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Public Bill Committees

Debated on Thursday 23 September 2021

Building Safety Bill (Ninth sitting)

The Committee consisted of the following Members:

Chairs: Philip Davies, Peter Dowd, †Clive Efford, Mrs Maria Miller

† Amesbury, Mike (Weaver Vale) (Lab)

† Bailey, Shaun (West Bromwich West) (Con)

† Baillie, Siobhan (Stroud) (Con)

† Byrne, Ian (Liverpool, West Derby) (Lab)

† Cadbury, Ruth (Brentford and Isleworth) (Lab)

† Clarke, Theo (Stafford) (Con)

† Clarke-Smith, Brendan (Bassetlaw) (Con)

† Cooper, Daisy (St Albans) (LD)

† Hopkins, Rachel (Luton South) (Lab)

† Hughes, Eddie (Walsall North) (Con)

Logan, Mark (Bolton North East) (Con)

† Mann, Scott (Lord Commissioner of Her Majestys Treasury)

† Osborne, Kate (Jarrow) (Lab)

† Pincher, Christopher (Tamworth) (Con)

† Rimmer, Ms Marie (St Helens South and Whiston) (Lab)

† Saxby, Selaine (North Devon) (Con)

† Young, Jacob (Redcar) (Con)

Yohanna Sallberg, Adam Mellows-Facer, Abi Samuels, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 23 September 2021


[Clive Efford in the Chair]

Building Safety Bill

Clause 36

Determination of certain applications by Secretary of State or Welsh Ministers

May I remind the Committee to switch electronic devices to silent and to email speaking notes to our Hansard colleagues at We begin today’s session with clause 36.

Question proposed, That the clause stand part of the Bill.

It is once again a pleasure to serve under your chairmanship, and I welcome the Committee back to this final line-by-line scrutiny session before we go into recess again.

The Government are committed to ensuring that there is a stringent regulatory framework to enable the design and construction of better and high-quality homes while providing industry with the clarity and certainty that it needs. Dame Judith’s review found that unnecessary delays in the system must be minimised, and we wholeheartedly agree with that finding. The gateways and building control system have been designed to ensure appropriate consideration of building regulations compliance, including building safety, throughout design and construction.

Applicants in England are encouraged to work with the Building Safety Regulator to ensure that decisions are reached in good time or extensions are agreed, and the Building Safety Regulator will make decisions on a variety of matters relating to building control. They include deciding whether to approve or reject the following types of applications: gateway 2 building control applications, change control applications, gateway 3 applications and certain refurbishment applications. To provide industry with certainty for project and financial planning, the Building Safety Regulator will have prescribed periods in which to decide such applications.

Where further time is required—there may be occasions when that is necessary—extensions can be agreed between the regulator and the applicant. However, it is necessary to have an alternative route through which an applicant can get a decision on their application if the Building Safety Regulator has not issued a decision within the required timeframe and an extension has not been agreed, and clause 36 provides the legal basis for the Secretary of State, or a person appointed to act on their behalf, to make a decision on applications in England in such circumstances. We envisage that there will be very few applications that follow this path each year. Like applications decided by the Building Safety Regulator, there will be no set timeframe in which applicants can expect such a decision.

In Wales, failure by the building control authority to decide on an application relating to a higher-risk building will similarly allow the applicant to apply to the Welsh Ministers, or a person appointed by them, for a decision on the application. This is a means by which decisions can be expedited, and I commend the clause to the Committee.

This is a really important clause. My right hon. Friend was rather succinct in his comments, but he touched on the balancing of the environment with the Bill. As we talked about in our previous deliberations earlier this week, we want to ensure that we can still have the environment in place in order to continue to build, because we still need to build homes and ensure that there is an adequate process in place. The important part of the clause, which links to other clauses that we have debated so far, is about ensuring that there is an adequate process in place to ensure that there are no delays and that we have adequate building taking place in an expedient manner.

We also need to ensure that those who want to play according to the rules, as I discussed on Tuesday, know how to do that and can ultimately have their matters determined in an expedient manner. I am sure my right hon. Friend will touch on that in his remarks when he responds later, but I want to ensure that in the clause we maintain the balance between a proper determination to ensure safety for leaseholders and residents and an expedient manner to determine applications, which will be important.

I will not talk about the impact in Wales. I commented on that during our previous deliberations, but I fully support the clause, which strikes the right balance in the underlying tensions in the Bill. I look forward to hearing my right hon. Friend’s comments in due course.

I am obliged to the Opposition for what appears to be their support for this fairly uncontentious and important clause. I am also obliged to my hon. Friend the Member for West Bromwich West for his contribution. He is right to say that we want to ensure that building can progress expeditiously and safely. That is why we have put in place sensible review points—the gateways and the hard stops that they provide for. It is also why we have included this clause in the Bill to ensure that where there are occasions—we do not envisage many—when the Building Safety Regulator has failed to issue a decision and no extension to the timeframe has been granted, there is a means by which the applicant can move to get a decision.

We have not specified a timeframe by which the Secretary of State or the person or body appointed by the Secretary of State will be obliged to make a decision because we anticipate that in those very few circumstances a decision might not have been made because of the complexity of the arrangements. That then allows the Secretary of State or the appointed body time and space to come to a conclusion.

I am grateful to my right hon. Friend. He said that there would not be specific timeframes in the Bill, but can he assure me that there will be ongoing monitoring? The one thing that the clause seeks to achieve is an expedient process, which previous clauses have done as well. Will he touch on how monitoring of the process will be implemented to ensure the aims of the clause are enacted?

I am happy to do that. My hon. Friend pre-empts what I was going to say. In secondary legislation we will specify what we believe to be proportionate timescales in which the Building Safety Regulator will have to come to a decision on applications before them. That will place proper focus on the Building Safety Regulator and ensure that applicants get the focus and engagement that they deserve. We will ask the regulator to provide data, and the regulator will report on the number of applications that it receives and the outcome of each application, including the timeframe of each decision and whether extensions were agreed.

Over time, a body of information and evidence will be developed, which, apart from the secondary legislation statutory timeframes for adjudication that we will set, will enable the sector to see the average timeframes and outlier timeframes that the adjudications take and be able to make its decisions accordingly with respect to appeals to the Secretary of State or to the Secretary of State’s appointed appeals body.

We think that in practice the clause and its provisions will be used infrequently, but it is an important backstop, which is why we have included it. It provides, as I say, a legal basis for the Secretary of State, or a person appointed on their behalf, to make a decision on applications in England in such circumstances, and in Wales for Welsh Ministers to do similarly. I commend the clause to the Committee.

Question put and agreed to.

Clause 36 accordingly ordered to stand part of the Bill.

Clause 37

Compliance and stop notices

Question proposed, That the clause stand part of the Bill.

Dame Judith’s review found that the existing building safety enforcement regime is not fit for purpose. That is partly explained by the absence of powers for building control authorities to immediately halt dangerous or non-compliant work. That is why the Government are committed to strengthening enforcement powers for regulators to act against non-compliant building work. Clause 37 takes forward the review’s recommendation and provides more effective powers for building control authorities to ensure compliance with building regulations.

Compliance and stop notices are designed to tackle all forms of non-compliance with building regulations during the design and build stage of all buildings, irrespective of their risk level or intended use. Compliance notices will be available where there is, or is likely to be, a contravention of building regulations. Stop notices are intended to be used where a compliance notice is contravened, or where building regulations are likely to be contravened in such a way as to cause serious harm to people in or around the building.

What a pleasure it is to serve under your chairmanship, Mr Efford. It has to be welcome that we are strengthening the powers of the regulator and local authorities. As the Minister rightly says, these are vital tools for building control authorities, and there is currently no power available to stop non-compliant building work being continued or completed, which is clearly a concern. I am very keen that we do something about that. It is very important that it is tackled.

Will the Minister clarify, first, how the powers will change the bad behaviour that we have seen across the industry? We know that most people in the industry are responsible, but for those who are not, what will we do? How will this change that behaviour? Secondly, what enforcement powers will the Building Safety Regulator have for gateway 2 following on from this?

I am obliged to my hon. Friend. On the new powers changing bad behaviour, what we want through the entirety of the Bill is to effect culture change. The clause on its own will not achieve that, but it is part of the cumulative weight of the Bill, which will over time effect culture change. We envision that the additional tools that we are providing to the Building Safety Regulator, and the statutory powers that will be provided, will contribute significantly to that culture change. Safety cases, more regulation of the building control sector, and the gateway assessments and the hard stops involved in them will all play their part in driving that culture change.

We also envision an escalating set of powers for the Building Safety Regulator, and as we move through the late 30-something and early 40-something clauses, I think I will be able to provide further illumination to the Committee on what those enhanced powers will be. Additionally, it will be an offence to start certain building work in higher-risk buildings without building control approval, and stop notices could be used to stop work that is being carried out without approval. We believe—I think this goes some way towards addressing my hon. Friend’s point—that these are critical tools for building control authorities, because as he says, there is currently no power available to stop non-compliant building work from being continued or completed.

Compliance and stop notices will also provide a proportionate but effective way to require companies to rectify non-compliant work swiftly, without the need to bring a prosecution. Compliance notices will require non-compliant work to be rectified within a specified period. As the result of some work may be dangerous, stop notices will be able to halt that work. The stop will normally apply immediately, but a building control authority will have the option of setting a date from which the stop will take effect. Breach of either of these notices will be a criminal offence, punishable by an unlimited fine and/or up to two years’ imprisonment. To ensure that all individuals involved in contravening the law are held responsible for their actions, directors and managers of companies found to be complicit in such breaches can also be prosecuted for the offence, as will be further set out in future clauses. This sends a strong signal to those managing companies, as well as individuals, that they will be held responsible for their building safety duties.

The Government intend that these stronger powers will act as more effective deterrents for individuals and their corporate associates who wish to engage in non-compliant building work in the belief that they will not face any consequences for doing so. They will, and I commend the clause to the Committee.

I should have said earlier, Mr Efford, that it is yet again a pleasure to serve under your chairmanship.

We welcome the increased regulation—the compliance and stop notices recommended by Dame Judith Hackitt in the independent review—but I have a couple of questions for the Minister. Will these powers given to the regulator apply to buildings that are 11 to 18 metres tall, and will compliant products be kitemarked for ease of inspection to ensure that they are compliant, or not?

