the single market for services could be offset with, for example, significant mutual recognition of qualifications and—more controversially—the temporary movement of people.
It is not fashionable to worry about the future of financial services—the case for further regulatory reform of the industry can easily be made—but it remains one of the few world-class industries we have in the UK, and it is clearly set to be damaged significantly, putting jobs in my constituency at risk. For that reason, I urge the House to vote for us to stay in the single market as part of a soft Brexit deal, put back to the British people in a public vote with the option, nevertheless, to remain in the EU.
I call Faisal Rashid. However, I ask the hon. Gentleman to keep his remarks fairly short as we are running out of time for the winding-up speeches.
Thank you, Mr Rosindell. It is great to serve under your chairmanship. I thank the hon. Member for North Warwickshire (Craig Tracey) for securing this important debate. I will try to be as brief as possible.
International trade could not be more integral to both the history and the future of this country. Britain’s prosperity has always been tied to how we do business with the rest of the world. Our trading relationships determine our living standards, jobs and access to resources. It is high time that Members paused to reflect on the great trading potential this country could have under the right political leadership. Trade is not only a critical source of wealth creation; when tied to an open, rule-based system trade can also be a great driver of human rights and social justice. Now, in an era when unilateralism and protectionism is on the rise, it is more important than ever that we reflect, reject self-imposed isolation and explore fresh opportunities for UK businesses overseas.
Britain’s international trading practices can reflect our core values of mutual respect and shared prosperity, because not all trade is good trade. In international trade deals profit-making has too often taken precedence over workers’ rights and public services. The Government must provide more assurances in future trade deals with the US that our NHS is not put up for sale to large American pharmaceutical companies. If managed by the Tory right, trade deals, particularly those with the US, could severely undermine UK food, health and animal welfare standards. That could have a damaging impact on rural communities and undermine faith in the great potential prosperity that international trade can unlock. Parliament has no guaranteed role in scrutinising trade deals, despite their broad implications, because it currently follows an outdated convention from the 1920s. I believe that MPs must have a meaningful vote, as a minimum, before and after trade negotiations to prevent those damaging outcomes.
Yesterday, I chaired a two-hour panel discussion on Britain, Brexit and the belt and road initiative. As we prepare to leave the world’s largest single trading bloc, I asked, “How should post-Brexit Britain respond to the world’s biggest ongoing infrastructural project—China’s belt and road initiative?” It is not a question that the Government appear to be asking of themselves. This country is practically directionless on questions about long-term geopolitical significance; we are being left behind on the global stage. I am sure many Members have had—as I have had—countless conversations with dynamic businesses and talented, enterprising workers. I see great, untapped trading potential in my constituency, but we need to do more to maximise the opportunities afforded to those businesses overseas.
One in four British SMEs is currently involved either directly or indirectly in exporting overseas; supporting the growth of these industries is central to my work as an MP. I call on the Government to re-energise our approach to trade. We should reject the failed doctrines of free-trade orthodoxy and Trump’s tariff wars, to promote a just trade agenda, with an active state that is committed to upholding social and environmental standards. We must align our international trade policy with a comprehensive industrial strategy, creating opportunities at home and abroad that provide access to a range of skilled and well-paid jobs. A better future is possible and rethinking our approach to trade is the key to unlocking it.
I shall be brief; I love these one-hour debates, but we are now seeing the limitations of them.
I agree with the hon. Member for North Warwickshire (Craig Tracey) in one or two regards: we will most certainly face stiff competition, there will be substantial growth outwith the EU, and there is a range of opportunities. Where I disagree with him is that I do not believe we are ready. In terms of the opportunities that exist—as I will explain later, and as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), who is Chair of the Select Committee, said—I do not believe that they will fill the gap we are about to create.
Along with many Members, including the hon. Member for North Warwickshire (Craig Tracey), I am keen to talk about services in this regard; they have been ignored so far in the debate over customs, tariffs and checks at the border. They are the largest part of our economy and they are a substantial minority of our total exports, but the starting point about services does not fill me with confidence. If one looks at the Swiss deal, the House of Lords report said:
“Most trade in services, which make up 52 per cent of all UK-Swiss trade, is not covered by the deal.”
Lord Boswell went on to say that the deal with Switzerland
“in many aspects differs significantly from the EU-Swiss agreements it replaces.”
Likewise, after the deal with Norway was announced it was confirmed that it did not cover service trade or technical regulations for food, animals or plants. If we cannot replicate in the continuity agreements what we already have with friendly trading partners, it does not augur well for cutting new and innovative deals. I hope the Minister will say a word or two about how he intends to get around that obstacle when we start negotiating in earnest.
My hon. Friend was very kind, when he started his speech, in agreeing with the hon. Member for North Warwickshire (Craig Tracey). I am sure there is much to agree with, but I would like to pull the hon. Member for North Warwickshire up on the point he made about Scottish independence and the SNP. Scotland is not talking about walking out of trade blocs or ripping up trade agreements; it is talking about completing the process of political devolution, which would be independence. A country that has done that already and devolved from the UK—namely Ireland—is now in a trading bloc that represents about 22% of global GDP and it has an equal voice, while Scotland is stuck as a hostage in a little place that represents only 4% of global GDP.