I should also have said in my previous contribution that it is a pleasure to see you back in the Chair today, Mr Efford, and I thank you for your indulgence during our previous deliberations. You are being very generous with your time in the Chair.

I have a few questions for my right hon. Friend the Minister as well, dovetailing with what the hon. Member for Weaver Vale just said. The one concern I have is about individuals who purchase their property pre-completion of construction—because that does happen in these settings too—and what protections we can devise for that. I have seen it happen before: people have put down a deposit or spent significant amounts of money on legal and transactional fees to get to a particular point. I heard what my right hon. Friend said, and I agree that we are talking about extreme cases of individuals who are flouting the rules or not following them, but my concern is that as we embed new sets of regulations, issues often become apparent quite commonly and quite quickly. I am sure that those of us who have been Members much longer than I have will have seen the array of issues that arise when new legislation comes into effect during its initial implementation.

My question to my right hon. Friend the Minister is whether he is open to a broader discussion about what we can do to avoid potential blockages in transactions as an unintended consequence of this. What we see is that people who are trying to let or purchase properties are left in limbo, with a back and forth for months on end, while stop notices are issued and remediation is done. Clause 37 seeks to ensure that remediation is taken, and, more importantly, that work in the initial process is compliant in the first place and we do not reach a situation where stop notices have to be issued.

I agree with my hon. Friend that clause 37 takes forward the important recommendations in the review to ensure that building control authorities are issuing compliance and stop notices in relation to the contravention of building regulations. Does he agree that the clause will also strengthen the powers for the regulator and local authorities?

To answer my hon. Friend’s question, we need to go back to what Dame Judith Hackitt said. She found a fundamental flaw in the regulatory framework. Effectively, it was giving unscrupulous developers almost a free pass at times. It was not fit for purpose. I believe that clause 37 will achieve the aims that my hon. Friend has articulated.

I suppose this comes back to the point that the Bill is a balancing act. My central concern is about the vulnerable leaseholders at the heart of this—the people we expect to live in these developments. There are always two sides to the coin. We need to ensure that these leaseholders are not stung at the outset by developers who are not following the rules in the first place. I am trying to impress on my right hon. Friend the Minister that we need to ensure that those processes are in place and that they work with bodies. This comes back to what the hon. Member for Liverpool, West Derby articulated in our previous deliberations around resourcing and funding, and ensuring that our local authorities, building control authorities and the regulatory framework have the expertise. We are not just trying to pigeonhole things into one particular resource package.

I notice the reference to the appeals process in clause 37. I am sure colleagues have read it in as much depth as I have. It talks extensively about the appeals process. That requires our court system to be functioning in a way that allows the process to be as expedient as possible. I do apologise to my right hon. Friend the Minister; he has got a shopping list of asks from me on one clause. He probably thought it would be a little less demanding than this. I ask him to ensure that there are ongoing discussions between his Department and the Ministry of Justice about ensuring that this is implemented in an expedient way.

We need to ensure that there are stop notices for those that have put thousands of pounds into a development they are waiting for. I have constituents in similar situations who have written to me who are left out in the cold because a developer issued a stop notice that goes back and forth for months, because they have reserves of money where they can fight and fight, or it is backlogged in the courts for months. We know of the issues with backlogs in the courts in other areas. I will not test your indulgence, Mr Efford, by going down that route. I would be grateful if my right hon. Friend the Minister continued that dialogue with his colleagues across Government to ensure that the clause does not have unintended consequences that I am sure he does not want to see.

As my hon. Friend has said, I think it is very important that when these rules are contravened action is taken and that that action is appropriate. I note from the clause that, as well as a criminal offence, there is a maximum penalty of up to two years’ imprisonment. One of my concerns has always been that there are other people in this chain—be that secretaries, directors, managers and so on. I notice that we will come to that when we consider clause 39. Does he agree that putting that criminal offence in there and being clear about what is happening when that is contravened strengthens the clause even further?

I am grateful to my hon. Friend for his intervention. Dame Judith Hackitt’s review highlighted a shameful system. Putting in place a criminal offence shows that we will not and should not tolerate this shoddy behaviour any more, and nor should those individuals who have had to suffer the highest cost as a result of it. He is right in what he says in the spirit of his intervention. He listed the plethora of individuals who would be caught by this and I do not disagree that they should. People should not be able to hide behind the corporate veil and dodge liability. He is right that, in drafting the Bill, my right hon. Friend the Minister and his team have ensured that it is all-encapsulating. What we do not want to see—perhaps I am being optimistic, but I hope not—is individuals being able to dodge this.

On a point of order, Mr Efford. For clarity, are we talking to clause 37 or clause 38, which is about offences?

I am grateful for the point of order, but as far as I am concerned, the hon. Member for West Bromwich West is in order. He seems to be speaking to sections of the clause. I think you can take it as read, because I have not interrupted him, that he is in order.

I am talking to clause 37. To help the hon. Member for Weaver Vale, I am responding to the intervention by my hon. Friend the Member for Bassetlaw. He asked a specific point about the categories of people caught by clause 37, so I am just expanding on that and explaining why it is right for those individuals. I am saying, just as my right hon. Friend the Minister pointed out in his opening comments—and I am sure that the hon. Member for Weaver Vale agrees with me—exactly why those individuals should be caught by the clause.

I was in the process of winding up my comments prior to that point of order. I fully support the clause, which brings out issues that my right hon. Friend the Minister needs to address. I do not want it to result in unintended consequences and I hope that he can give me a reassurance, to take back to leaseholders who have been caught out and, more broadly, to the industry, that there will be no delays. The clause is an important development in stop notices. It will enable our regulatory framework to act quickly to prevent serious situations from occurring and, I hope, prevent other scenarios from causing issues down the line. I want to be sure of that, so I press my right hon. Friend for a guarantee that he will do whatever he can to ensure that the process operates expediently and that it will have no unintended consequences.

It is a pleasure to be back before you so quickly this week, Mr Efford. I will be brief. I want to expand on the issue of the need for culture change. Hon. Members have already raised this and the Minister himself has said that the clause is part of the cumulative weight of the Bill to achieve a culture change. That is crucial. Not only is Dame Judith correct in her assessment and desire to see change, which has led to clause 37. The lay public would be genuinely shocked, if they had no experience of these worlds, to learn that there is currently no power available to prevent non-compliant building from creating these issues.

I welcome clause 37 and I am glad that the Government are addressing the issue. bringing matters forward. However, to really achieve culture change, there need to be prosecutions. We know that we are far off that at the moment. What discussions has the Minister had with stakeholders and others on the formulation of the regulator and the creation of clause 37? There is a real appetite not only to enforce the clause and the new, strengthened powers but to drive them through to prosecutions, which are the true deterrent and which will lead to change in the industry.

I am obliged to the Committee for its deliberations on clause 37 and for the questions that have been asked of me. The hon. Member for Weaver Vale asked me two specific questions. First, will the measures in clause 37 also apply to buildings below 18 metres? The answer is yes. Perhaps I can explain further. I said that these powers are critical tools for building control authorities. The building control authority could be the Building Safety Regulator, for in-scope buildings, or local authorities, for other buildings. The Building Safety Regulator will use clause 37 for enforcement purposes on the buildings for which it is responsible, and local authorities can use the powers in the clause for buildings for which they may be responsible.

The hon. Gentleman asked me, secondly, about product compliance and kitemarking. In our witness sessions, we heard some evidence on the importance of having good product development and specification. There are clauses later in the Bill that address the question of product specifications, so we can have debates about those.

My hon. Friend the Member for West Bromwich West made a passionate speech, calling for a proper recognition that in-flight work and development have to be properly understood and recognised. He said that it is important that we do not unintentionally create bad or poor effects for players across the sector, particularly the residents of in-scope buildings. We are working with representatives across the building control system to effectively benchmark the existing regulatory capacity and to ensure that all the actors in the regime have the capabilities to abide by it and an understanding of the consequences if they do not. That is one of the reasons why we are using secondary legislation—to ensure that we are able to properly understand what it is that we need to implement in granular detail, having consulted stakeholders and taken on board comments from members of the Committee.

As I have indicated, we are also working very closely with the shadow regulator, the Health and Safety Executive and others to ensure that we transition to the new regime in such a way that we mitigate the effects of in-flight development. We do not want to endanger people in and around buildings that have been built unsafely, but to ensure that those buildings can be properly, safely and expeditiously built within the constraints of the new regulatory regime. We need to make sure that the transition is effectively executed.

My hon. Friend the Member for Stroud made the very important point that we need to ensure not only that the penalties in the Bill are understood but that prosecutions can effectively be brought. We have tried to ensure that through this and other clauses, and through discussions with officials and colleagues in the Ministry of Justice and in expert bodies, such as the HSE. That has helped us to build an approach that will ensure that there are sufficient and appropriate penalties, in an escalating manner, that the sector will understand and that can be applied successfully should they be necessary.

We want to give the Building Safety Regulator and local authorities the powers they need to do the jobs we are asking of them. With that, I commend clause 37 to the Committee.

Question put and agreed to.

Clause 37 accordingly ordered to stand part of the Bill.

Clause 38

Breach of building regulations

Question proposed, That the clause stand part of the Bill.

A breach of building regulations can have serious consequences for residents in occupied buildings We saw that four years ago in the Grenfell Tower fire and we have seen it on other occasions. The independent review found that

“where enforcement is…pursued, the penalties are so small as to be an ineffective deterrent.”

That is why, to repeat some of the points I made to my hon. Friend the Member for Stroud, the Government are committed to ensuring that where building regulations are contravened, building control authorities have the necessary powers to enforce the rules and offenders receive a proportionate penalty for their non-compliance.

Clause 38, alongside clause 37, will provide a stronger deterrent to those doing building work and, where necessary, stronger sanctions for building control authorities to use. At the moment, offenders can only receive unlimited fines for their contravention of the law. Even where directors or managers are complicit in their company’s wrongdoing, they are sheltered from the consequences, a point raised by my hon. Friend the Member for Bassetlaw.

The new custodial sentence we are introducing serves to reflect the gravity of breaching building regulations and, alongside clause 39, which we will discuss shortly, brings the threat of imprisonment to any director or manager of a company who is found to be complicit or negligent in an act of non-compliance. We intend for the higher custodial sentence to operate as an effective deterrent against negligent, reckless or dangerous behaviour.

Where previously prosecution under section 35 of the Building Act 1984 had to be brought within two years, making the offence triable in a Crown court removes the time limit altogether, enabling building control authorities to prosecute breaches of building regulations even when they come to light much later. There is no longer a two-year limit to court action.

This clause goes further and makes clear that the section 35 offence applies not only to breaches of the building regulations themselves, but to requirements imposed under building regulations, such as conditions imposed as part of building regulation approvals. The increased coverage will send a signal that no requirement under building regulations can be ignored without consequences.

As with other changes we have already discussed, this provision aims to encourage those involved in building work to do the right thing and to disincentivise substandard building work. To return briefly to a previous debate, in order to make this absolutely clear, whatever planning route a building is subject to, all relevant building work must comply with building regulation, whether it is on a higher-risk building or otherwise, and whether it benefits from permitted development rights or not. The hon. Member for Weaver Vale made that point in our previous sitting and alluded to it in his previous contribution.

In addition, the extension of the enforcement period under section 36 of the Building Act from one year to 10 years will provide another effective route through which building control authorities can enforce building regulations. This clause responds to the review’s recommendation that the sanctions available under the Building Act be enhanced to enable building control authorities to act effectively but proportionately whenever they encounter non-compliance. They will now have stronger powers to ensure that all buildings are designed and constructed in line with regulations. I commend the clause to the Committee.

We welcome the stronger sanctions, given the gravity of the consequences and the context, which the Minister referred to, of the tragic events of Grenfell over four years ago.

I, too, welcome the clause. I wish to raise a couple of points with the Minister about the defences under proposed new section 35(2) of the Building Act, relating to instances where duty holders believe wrongly that another duty holder has reported an incident. It will be

“A defence to the offence of failure to report where the person being prosecuted was not aware of the occurrence which gave rise to the requirement to report”.

I want to ensure that the scope of the defences is as tight as it can be. Clearly, there is a balance to be struck. We are fully aware that incidents happen; human failure can happen and we cannot eliminate that, so we have to take account of that within the regulatory framework, but we need to tighten the circumstances where this defence can be used. I am conscious that there is a risk that developers will see this as an opportunity to do some finger-pointing and say, “It wasn’t me. It was him,” or, “No, he missed that and I missed that.” I know that is not the intention behind the defences under clause 38, but can my right hon. Friend the Minister assure me that there will be appropriate guidance on implementation and enforcement of the provisions of clause 38, which is really important?

We have an obligation to follow through on what Dame Judith Hackitt noted in her report, particularly about the regulatory landscape. Ultimately, we do not want people who have not done right by the people we are trying to protect to find some way of getting round things. I know my right hon. Friend has worked hard to ensure that does not happen, but given that the broader point of the clause is to send out a message, particularly through custodial sentences, that breach of building regulations is serious—we are dealing with human life, as we saw with Grenfell—I want to get some reassurance from him that he will tighten that up.

I welcome the enforcement period extension. I think that is right. My right hon. Friend touched on that in his comments, so I do not need to repeat that. If he can give me those reassurances, I will be immensely grateful.

I am obliged to you, Mr Efford, and my hon. Friend, who is quite within his rights to ask for reassurances.

I reiterate that clause 38 needs to be read in conjunction with clause 37. I made it clear that the current building safety enforcement regime is not fit for purpose; there are too many gaps and loopholes. With compliance notices and stop notices, clause 37 tightens the regime. Clause 38 is designed to ensure that in the event of contravention of such notices, the enforcement powers and penalties are that much greater. If my hon. Friend reads clause 37 in conjunction with clause 38, he will see that we are doing exactly that—tightening up the loopholes from compliance and imposing stronger and more effective penalties where there are contraventions.

As I said in my opening remarks, the clause responds to the independent review’s recommendation to enhance sanctions available under the Building Act 1984, which is now some years old. We are committed to doing that and ensuring that where building regulations are contravened, building control authorities—the Building Safety Regulator or local authorities on whom the hat fits—have the necessary powers to enforce the rules and offenders receive a proportionate penalty for non-compliance.

It will be for building control authorities to act effectively but proportionately whenever they encounter non-compliance. We will come to that in more detail in further clauses. We are giving those building control authorities stronger powers to ensure that all buildings are designed and constructed in accordance with regulations, and to sanction those who do not follow those regulations. I commend the clause to the Committee.

Question put and agreed to.

Clause 38 accordingly ordered to stand part of the Bill.

Clause 39

Liability of officers of body corporate etc

Question proposed, That the clause stand part of the Bill.

I will be more succinct in respect of this clause, because it follows on from clauses 37 and 38 and I referred briefly to it earlier.

Many of the persons with responsibilities under the Building Act 1984 are and will be corporate bodies, or “legal persons”, rather than individuals, who are known as “natural persons”. Any corporate body operates only through the actions of its employees, controlled by its managers and directors. As such, if there is an offence by a corporate body, there is likely to be some measure of personal failure by those in positions of seniority.

That liability is already provided for in a number of other pieces of legislation, including, most notably, the Health and Safety at Work etc. Act 1974. The end result is that directors, managers and other such persons are just as criminally responsible as the company at which they have either made decisions directly leading to an offence being committed, or been negligent in allowing an offence to occur.

I am not a lawyer by training, although involvement in the Bill has given me some legal background—not all of it as exciting as watching “Crown Court” on television. A corporate body and the director are separate legal entities, so normally two separate prosecutions would occur. However, in practice, both prosecutions would be conducted at the same time. If there were a conviction, it would be for the court and the judge to sentence the corporate body and the individual appropriately. Although the law says that they are two separate persons, the court action would take place in conjunction and the sentencing of both entities would be as the court decided. I hope that is helpful to my hon. Friend.

My hon. Friend appears to be moving to intervene. I am conscious that I have failed to give way only once—to the hon. Member for Brentford and Isleworth—and that was by accident, so in order to keep up my almost perfect track record, I will allow my hon. Friend to intervene.

I am immensely grateful to my right hon. Friend, who is characteristically very generous. I would be interested to hear how the clause would deal with developers that dissolve, disappear or fall into difficulties as a result of this. He has been assisting me with a matter in my constituency, where a developer dissolved and left the residents in a bit of limbo, so he knows all about that.

I am not sure that the question is entirely within the scope of the clause.

In the sense that we are discussing companies, if a company has dissolved by the point of prosecution, it cannot be prosecuted. However, to address my hon. Friend’s point, that does not preclude the liability of individual company directors or managers. They can be prosecuted individually, even if the corporate identity itself has passed into history and is beyond prosecution.

The potential for criminal liability of directors and managers reinforces the duty of those who direct the actions of companies to uphold and promote building safety throughout the operations of their companies. We consider that it is a key contributor to our stated purpose of embedding building safety at all levels of industry, contributing to residents both being and feeling safe in their homes.

I thank the Minister for giving way. It is a pleasure to serve under you again, Mr Efford. I cannot see a problem with the objectives of the clause and we will not object to it, but it gives me the opportunity to ask about the issue of personal liability insurance. We are picking up that construction trade professionals in the UK are increasingly struggling to get appropriate insurance. Have the Government done an impact assessment on the issue of liability insurance and how that impacts construction professionals?

I am obliged to the hon. Lady and I can ensure her that insurance, risk assurance and personal indemnity insurance, for example, are addressed in part 3, so I suspect that we will address those issues at greater length in the not-too-distant future.

In amending the Building Act 1984 through the clause, as well as increasing the maximum penalties under that Act, we are taking a significant step in ensuring that accountability for building safety lies with those responsible. I commend the clause—

I am grateful to the Minister for being so generous with his time. My question relates to something that my hon. Friend the Member for West Bromwich West touched on during discussion of clause 37. There is a sort of cloak of corporate responsibility that people have hidden behind for far too long. It is almost like a game of pass the parcel when it comes to taking responsibility for some defects. Does my right hon. Friend agree that rather than enabling responsibility to be avoided, the clause widens the scope and makes sure we can focus minds? We will be increasing accountability rather than taking away from it.

My hon. Friend is quite right. As I said earlier, corporate liability is already provided for in other pieces of legislation—the Health and Safety at Work etc. Act 1974, for example. By embedding this clause in the Bill we remind corporate players—directors, managers and other appropriate senior parties in businesses—of their responsibility, and that their businesses and they themselves can be prosecuted if the standard of work or the actions that they undertake fall below the standards required in the Bill, which then allows for criminal prosecution.

The clause will further engender and embed the culture change that we all desire, so that at some point in the not-too-distant future these sorts of court actions will become a thing of the past, because all players act in a responsible way to ensure that buildings are designed, built and managed safely. I commend the clause to the Committee.

I thank the Minister and other members of the Committee for their contributions. The clause responds directly to the Grenfell residents’ voices, which is most welcome. We had a situation where developers, subcontractors and the Royal Borough of Kensington and Chelsea put in inferior products and cladding, despite the recommendations for that building. We have seen that sort of thing littered throughout the industry, as people have said. The clause will act as a very effective deterrent, drive the culture change that we have spoken about, and apply the tragic lessons learned in recent years.

I am obliged to my hon. Friends the Members for West Bromwich West and for Bassetlaw for their contributions, and to the hon. Member for Weaver Vale for his recognition that once again the tragedy of Grenfell has opened our eyes to issues in the sector, the loopholes in compliance, and the paucity of penalties, which we are now collectively attempting to rectify. By agreeing to the clause we are taking a significant step in ensuring that accountability for building safety lies with those who are responsible for it—individuals, corporate bodies, or the individuals in senior positions who make up those corporate bodies. I commend the clause to the Committee.

Question put and agreed to.

Clause 39 accordingly ordered to stand part of the Bill.

We now come to clause 30—[Interruption.] I am sorry; we now come to clause 40.

Clause 40

Revocation etc of certain provision made under section 2(2) of ECA 1972

Question proposed, That the clause stand part of the Bill.

I would be happy enough to speak to clause 30 again, Mr Efford, although I am not sure that that is the desire of the Committee. My eloquence and possibly my effluence covered all bases.