My hon. Friend makes his point himself; I will not spend time agreeing with him, although I do entirely.
The Swiss and Norway continuity agreements demonstrate what happens when negotiations take place from a position of weakness. In the EU-US negotiations we have seen the US adamant that agriculture would be included in any deal, but the EU trade commissioner Cecilia Malmström told the US trade representative that they could not negotiate on agriculture. She has been quoted as saying:
“We have made very clear agriculture will not be included.”
She can do that from a position of strength. My great concern is that the UK is negotiating from a position of profound weakness, as evidenced by the failure of the continuity agreements, meaning that we may well face all the downsides of the US and others seeking an agricultural deal that will weaken food, hygiene and environmental standards. How does the Minister respond to that? It would be useful to know.
I finish by making a key point that was mentioned by my hon. Friend the Member for Na h-Eileanan an Iar when he talked about export figures. The National Institute of Economic and Social Research suggested that any Brexit would see a loss of around 20% in total UK trade. Cutting a deal with the main English-speaking economies would see an increase of 2% to 3% and cutting a deal with the BRIC countries would see an increase of 2% to 3%. If we lose 20% of our total trade, the best we can do with the biggest economies in the world is to claw back maybe 5% or 6%. It is a pretty bad starting point. How does the Minister intend to ensure that there is a real focus on filling the gap and making sure that no part of the country, no part of the economy and no workforce is sacrificed on the altar of Brexit ideology?
In congratulating the hon. Member for North Warwickshire (Craig Tracey) on securing the debate, I call on the Minister to deal with the point made by the hon. Member for Dundee East (Stewart Hosie). What the hon. Member for North Warwickshire failed to address was not so much the need for seven or eight new planets, but the gaping black hole that cannot be filled by the figures he gave for how we will replace trade with the EU.
It is fitting that we are debating the future of international trade at the same time as Members in the main Chamber are discussing Labour’s call to declare a climate emergency. The opportunities in the low-carbon economy for trade in goods and services as part of—as the Intergovernmental Panel on Climate Change has said—the global economic benefits of $26 trillion, need to be at the heart of our industrial and trade strategy. However, before concentrating on the export potential of renewable technology, I will spend a few minutes on other topics.
Trade in services is vital to our economy. The hon. Member for North Warwickshire mentioned the importance of insurance, and my hon. Friend the Member for Harrow West (Gareth Thomas) mentioned the other service parts of the economy that are crucial to his constituents. Trade in services represents the majority of the economy, driving jobs and prosperity to Britain, and it will be significantly impacted by the nature of our future relationship with the EU. Having a strong relationship with the internal market of the EU is therefore essential.
Turning to the Government’s failure to make progress in negotiating replacements for the 43 agreements with 70 or so countries to which we are party through our membership of the EU, at the last count we were told that four deals were off track, 19 were significantly off track, four were impossible to complete and two were not even being negotiated. Perhaps the Minister can update us. It is no good the Government’s saying we should have voted for the Prime Minister’s deal. The fact that the details of the future relationship with the EU will be negotiated only after we have left means that what is on offer is blind Brexit. That is why the Opposition cannot support the current deal.
Is it the view of the Labour party that we should have disregarded the EU’s statement that, under its laws, it did not think it was possible to negotiate the future partnership until after we had left?
That is another debate. I will stick to the topic of international trade and future arrangements.
As any business person knows, you look after existing relationships first and maximise them—something I learned through running a business for 15 years. The same principle applies to countries, which is why a close relationship with our biggest trading partner is essential. Meanwhile, there is no sign of the Trade Bill returning from the Lords, and Government plans to implement zero tariffs unilaterally really would create a disincentive for countries to negotiate a trade deal with us, because we would be giving away the shop before negotiations started and would have nothing to offer in return for a trade deal.
I want to give the Minister plenty of time to respond, so in the time remaining I will speak about the low-carbon economy and the need to address the climate emergency. This Government’s record in international trade is a cause for concern in relation to the low-carbon economy: £2.362 billion of UK export finance over the past five years has been spent on exports to low and middle-income countries in the energy sector relating to fossil fuels, with just £1 million invested in the renewables sector. If we are serious about tackling climate change, those figures need to be completely reversed, so it is disappointing that after the Intergovernmental Panel on Climate Change’s report last autumn, this Government announced that they were considering support for a Bahrain oil refinery.
We have many success stories in renewable energy; we are often world leaders in technology—Windhoist, for example, sells wind turbines to Taiwan and Australia—but for other companies there is only frustration. Award-winning exporter Nova Innovation exports tidal energy equipment. Its chief executive officer, Simon Forrest, says:
“At the moment, we hold the trump cards in marine power—the resource is abundant, it’s completely predictable, we have a global lead and we have got the supply chain. What we don’t have is revenue support to take us to market. That’s what Denmark did with wind, and we didn’t. Having built up this lead, we will lose it to Canada or Japan.”