Clause 40 makes a technical but necessary provision to enable the revocation of out-of-date provisions in building regulations made under the European Communities Act 1972 as we modernise the regulations in years to come. Although the major part of the building regulations was made using powers in the Building Act 1984, a few provisions were made using the powers in the European Communities Act. That Act has now of course been repealed, so those powers are no longer available, meaning that at present the provisions made under the Act cannot be amended or revoked.

The building regulations will need to be updated in the light of the changes being made in the Bill. As part of that exercise, we will be looking to consolidate the significant number of amendments made to the regulations in recent years, to make the regulations easier to use for industry and building control bodies. We will need to be able to revoke the existing regulations and replace them with new ones, and without the powers provided by clause 40 we would be in an anomalous position, in that building regulations made under the European Communities Act could not be revoked, so we would not be able to undertake a comprehensive updating and consolidation.

Clause 40 works by treating building regulations made using powers in both the Building Act 1984 and section 2(2) of the European Communities Act as a “combined instrument” and then provides, in subsection (2), powers for building regulations to revoke provision in a combined instrument. Clause 40(3) disapplies paragraphs 13 and 14 of schedule 8 to the European Union (Withdrawal) Act 2018 in respect of any regulations that amend provision in a combined instrument. This will mean that any such regulations will be made, like building regulations, under the negative resolution procedure. Subsections (1) and (2) of this clause also apply to Wales. Paragraphs 13 and 14 of schedule 8 to the 2018 Act do not apply to statutory instruments made by the Welsh Ministers, so subsection (3) does not apply to Wales.

Clause 40 is needed to allow us to make changes to building regulations, so that we can update and improve legislation. It is a very technical clause.

Revoking anything can lead to fears of an inadvertent reduction in standards. Is my right hon. Friend satisfied that the clause and the work behind it will achieve exactly the opposite?

This is no back-door attempt to reduce standards now or to introduce poorer standards in the future. It is simply a necessary technical means of allowing standards to be introduced by overriding a now defunct Act; otherwise, we would not be able to repeal or change standards and regulations relating to it. For example, our future homes standard and, indeed, the future buildings standard go way beyond anything that was required of us when we were a member of the European Union or that is required of us under the European Communities Act. I assure the Committee that this is a technical change—a necessary legal and technical change—and not an attempt to reduce standards by subterfuge. With that, I commend the clause to the Committee.

I thank the Minister and other Members who have made contributions. As the Minister said, this is a technical but necessary clause. He referred to the future homes and future buildings standards, and I would like to explore the interplay between the Building Safety Regulator and those up-and-coming standards.

The future homes standard, which we will consult on and will legislate on in 2023-24 to introduce in 2025, will require all buildings built from that point to be at least 75% more carbon efficient than buildings built under present regulations. Importantly, they will also be zero carbon rated, so they will not need to be retrofitted as we change the electricity grid. Those regulations will be in force from that point—clearly, they are not law yet—and all regulators will need to have regard to them and will need to issue appropriate guidance once those changes are enacted in law, so that local authorities, the Building Safety Regulator and product manufacturers understand what needs to be embedded in product creation and the design and management of buildings, subject to the law as it stands.

I will conclude—unless anybody else wishes to intervene; I do not think they do—by saying that this is a very technical clause that is very necessary to ensure that we have a regulation landscape that we can properly manage. I commend it to the Committee.

Question put and agreed to.

Clause 40 accordingly ordered to stand part of the Bill.

Clause 41

Regulation of building control profession

I beg to move amendment 18, in clause 41, page 50, line 24, at end insert—

“(7) Section 91B of this Act (cooperation and sharing of information between Welsh Ministers and other authorities) applies as if references to the Welsh Ministers included references to a person to whom the Welsh Ministers have delegated functions under this section.”

This amendment provides that section 91B of the Building Act 1984 (inserted by Schedule 5 to the Bill) applies in relation to a person to whom functions are delegated under section 58Y as it applies in relation to the Welsh Ministers.

This group of amendments deals with duties to co-operate and information-sharing powers between Welsh Ministers, fire and rescue authorities, local authorities and fire inspectors. Schedule 3, which we debated and disposed of on Tuesday, already contains very similar provisions for England. To reiterate, that schedule creates statutory information-sharing gateways and duties to co-operate between the Building Safety Regulator and other relevant public bodies. Furthermore, it allows local authorities and fire and rescue authorities to share information about building safety and standards and issues across all buildings, including buildings outside of the higher-risk regime regulated by the Building Safety Inspector.

Amendment 29 places duties to co-operate on Welsh Ministers and creates information-sharing powers for them, enabling them to work with other Welsh statutory bodies—fire and rescue authorities, fire inspectors, and local authorities. Sharing of information and co-operation are key elements in delivering the improvements that the Bill proposes. For Welsh Ministers, those duties and powers relate to their functions under part 2A of the Building Act 1984. Amendment 18 addresses the need for Welsh Ministers’ duty to co-operate and power to share information to be cascaded down where their functions in respect of building inspectors and/or building control approvers are delegated.

Amendment 25 removes the limitation on co-operation and information sharing between Welsh fire and rescue authorities, local authorities and fire inspectors, so that it is no longer restricted to higher-risk buildings only. Those bodies will work together across the whole range of buildings in Wales.

Amendments 24, 28 and 31 clarify that the duties to co-operate and powers to share information apply to Welsh fire and rescue authorities, as defined by amendment 33, and fire inspectors, defined by amendment 30. Amendment 34 mirrors clause 26, which we have already discussed and voted on. It confirms that information sharing under this provision must comply with the data protection legislation, so that people’s privacy rights are overridden only in certain specific circumstances. Amendments 23, 26, 27 and 32 make the consequential changes necessitated by the substantive amendments.

I am sure that Committee Members have followed all those amendments very closely, and I commend them to the Committee.

Again, these are very technical but necessary amendments, which ultimately simplify and unify building control legislation, processes and procedures, and enforcement.

I am grateful for the hon. Gentleman’s support. I commend the amendment to the Committee.

Government amendment 18 agreed to. 

Question proposed, That the clause, as amended, stand part of the Bill.

Dame Judith’s independent review raised serious concerns over the lack of a level playing field for approved inspectors and local authority building control. There were different statutory and non-statutory processes leading to incoherence, confusion and complexity in the system.

Clause 41 establishes a new registration and oversight regime to provide consistency across the public and private sector, and creates a new, unified building control profession. The new registration regime will raise standards in the sector and enhance public confidence by requiring a minimum level of demonstrated competence to provide building control services on different types of buildings. For the first time, individual building control professionals, whether in the public or private sector, will have to register with a regulatory authority. That is the Building Safety Regulator in England and the Welsh Ministers in Wales.

We intend for the registration process to involve the demonstration of competence against a shared framework. Registered professionals, who will be called “registered building inspectors”, will need to adhere to a common code of conduct. We will now be able to hold individuals accountable for professional misconduct or incompetence. That is the foundation for clause 43, in which we set out certain activities and functions that building control bodies can carry out only by using a registered inspector.

Together, these clauses will change the way building inspectors work with and for building control bodies, giving the consumer greater assurance that an experienced professional will be checking their building against regulations. We are introducing an updated registration regime for private sector building control bodies, currently known as approved inspectors. They will have to register with the regulatory authority to work as a registered building control approver and will be held to professional conduct rules. We are introducing sanctions and offences for misconduct to ensure that those organisations that supervise building works are held to high professional standards.

Clause 41 also allows the regulatory authority to delegate those registration functions to another body. We are introducing a new framework for the oversight of the performance of building control bodies, levelling the playing field for local authority building control and registered building control approvers. The regulatory authority will be able to set the operational standards defining the minimum performance standards that building control bodies must meet. It sets out the reporting requirements that will enable the regulator to collect information to assess and analyse the performance of building control bodies and make recommendations to drive up standards. It gives the regulatory authority investigatory powers when building control bodies breach the operating standards, and a series of escalating sanctions and enforcement measures to address poor performance issues.

This is, obviously, a necessary and very technical clause, setting out a strong new regime of how we can improve competence levels and accountability in the building control sector. I wonder if he could clarify how the regulator will deal with poor performing building control bodies?

We want to make sure that such a body has the right sanctions available to it. We want to give it a robust set of powers to investigate performance and, where appropriate, impose escalating sanctions. In the most serious cases, the powers will include the cancellation of the registration of the building control approvers. It will mean potentially the effective taking over of the function of a local authority building control by appointed officers from another local authority. We want to give the regulator the tools to ensure that building control bodies are improving safety and performance, driving up standards, and that, where they themselves are not performing, there is a means by which sanctions can be applied. Clause 41 is essential to creating a more robust and competent building control sector, and I commend it to the Committee.

As the Minister says, this will raise the bar and raise the standards of building control throughout, as recommended by Dame Judith Hackitt and the review. It will do so through its process procedure and, very importantly, enforcement and deterrent. One of the concerns the Opposition raised with other clauses is the potential to have a two-track approach to building control with buildings below 18 metres. What assurances can the Minister give that that will not be the case and that standards will be raised in buildings that are below 18 metres, say, from 11 to 18 metres?

I, too, welcome clause 41 and its effect on the Building Act. I want to raise a point with my right hon. Friend the Minister around clarity. We will effectively have two bodies in England and Wales that will deal with this. In England it is the regulator itself and in Wales it is Welsh Ministers. I would be grateful if he will confirm that he will ensure that his Department will keep that discussion ongoing. The importance of the clause, as with the rest of the Bill, is to ensure consistency. We talked in previous deliberations about cross-border work. We need to ensure that the professionals who would sit within this regime have consistency and are conducting work across the English-Welsh border to ensure that we keep the market going and continue to meet those home building targets.

I agree that the Bill is long overdue. As the hon. Member for Weaver Vale pointed out, it is about raising standards and ensuring that the profession knows what is expected of it. There is a broader point to be made on communication: making sure the points contained within clause 41 are communicated clearly, not just within the profession but more broadly. We have talked about how the impacts of making these regulatory and standards changes need to be communicated with the sector and with training providers, but they need to be communicated with the industry more broadly. If that is not done, we might have a situation in which people enter the industry without necessarily being clear about where they need to be. I would therefore ask the Minister to be sure that his Department continues to engage.

Considering the issues, the measure is long overdue. It is common sense and something that any other regulated profession would do. There is detail about the power to have investigations, and again we need to ensure that that system works and that the regulator is in place for that, in particular for proposed new section 58H—that system must flow properly. Sanctions, too, must be proportionate. The clause is a significant one, so I will not go into every single element of it, but will the Minister ensure that its implementation is reviewed and that we continue the discourse on it, notably on proposed new section 58I on sanctions for professional misconduct?

The regulator must ensure that it continues those discussions of what is appropriate. As we have touched on in other deliberations, circumstances change and things develop. I reiterate that to the Minister, and I ask him to ensure that his Department continues those communications, that the expectations of the industry are communicated and that under the mandate of clause 41 the regulator continues its conversations with Welsh Ministers, so that we can have consistency—that will be key, given its cross-border nature. We must ensure that the clause is implemented so it is how we want to see it work. I am sure he will, but I will be grateful for his reassurances.

I am happy to give those reassurances to my hon. Friend. We will need to take care as we plan the transition to the new regime. I assure him that in our discussions with Ministers in Wales, with other Departments and with the Health and Safety Executive we are exploring appropriate transitional arrangements to ensure that the building control sector moves smoothly and safely from one uneven playing field to a more even one, in an orderly way, as I said.

The hon. Member for Weaver Vale asked about the new registration regime. In the clause, we are attempting to create the oversight and the regime that will provide consistency across the public and private sectors, creating a new unified building control profession for all buildings in the sector. The new regime will not only raise standards in the sector, but enhance public confidence by requiring a minimum level of demonstrated competence to provide building control services on different types of buildings. One can imagine that with a high-rise, higher-risk building, the competence levels that the Building Safety Regulator requires could be higher than or different from those for other buildings. We might come to that in later clauses.

In the meantime, I hope that the Committee will agree that the clause is vital to create a more robust and competent building control sector. I commend it—

Brentford and Isleworth, to be precise, but I thank the Minister for being so generous in allowing my intervention. The submission from the Local Authority Building Control group welcomed this aspect of the legislation and the clause. It expressed one concern, which I am raising as a question, about CICAIR—Construction Industry Council Approved Inspectors Register—which is designated by the Secretary of State to register and provide the oversight of approved inspectors. Has the Minister taken on board its recommendation that immediate action is taken to strengthen the audit process of CICAIR to include the requirement for external independent technical auditing in advance of the Bill being enacted? It wants to do that in order to improve current performance and standards.

I am happy to work with CICAIR. We work with it to ensure that, for example, registration fees are proportionate. We will set out more details of that later. Fundamentally, we want to ensure that the registration and regulatory oversight process is sensible. I am happy to have further discussions with it and my officials about any appropriate audit trail. I am sure that the Building Safety Regulator—presently in shadow, but as it builds its approach—will also want to have those sensible discussions.

I will accept no more interventions and conclude by saying that the clause is essential to create a more robust and competent building control sector. I commend it to the Committee.

Question put and agreed to.

Clause 41, as amended, ordered to stand part of the Bill.

Before I call the Government Whip, may I say to Members that it is customary to stand in your place if you want to indicate to the Chair that you wish to speak? I am not an auctioneer. I was a London taxi driver, so I am good at spotting various gestures, but it would be helpful if you could stand in your place.

Ordered, That further consideration be now adjourned. —(Scott Mann.)

Adjourned till this day at Two o’clock.

Nationality and Borders Bill (Third sitting)

The Committee consisted of the following Members:

Chairs: † Sir Roger Gale, Siobhain McDonagh

† Anderson, Stuart (Wolverhampton South West) (Con)

† Baker, Duncan (North Norfolk) (Con)

† Blomfield, Paul (Sheffield Central) (Lab)

† Charalambous, Bambos (Enfield, Southgate) (Lab)

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

† Goodwill, Mr Robert (Scarborough and Whitby) (Con)

† Gullis, Jonathan (Stoke-on-Trent North) (Con)

† Holmes, Paul (Eastleigh) (Con)

Howell, Paul (Sedgefield) (Con)

† Lynch, Holly (Halifax) (Lab)

† McLaughlin, Anne (Glasgow North East) (SNP)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Owatemi, Taiwo (Coventry North West) (Lab)

† Pursglove, Tom (Parliamentary Under-Secretary of State for the Home Department)

† Richards, Nicola (West Bromwich East) (Con)

† Whittaker, Craig (Lord Commissioner of Her Majesty’s Treasury)

Wood, Mike (Dudley South) (Con)

Rob Page, Sarah Thatcher, Committee Clerks

† attended the Committee


The Hon. George Brandis QC, High Commissioner for Australia to the United Kingdom

Public Bill Committee

Thursday 23 September 2021


[Sir Roger Gale in the Chair]

Nationality and Borders

Good morning, ladies and gentlemen. Our first witness is unable to join us this morning. The sitting is suspended until our second witness arrives.

Sitting suspended.

Examination of Witness

The Hon. George Brandis QC gave evidence.

We shall now take evidence from the Hon. George Brandis QC, high commissioner for Australia to the United Kingdom. We have until 12.45 pm for this session. Good morning, Sir, and thank you for joining us. Could you please identify yourself for the record?

George Brandis: Good morning, Mr Chairman. Good morning, ladies and gentlemen. My name is George Brandis and I am the high commissioner for Australia to the United Kingdom.

Q108 Thank you, High Commissioner, and welcome to today’s session. I would like to ask some initial questions about the timeline of the borders policy in Australia, or what became Operation Sovereign Borders. What the Bill before us tries to achieve happened in Australia over a period of time, so I would like to establish the timelines.

George Brandis: Yes, I can tell you that. Operation Sovereign Borders was a policy introduced by the Government of Mr Tony Abbott, which was elected in September 2013, and administered under the leadership of the then Minister for Immigration and Border Protection, now the Prime Minister, Scott Morrison.

Perhaps it would be helpful if I gave the Committee a little context. The purpose of Operation Sovereign Borders was to address a problem that had grown increasingly acute in the previous years: the arrival or attempted arrival by boat—almost always ramshackle, small, unsafe boats—across the seas, particularly the Timor sea, to the north-west of Australia, of irregular maritime arrivals. In the years prior to Operation Sovereign Borders coming into effect, there had been more than 50,000 illegal arrivals to the north-western coast of Western Australia in 827 vessels. That is the number of people we know about who made the journey.

We also know that a large number of people who attempted to make that journey drowned. There will never be a reliable figure for what that number was, because we simply do not know how many there were, but because we have counted, sadly, from the corpses, we know of 1,204 people who drowned. Whether the actual number was a multiple of that, or many hundreds more, it is impossible to tell, but certainly more than 1,200 people drowned.

Operation Sovereign Borders was introduced to address that dreadful problem. The implementation phase lasted approximately nine months, during which the flow continued. However, as the policy began to take effect and be effective, that flow dwindled to a point where some nine months later, by July 2014, it had ceased completely. Since then, there has not been a single irregular maritime arrival on Australia’s shores, as far as we can tell.

Q You said that these boats were coming to the north-western part of Australia. Where were they coming from?

George Brandis: Primarily the southern shores of Indonesia.

Q How far is Indonesia from the north-western shore of Australia?

George Brandis: It is a great distance. I cannot give you the exact figure, but it is certainly more than 1,000 km.

Q Other aspects of the immigration policy before Operation Sovereign Borders were offshoring and detention accommodation. Do you recall when those were introduced?

George Brandis: They were part of Operation Sovereign Borders. There were three elements to Operation Sovereign Borders: disruption and deterrence activities; turnarounds, where it was safe to turn the vessels around; and offshore processing. I will speak briefly to each of those elements.

With the co-operation of the Indonesian authorities, the people smugglers’ activities were disrupted at the points of embarkation on the southern shores of Indonesia, so it became more difficult for them to publicise and assemble the clientele to embark on these unsafe vessels. Generally, they were run-down fishing vessels.

The turnaround operation, which was conducted in international waters, repelled the vessels and returned them to the Indonesian shore, where it was safe to do so.

Regional processing, through a series of agreements that Australia made with Nauru and New Guinea in particular, meant that people who were not turned around and were taken onboard Australian vessels—they were rescued, in effect, because they could not be safely turned around—were processed offshore in countries where they were not at risk.

It is important to stress that Australia’s obligations under the 1951 refugee convention were complied with at all times, for several reasons. First, Indonesia in particular was a transit country for these people—none of them claimed to have been persecuted by the Indonesian Government. Secondly, the countries to which they were sent for regional processing were safe countries, where they were not exposed to the perils against which the refugee convention protects. Lastly, Australia observed its non-refoulement obligations at all times.

Q In relation to the offshoring in Papua New Guinea, is it correct to say that Papua New Guinea declared the transfers illegal, so offshoring had to stop because of the decision made there?

George Brandis: There was litigation in New Guinea about the agreement between their Government and the Australian Government in relation to a particular processing centre on the New Guinea mainland. It is not my understanding that that affected the other processing centre within New Guinea, on Manus Island.

Q But there was a class action brought by people from Manus Island in relation to the way they were treated. Do you recall the outcome of that?

George Brandis: I am not in a position to speak in relation to that, but I make the point that that is entirely a matter for the Government of New Guinea. From an Australian point of view, the legal and constitutional validity of the offshore processing arrangements were challenged in the High Court of Australia, which in the Australian system is the equivalent of your Supreme Court. The High Court ruled that under the regional processing agreements that existed between Nauru and Australia, and between New Guinea and Australia, the regional processing centres were not Australian centres; they were in no respect under the jurisdiction of the Commonwealth of Australia. They were centres operated by the Governments of Nauru and New Guinea respectively.

Q But was that not part of the reason why Australia was reported to the International Criminal Court for processing in Nauru and New Guinea?

George Brandis: I do not think that is correct. I think it would be correct to say that there was a complaint made by people who disagree with the policy to the United Nations Human Rights Council.

Q Do you have any figures on the cost of offshoring?

George Brandis: I do not have those figures in front of me. Under the regional processing agreements that Australia entered into with Nauru and New Guinea, the establishment of those centres, which required capital works and so on, was contributed to by Australia.