We cannot afford to let that happen in sectors such as tidal energy. We can be leaders in the low-carbon economy. Meeting the challenge of the climate emergency can deliver future prosperity through a proper industrial and international trade strategy in renewables, not fossil fuels. It is time to develop the future, not the past.
I thank my hon. Friend the Member for North Warwickshire (Craig Tracey) for introducing this important debate, and thank hon. Members from across the House for the many informed contributions, which I will return to before I have finished.
This debate is important because trade really matters to the UK. At £634 billion last year—equivalent to 30% of GDP—exports are not some separate add-on to our economy; they are integral to it. That is before we even get to our record £1.3 trillion of foreign direct investment, which last year alone created 76,000 new jobs, or the benefit of imports in giving us a wider choice of more affordable goods.
That is not the high-water mark, however: there are more opportunities to come. The patterns of world trade are shifting. We are entering a Pacific century after four Atlantic ones. The latest World Bank figures show China adding an economy the size of Portugal to its GDP ever four months—a pretty astonishing statistic. The UK will be one of the few developed countries to stay in the top 10. We can take advantage of that shift if we act now. That is why the Government have consulted on new trade agreements with the USA, Australia and New Zealand, and on potential accession to the catchily named Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a cross-Pacific agreement that covers 11 nations and already 13% of the world’s GDP, including many of the growing markets to which my hon. Friend referred in his speech.
The nature of trade is also shifting. McKinsey estimates that digital trade flows contribute more to the world economy than the entire trade in goods. Services are becoming ever more international. The UK is well placed to take advantage of those trends, too. We have a flourishing digital sector, with Europe’s largest e-commerce market. We are the second largest service exporter and, as my hon. Friend mentioned, we have particular strengths in areas such as insurance, where Lloyd’s is the world leader in maritime risk and specialist insurance and reinsurance.
That is why, in December, we submitted our WTO service schedules, to give continuity for our service exporters, and why, once we represent ourselves at the World Trade Organisation, we will be pushing for further liberalisation and further reform within the rules-based, consent-based, multilateral framework it provides. That also means looking beyond traditional trade agreements, which is why my Department has secured market access for everything from energy trading in China, to beef and lamb in Japan.
My hon. Friend mentioned a report by the London Market Group. As a specific response to that report, we have set up a new workstream with LMG to promote insurers in Association of Southeast Asian Nations countries. I saw that at first hand when I visited Singapore not long ago and met Prudential, which is working with Babylon. Amazingly, Prudential has a subsidiary in Malaysia that is nearly 100 years old and another in Singapore that is 85 years old. It has subsidiaries in Vietnam and in Indonesia and business throughout the ASEAN region, and I was very impressed by its attitude. It understood the power of data and of digital to allow it to insure more properly.
Colleagues have raised a number of issues, and I would like to deal with one or two of those. We have published a Command Paper on scrutiny and have made it absolutely clear that we wish to be transparent in how trade deals are dealt with in the House of Commons. The House of Commons, and indeed the House of Lords, should have full and proper scrutiny and we are pursuing those models. We are coming to a conclusion about the way in which we wish to do that and no doubt we will in due course negotiate with various parties in the House.
The hon. Members for Harrow West (Gareth Thomas) and for Dundee East (Stewart Hosie) both noted that services are at the centre of the UK’s agenda. Barriers to trade in services are generally behind the border, and with free trade agreements we deal with those issues through joint economic forums and multilateral interactions.
An independent trade policy is an opportunity for the UK. I understand the issue of the weight of 600 million people, but that also means that our trade policy is compromised. It is compromised in a good way—do not get me wrong—but it is designed to fit 28 nations. With a UK-based trade policy, we, with the sixth largest economy—or the fifth largest, depending on how it is measured—will have a tailored free-trade policy, which will be for the UK alone, and there will plainly be advantages in that.
The hon. Members for Swansea West (Geraint Davies), for Harrow West and for Na h-Eileanan an Iar (Angus Brendan MacNeil) made plain that what they want is no Brexit at all. We all have starting points on that question. I would describe myself as a democrat first and a remainer second, and the British people, while they did not speak with an absolutely unified voice on this issue, have told us that we should leave the EU. The hon. Members’ proposition simply does not deliver Brexit.
On continuity agreements, most Members will agree that there are all sorts of different motivations among our partners.
Will the Minister give way?
If the hon. Gentleman looks at the clock, he will see that I cannot give way. Actually, rather than finishing my speech, I ought to give my hon. Friend the Member for North Warwickshire space to sum up. I thank all hon. Members.
I thank all hon. Members for taking part. I agree with my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) that we need a lot more time to debate the issue. I thank everybody for their contributions and the Minister for his encouraging response. It is probably no surprise that I do not share the Opposition’s negativity about our ability to succeed outside the EU; I look forward to our soon getting the opportunity to put that into action.
Question put and agreed to.
That this House has considered future international trade opportunities for the UK.