Q Thank you for giving up your time this morning, Mr Brandis. On the capacity of the offshore centres, am I right to say that it would be in the region of around 3,000 offshore places in total?

George Brandis: There were always more in Nauru than in New Guinea. Whether at the maximum point they reached as many as 3,000, I am not sure, but I would not be surprised if it was roughly that figure.

Q Is it fair to say that there was a challenge within a few months that these places were essentially taken up pretty quickly and capacity was reached?

George Brandis: What happened, as I indicated in the timeline I outlined at the start of my evidence, is that from the introduction of the policy, beginning in September 2013, there was a period during which the effectiveness of the policy was tested by people smugglers. The numbers of people seeking to enter Australia in an irregular fashion continued and then dwindled to nothing by July 2014. Again, I do not have the figures in front of me, but I think it is generally true to say that in the early days of the policy the numbers were greater, obviously, than in subsequent years when the efficacy of the policy was established.

I wonder, Mr McDonald, whether I may make a broader point about this, because I know that this country is seeking to address a problem that has some resemblances but also important differences. The people who put these individuals, groups and families on boats were criminal gangs. People smuggling and people trafficking is a variety of organised crime. Organised crime is a business and, like every other business, it depends upon cash flow. The most important thing that Australia was able to do was drive the people smugglers out of business by depriving them of a product to sell and destroying their cash flow.

Q We all want to see that happen, but we have different views about how we can do it and the other implications of various policies. Madeline Gleeson, for example, and others suggest that the offshoring itself achieved very little for the first year or two after it was introduced. Numbers did not decline at all; in fact, they soared for a while. What actually achieved the reduction in the number of boats arriving in Australia was the pushback policy. Would it be fair to say that it was this that delivered success, rather than the offshoring?

George Brandis: I respectfully disagree with you, Sir, and I say that having been both a member of the National Security Committee of Cabinet throughout that time and, in fact, the Attorney General who wrote the legal advice on the basis of which the policy was founded. With respect, it was not the Australian experience, and it would be artificial and wrong, to isolate one of those three elements—disruption and deterrence activities, pushbacks and offshore processing—as being more effective than the others. Rather, it is the case that they were a suite of policies that, operating together, had the effect of driving the people smugglers out of business.

Q But when was the last time anyone was sent to an offshore processing centre? Is it not years ago?

George Brandis: Let me get that information for you—I cannot give you a date. It is certainly the case that, from the early days, the need for offshore processing significantly dwindled because of the efficacy of the policy.

Q But is that not more because it costs billions of dollars and subjects people to what many regard to be cruel and inhuman treatment?

George Brandis: Sir, I am not going to engage in rhetoric. The fact is that most Australians took the view, as did the Government and the Opposition, that the inhumanity was in letting thousands of people drown.

Q Nobody wants to see thousands of people drown. What we are challenging is whether or not the policy of offshoring people in particular conditions had anything to do with that, as opposed to the boat pushbacks. In relation to the pushbacks—

George Brandis: Sorry to interrupt, but if I have not made this clear already, it is absolutely not the case that one element of this policy was the effective element, and another element was not effective. The policy was a policy suite in which all three elements mattered.

Q You have mentioned that a certain number of boats could not be turned back, because it would not have been safe to push them back. One of several issues with the pushback policy here is that we are talking about small dinghies, and that lives would be put at risk by attempting to push them back. There is nothing in the Australian policy that would have seen Australian vessels putting lives in danger by attempting to push back small dinghies, for example.

George Brandis: No, but because the distances involved are so different. Embarkations from the southern shores of Indonesia, across the Timor sea, were not in dinghies; they were largely in dilapidated wooden fishing boats.

Q Welcome, Your Excellency. You said that in 2014 your policies had successfully stemmed the flow of illegal migrants. In September 2015 you announced that you would take 12,000 Syrians and Iraqis into Australia. Do you feel that you would have been in a position to do that, and had the capacity to do that, had you not stemmed the flow of illegal migrants into your country?

George Brandis: I remember that decision very well; it was an NSC decision and I remember the debate as if it were yesterday. I am very proud that Australia did that. Sir, let me answer your question in this way. What we have found in Australia—this is both the view of those who have studied the issue and empirically verified by many public opinion surveys—is that there is a very direct correlation between the public’s willingness to accept a big immigration programme, with a big humanitarian and refugee element, and public confidence that the Government are in control of the borders. When the public have that confidence, they back a big immigration programme. When that confidence is eroded, they are less enthusiastic about it.

That sentiment was captured by former Prime Minister Howard in words that became almost a mantra in Australian politics of the day. He said in 2004, “We will always fulfil our humanitarian obligations, but we will decide who comes into this country and the circumstances in which they come.” Australia is a big immigration nation. To give some figures, in the year in which the Syrian refugee programme was at its most ambitious, 2016-17, Australia accepted 21,968 refugees under our various humanitarian programmes. We also accepted, under our other immigration programmes—skilled migration; family reunions—183,608 people. More than 200,000 people came that year, of whom about 10% came under humanitarian and refugee programmes.

The numbers have gone up and down a bit. That was the biggest year because of the Syrian element, which was an additional element to the normal humanitarian and refugee programme. In the most recent year, 2019-20, we accepted 140,366 people—13,171 people under our humanitarian and refugee programme. The numbers over the last several years have fluctuated between more than 13,000 and almost 22,000 per year under our humanitarian and refugee programme. In most of those years that is per capita the most generous humanitarian and refugee programme in the world, second only to Canada.

Q Thank you, High Commissioner, for taking the time to join us. To follow up on my colleague’s question about cost, I was looking through some figures from your Department of Home Affairs that suggested that the cost of the offshore programme was about $1 billion a year. Does that figure seem about right? Individually, the cost is just over $9,000 per day for every person held offshore.

George Brandis: I do not have the figures in front of me. I am not suggesting that it was not a programme that cost money to implement and administer. It was implemented and administered by foreign Governments: the Governments of Nauru and New Guinea. Nevertheless, a substantial proportion of the funding came from Australia. I am not disputing the figure that you give; you have done the research, sir. I do not have the financial figures, but may I take that question on notice and get them to you?

Q Certainly, that would be very helpful, but does that sort of ballpark seem about right? You are saying that it is an expensive programme.

George Brandis: Please do not take from my silence that I am averring that it is right. Certainly, there was a not insignificant cost. I do not dispute that.

Q On a different point, is it correct to say that you have not offshored anybody since 2014?

George Brandis: No, I do not think that is right. I have a disaggregated year-by-year figure on the offshoring. It certainly is right, as I said to your colleague before, that it was a front-end-loaded sort of policy, in the sense that once the people smugglers’ business had been destroyed and the boats stopped coming, the need for that leg of the policy diminished. But as for the date at which the last of the offshoring was undertaken, I am not in a position to tell you, other than to say that it was in the early part of the policy.

Q I took that from a report by the University of New South Wales. The same report said that of the 4,180 people offshored during that peak period between 2012 and 2014, almost half had returned to Australia by 2021. Do you recognise that?

George Brandis: No, I do not.

Q So the university is wrong in that?

George Brandis: I am not aware of the report to which you refer. I mean, let’s not beat around the bush here—this was a very controversial policy at the time. It became less controversial with the passage of time, for two reasons. One was that it worked. Secondly, the Opposition changed their position from opposition to the policy to support for it. However, a number of community organisations, universities and various institutions and faculties within universities continued to criticise the policies, which they are perfectly at liberty to do, and a lot of figures were thrown around. I am not familiar with the particular report to which you refer and therefore I cannot verify the data quoted within it.

Q Okay. I understand that; we are throwing all sorts of stuff at you. But it was a report published last month by the Kaldor Centre—

George Brandis: The Kaldor Centre—


George Brandis: The Kaldor Centre is a centre established as an advocacy centre and a research centre to advance the interests of refugees, and it takes a particular point of view. I am not deprecating its statistical or academic rigour at all; I am merely pointing out that it approaches this debate with a particular advocacy point in mind.

I am sorry. I said that had to be the last question. I have to try and get everybody in and there are a lot of Members. Minister.

Q Thank you, Sir Roger. I will be quick, so hopefully the hon. Member might get another go.

Your Excellency, looking back in the Australian context, is it reasonable to think, that if you had stood back and done nothing about this challenge the numbers of people crossing or seeking to cross would have increased, and on less seaworthy vessels?

George Brandis: I think that is an absolutely fair inference to draw, because in the years prior to the introduction of the policy, which was in September 2013, the numbers had escalated, so every year there were more than in the previous year. It almost inevitably follows, given that nothing else would have changed, that the number of those vessels that did not make it and the number of passengers who drowned would have escalated, too.

Q How fundamental do you think that offshore processing was in acting as an effective deterrent as part of your wider plan to tackle this challenge?

George Brandis: Well, as I have already said in my evidence, there were three legs, or three elements, to this policy and all of them were essential to it. I do not think you can disaggregate one from another.

Q I am interested in wider criminality. What impacts did you assess there to be in the line of finance that these crossings were generating for these criminal gangs? What impact did that have on wider criminality? Was it fuelling other types of criminality in Australia?

George Brandis: It is very difficult to answer that question in a general way. The people-smuggling gangs who were the authors and beneficiaries of this activity were located in Indonesia, primarily. That is not to say that they may not have had connections in Australia, but they were primarily groups that operated within Indonesia, and there were many of them. I am not in a position to generalise from that proposition to what extent they had connections in other countries, including Australia.

Q Trying to create a swifter, more efficient, more streamlined processing of applications is fundamental to the plan the Government here are seeking to advance. Was that an element of the work you put in place in Australia, and how important do you think it is, both in acting as a deterrent and having a system that is much more humane and treats people fairly?

George Brandis: As is evident from the statistics I quoted before, we accept an unusually large number of humanitarian and refugee immigration applications for a country of our size. We have an ambitious humanitarian and refugee programme, and we seek to process those applications swiftly and efficiently, but we do say, “You’ve got to come in the front door, and not put yourself in the hands of criminals and put yourself and your children at risk of drowning.”

Q Finally, looking back at your experience, the establishment of the policy framework and everything that underpinned it more generally, what in your assessment were the key challenges you faced in delivering on this, and what lessons could the British Government learn from that experience in the work we are doing?

George Brandis: There were logistical challenges, particularly the turn-back operations. It was very challenging for the maritime authorities to do that while at the same time ensuring that nobody’s safety was put at risk. That was one dimension to this, but it is a bit of a different problem because, as one of your colleagues pointed out, here these people come by dinghy. Almost all the people who were trying to come to Australia were coming in decrepit old timber fishing boats, which were much more fragile. That was the difference.

I am not here to instruct or encourage your Parliament on the right policy choice; I am merely here to respond to the questions you have asked me about how a particular set of measures worked for Australia. I have already observed that there are differences as well as similarities in the profile of the problems. However, I would say that undoubtedly the key to this is to put the people smugglers out of business. The way to put the people smugglers out of business is to demonstrate to their potential clientele that they are wasting their money. The way we did that in Australia, and it was a robust policy, was to persuade the potential clientele that, if they came in through the front door as genuine refugees, they would be embraced; but, if they put themselves in the hands of people smugglers, there was no way they would ever end up in Australia.

Q Thank you, Your Excellency, for being with us today. How were the offshore countries selected to be the base for processing, and what work was done with their Governments before opening those centres?

George Brandis: A lot of work was done with the Governments. I was not directly involved in that work, so I am not in a position to speak with particularity in answer to your question, sir, but they were countries in our region that were willing to enter into regional processing agreements with Australia.

Q And there were no asylum claims from either of those countries to Australia before they were selected as sites?

George Brandis: I am not aware that there were any from either New Guinea or Nauru. Those two countries were never a locus or genesis of the problem.

Order. I am sorry, and I must apologise to colleagues who have not been called, but it is a time-limited session—that is what the Committee voted for—and I have to draw it to a close. Commissioner, the Committee is deeply indebted to you; thank you very much for coming in.

Ordered, That further consideration be now adjourned. —(Craig Whittaker.)

Adjourned till this day at Two o’clock.

Health and Care Bill (Eleventh sitting)

The Committee consisted of the following Members:

Chairs: Mr Peter Bone, Julie Elliott, Steve McCabe, † Mrs Sheryll Murray

† Argar, Edward (Minister for Health)

† Bhatti, Saqib (Meriden) (Con)

† Crosbie, Virginia (Ynys Môn) (Con)

† Davies, Gareth (Grantham and Stamford) (Con)

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

† Double, Steve (St Austell and Newquay) (Con)

Foy, Mary Kelly (City of Durham) (Lab)

† Gideon, Jo (Stoke-on-Trent Central) (Con)

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

† Norris, Alex (Nottingham North) (Lab/Co-op)

† Owen, Sarah (Luton North) (Lab)

† Robinson, Mary (Cheadle) (Con)

† Skidmore, Chris (Kingswood) (Con)

† Smyth, Karin (Bristol South) (Lab)

Timpson, Edward (Eddisbury) (Con)

Whitford, Dr Philippa (Central Ayrshire) (SNP)

Williams, Hywel (Arfon) (PC)

Huw Yardley, Sarah Ioannou, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 23 September 2021


[Mrs Sheryll Murray in the Chair]

Health and Care Bill

Clause 51

Licensing of NHS foundation trusts

Question proposed, That the clause stand part of the Bill.

It is a pleasure to serve under your chairmanship once again, Mrs Murray. With your indulgence, I will speak to each of the clauses in turn.

Clause 51 amends section 88 of the Health and Social Care Act 2012. Section 88 requires that Monitor—or, in future, NHS England—treats an NHS trust that has become an NHS foundation trust as having made an application and met the criteria for a licence. The clause will require NHS England to apply that provision when that queue of NHS trusts waiting to become foundation trusts do so—[Laughter.] I hope the Committee will forgive my gentle reference to what the shadow Minister said last time. On a more serious note, the clause will also require NHS England to apply it when a foundation trust is created as a result of the merger of an existing foundation trust with an NHS trust or another foundation trust, or the separation of one foundation trust into two or more new foundation trusts.

Clause 51 clarifies the situation when new foundation trusts are created, merged or separated and ensures there is no unnecessary bureaucracy as a result. It is an important clarification for NHS England on how to exercise its licensing powers in such situations, should they arise.

We are investing record levels of capital expenditure into the NHS to help it build back better after the pandemic. We intend to set capital expenditure budgets at integrated care board level, and we expect providers to work with ICB partners to agree capital expenditure, in line with the ICB capital plan. To ensure that the interests of the wider system are taken into account at individual provider level, clause 52 provides a new power to allow NHS England to make an order imposing capital expenditure limits for NHS foundation trusts.

That narrow and reserved power will ensure that a limit can be set only for an individually named foundation trust for a specified period, and would automatically cease at the end of that period. The power relates solely to capital expenditure and not to revenue expenditure. NHS England must also consult the foundation trust before making the order. There will be clear transparency, as the order will be published.

In applying to an individual foundation trust in particular circumstances, the power stands in contrast to the capital limits that apply to all NHS trusts. The power is likely to be used where there is a clear risk of an ICB breaching its system capital envelope as a result of non-co-operation by that foundation trust, and when other ways of resolution have been unsuccessful.

NHS England must set out in guidance the circumstances in which it is likely to set a capital limit and how it will calculate it. NHS England intends to work closely with foundation trusts to develop that guidance. I want to make it clear to the Committee that the clauses are not intended in any way as an erosion of the autonomy enjoyed by foundation trusts. Unlike NHS trusts, foundation trusts will continue to have additional financial freedoms, such as the ability to borrow money from commercial lenders. However, the clause is crucial for managing NHS capital expenditure across a system and to ensure that all NHS providers operate within the ICB capital limits. Without that control, other NHS providers may have to reduce their capital spending to ensure that the NHS lives within its allotted capital resources and that resources are spent in a way that best delivers for patients and the taxpayer.

The provisions in clause 53 are largely a consequence of the merger of NHS England and Monitor, in this case reflecting Monitor’s oversight role in relation to foundation trusts. Subsection (1) gives foundation trusts greater flexibility in their forward plans. Paragraph (a) removes requirements currently in the National Health Service Act 2006 concerning the content of the forward plan. Paragraph (b) removes the requirements for the forward plan to be prepared by the foundation trust’s directors and for the directors to have regard to the views of the foundation trust’s governors when preparing the forward plan.

Foundation trusts will no longer be mandated to set out information in the forward planning documentation around non-health service activity and income. The clause also removes the requirement for governors to be mandated to determine whether the foundation trust’s forward plan interferes with the trust’s health service activity.

As the Committee will know by now, and as a consequence of the abolition of Monitor and its merger with NHS England, NHS England will formally become responsible for the support and oversight of foundation trusts, which includes taking on Monitor’s regulatory and intervention powers. That change will enable improved oversight and greater flexibility across the system. Provisions elsewhere in the Bill make the detailed changes, including formally giving NHS England responsibility for giving directions in relation to the content and form of foundation trust accounts. That includes specifying information to be included in the annual reports and accounts of foundation trusts.

The clause is simply part of transitioning the provider-based functions of Monitor into NHS England, ensuring continuity of oversight of foundation trusts’ accounting and forward planning. NHS England will be able to provide fundamental advice and guidance to foundation trusts in the exercise of their functions. Provisions elsewhere in the Bill will formally allow NHS England to monitor the performance of foundation trusts and to take steps to intervene where necessary, which may take the form of advice and support. As we discussed on a previous occasion, however, it may also involve NHS England requesting the trust to take action to remedy emerging issues. At the same time, the clause makes the requirements on annual plans more flexible, to reflect the direction of travel towards system-wide, rather than organisation-specific, planning.

I turn now to clause 54, which inserts proposed new section 47A into the National Health Service Act 2006 and allows an NHS FT to carry out its functions jointly with another person, should the foundation trust consider such arrangements to be appropriate. That would allow a foundation trust to exercise its healthcare delivery functions jointly with another foundation trust as part of a provider collaborative. The clause will make it easier for FTs to work with partners across the health system to develop integrated, seamless services in the best interests of patients.

Clause 55 amends sections 56, 56A and 56B of the 2006 Act, which relate to the merger, acquisition, separation and dissolution of NHS foundation trusts and NHS trusts. It removes the requirement that an application to acquire or merge an NHS FT with another NHS FT or an English NHS trust be supported by the Secretary of State if one of the parties is an NHS trust. NHS England will now consider each application, but the Secretary of State’s role has been strengthened, as he must now approve such applications. However, NHS England will consider the applications and provide advice. That is in keeping with the policy intention that the Secretary of State should have a strengthened accountability role for NHS foundation trusts, in the light of the transfer of Monitor and NHS Trust Development Authority functions to NHS England. NHS England replaces Monitor in the relevant sections of the NHS Act 2006.

Like Monitor, NHS England has a duty to grant the application to merge, acquire or separate if it is satisfied that the necessary steps have been taken to prepare for an acquisition or the dissolution and establishment of new trusts. Additionally, the clause adds a further requirement to each of the sections, which provides that NHS England must refuse an application if the Secretary of State does not approve it. That strengthens the role of the Secretary of State in the process, and it will be for NHS England to take note of the Secretary of State’s comments in taking forward its plans. The clause provides for enhanced oversight and places strategic decision making in the health system in the hands of NHS England, while also conferring a commensurate and important role on Ministers, in line with the direction of accountability set out in the Bill.

Clause 56 relates to the transitioning of the provider-based functions of Monitor and the NHS TDA into NHS England. That will allow NHS England to grant an application by an NHS foundation trust for dissolution. The clause confers the powers that rested with Monitor to transfer or provide for the transfer of property of an NHS foundation trust on its dissolution. Previously, on the dissolution of an NHS FT, Monitor had the power to transfer the property of the NHS FT to the Secretary of State. The clause amends that power so that, when making an order to dissolve an NHS foundation trust, NHS England now has the power to make an order to transfer, or provide for the transfer of, property and liabilities to another NHS FT, an NHS trust or the Secretary of State. The clause also includes a new duty for NHS England to include the transfer of any employees of a dissolved NHS FT in the transfer order.

Taken together, these clauses ensure that foundation trusts are able to play a central role in a more integrated and collaborative healthcare system. As part of that, the clauses also provide NHS England with the powers it will need to help support NHS FTs. I therefore commend clauses 51 to 56 to the Committee and propose that they stand part of the Bill.

It is a pleasure to see you in the Chair this morning, Mrs Murray. I am glad you enjoyed Tuesday so much that you came back for another round. We will do our best to inform and entertain as we go along.

I am grateful to the Minister for setting out the Department’s position on the clauses. We really need to have another go, don’t we, at trying to understand the landscape for foundation trusts? I have already referred the Committee to the description of foundation trusts when they were first established, as vigorous, autonomous, business-like new organisations that would shake up the NHS and bring choice and competition into healthcare. As we know, there was no evidence that that model did any better than the previous standard trusts, once the high performers had been accounted for.

The Minister’s contention that the clauses do nothing to impinge on a foundation trust’s autonomy is quite the claim. The big change in the clauses is the stripping away of financial autonomy, as set out in clause 52, directly contradicting the many occasions when we have been told that the Bill is all about permissiveness, local decision making and accountability. In clause 55, we also see the Secretary of State giving himself yet more powers.

Clause 52(2) could, in effect, mean there was an indefinite block on foundation trusts using their own capital resources. Will there be any limitations on what is a broad power? I refer to the evidence from Dr Chaand Nagpaul, who touched on that:

“At the moment, we are seeing foundation trusts thinking about their budgets, community providers thinking about theirs, and general practice as well. There is not even collaboration between the community and the hospital. No foundation trust currently has the ability to say, for example, ‘We will go beyond our budget and invest in the community—it may actually reduce our hospital admissions.’ At the moment there is no structure or processes to enable collaboration even within the NHS.”—[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 93, Q120.]

Dr Nagpaul sets out very well the lack of clarity that we still have about how finances will work at a local level within an ICB, and clause 52 gives foundation trusts even less autonomy in that respect.

On that point, I noted with interest today yet another Health Service Journal article, which talked about how integrated care partnerships may not be up and running for some time after the ICB has been set up. That raises questions about what their role is going to be in helping to form those capital priorities for an integrated care system.

In other evidence, Richard Murray said:

“The bit that I think is really uncertain is how the big hospital schemes get picked. That is the bit that looks very different. Obviously, there is a manifesto commitment.”—

although we know that, in recent times, the Government have not been so keen to follow those commitments. He continued:

“There used to be a process by which it was determined whether providers could afford to repay—if they could do it through loans, or if there was a need system. That is now going off in a completely different place, and I think that is the bit that is not quite clear. How does that work within this system? Who gets to choose how those projects get picked, so to speak?”—[Official Report, Health and Care Public Bill Committee, 9 September 2021; c. 118, Q158.]

I appreciate that the point is slightly off-piste, but as we are talking about capital expenditure it is appropriate to raise it, and I am sure the Minister will take the opportunity in his response to set out that process in more detail. At the same time, can he set out in more detail what the guidance set out in proposed new section 42C would entail? Hopefully we will be able to set out some broad points in respect of that.

While we are on the Minister’s response, will he consider the broader point we made on Tuesday about foundation trusts’ focus on involvement of patients and the public and whether that needs to be strengthened across the board? He needs to think again about the whole question of accountability on ICBs.

To go back to the essential question, are foundation trusts now any different to plain, old-school NHS trusts? Is a foundation trust now a dodo? Is it extinct or on its way out? If an ambitious young chief executive of a trust were to approach the Minister and say they were thinking of putting in an application for foundation trust status, what would the Minister say to them about the benefits of such an application, both to their trust and to the wider healthcare system?

It could be argued that there is now a negative reason to not go down that route, as foundation trusts face risks that ordinary trusts do not face. They could decide to engage in some important capital works, carefully setting aside resources for a number of years to pay for them—not forgetting that with a £9 billion maintenance backlog there will be no shortage of projects to identify—but they face the risk that all that planning and prudence could be swept aside with a stroke of the pen by NHS England. Where is the incentive for them to invest in the future? What is the appeal process? Is a decision of that nature challengeable by a foundation trust? If the Minister can help us out by answering that, I would be obliged.

On the question of licensing in clause 51, we are none the wiser as to why that is still a requirement. Now that Monitor has gone, is there any longer a need for anything resembling licensing? Why do we need this roundabout way for NHS England to tell foundation trusts what they can and cannot do? Monitor used to be able to allow licence conditions to be modified where that would lead to certain, specifically defined, desirable outcomes, such as improving the quality of healthcare. Will that be possible under the new system?

Monitor has now left this place—it is deceased, it has fallen off the mortal coil—and NHS England will be there instead. It will be able to use its power to enable co-operation between providers of healthcare services without, as far as the Bill is concerned, having any need to explain why it is requiring that. The clause also extends the remit somewhat by applying to the NHS end and forcing it to co-operate with local authorities. Now that the trappings of the market are fading away, we need to understand better what licensing is going to achieve.

In the spirit of our many suggestions to help the Minister ease his workload, why not get officials to work on a new consolidation Act for the NHS? As we have seen, there are many amendments to the 2006 Act as a result of this Bill and other pieces of legislation, and it takes time to cross-reference so many parts, so one piece of legislation would be helpful for everyone, not least overworked shadow Ministers. Maybe the time to do that is when we have the next reorganisation in approximately two years’ time, when the Prime Minister’s latest integration plans come to the fore and we see that something else has to change. In the meantime, can the Minister set out clearly the purpose and function of the licensing process? I am sure we would all be grateful to hear about that.

I am grateful to the shadow Minister for his suggestion of a consolidation Act. I can tell just how much he enjoys the sessions we spend in Committee and how eager he is that, no sooner do we finish, than we are back in another Bill Committee together. In terms of his gentle gibe about reorganisation in another two years, there was roughly a two-year gap between the 1999, then the 2001, then the 2003 and then the 2006 reorganisations of the NHS under the previous Government. I fear this is something that affects Governments of all types.

Indeed, but the point that we would make is that there was such a mess to clear up after 18 years of Conservative Government that we had to do a lot of reorganisations. If the Minister can state for the record that there will be no reorganisations within a specified timescale, we would all be delighted to hear that.

We must always retain flexibility so that the legislative framework reflects the evolving nature of healthcare provision in this country and we can we deliver what all our constituents want us to.

The hon. Gentleman touched on the importance of licensing. The licence applies to anyone providing NHS services, including the independent sector. With the system oversight framework, it provides a tool that helps to ensure quality across all types of providers in a consistent way, hence the importance that we still attach to it.

At the heart of the hon. Gentleman’s speech were his points about foundation trusts, a 2004 innovation. The reason we are introducing these changes is that we recognise not only the ability of foundation trusts to be autonomous, but the need for them to collaborate and integrate. The aim is to create a framework that allows for local flexibility but brings together local services, recognising the synergies that need to exist between all healthcare providers in an area. With the ICB holding the ring, we get local flexibility, but we look at it the local system level rather than the individual provider level. I alluded to it jokingly, but as I promised in our last session I can confirm to him that I was correct that there are no current applications from NHS trusts to become foundation trusts. I said that I was relying on my memory, but I can confirm for the record that my memory was accurate.

The hon. Gentleman talked about the new hospitals programme and capital more broadly. While slightly stretching the scope of the debate, I think that is probably relevant because he was talking about capital, so I am happy to accept that—subject to your judgment, of course, Mrs Murray—as being in scope. In terms of investment in new hospitals, the bottom line is that this is capital provided by the Treasury—by central Government —to build new hospitals where they are most needed. He will have seen the criteria and the approach set out for the next eight schemes, which are currently being considered. An expression of interest is the first stage of that process. A number of criteria are set out—for example, are there safety issues? Is there an urgent need? Will this facilitate transformation and improve patient experience? The criteria are set out publicly.

The next stage, which will take place next year, is the whittling down of the applications to a shortlist and further consideration. I believe it is entirely right that, guided by advice from officials and local NHS systems, Ministers make those decisions, because it is central Government money that is being invested directly in the schemes, rather than the normal capital allocations from NHS England to local NHS systems that are decided at local system level. This is additional, over and above the normal capital allocations.

The hon. Gentleman mentioned proposed new section 42C and asked what it is envisaged the guidance will say, what it will cover, and how it will work. Essentially, we envisage it setting out how and when NHS England and NHS Improvement will exercise the powers—for example, where a foundation trust’s plans potentially put at risk the broader ICB plans for capital, unduly divert resources, or skew the capital allocation in a particular direction. We do not envisage their being used with any regularity, and hope that, as now, broadly, there is a collaborative approach. It is more informal now than envisaged under the provisions, but there is a collaborative approach.

In his broader remarks about the balance between autonomy and freedoms, the hon. Gentleman asked what I would tell a keen and ambitious NHS trust chief executive who was considering taking advantage of the spaces in the queue to become a foundation trust the advantages in doing so are. Essentially, I would say that they should consider what best reflects the local needs for their local healthcare system, because foundation trusts will of course retain freedoms around commercial borrowing and other existing freedoms. The powers that we are introducing act as a safeguard should they be used against the wider interest of the system. There are still advantages, but each NHS chief executive in that situation should consider carefully their own local circumstances and what is most effective in providing for their patients and service users.

My two final points go to what the hon. Gentleman said about the fear that the powers are significant and should be used only as the last resort, and his second point about whether there should be a greater willingness to allow NHS providers to decide how they spend their surpluses, rather than a regulator or central Government deciding. I might be paraphrasing, but I think those were his two key concerns. On his first point, the powers act as a safeguard to allow national-level intervention when local negotiation cannot resolve disputes. I have alluded to what we would use the guidance for, which is to add a bit of flesh to the bones. We think that is best set out in guidance rather than on the face of statute, as circumstances change over time and applying a narrow statutory test could hinder the aims of the clause, which would ensure that NHS spending overall is in the best interests of the public.

To the second point about whether it should be down to NHS providers and systems to determine how they spend surpluses or moneys that they have saved each year for a particular purpose, the hon. Gentleman is right that NHS trusts and foundation trusts operate as autonomous organisations that are legally responsible for maintaining their estates and providing healthcare services. That will continue, but only where there is a clear risk of a trust acting against the wider interest of the NHS system locally and an ICB would the controls be considered for application.

The Minister is setting out the aims, but I am a little unsure what a foundation trust acting against the wider interest of the ICB would look like. Can he give us examples of where that might have happened?

The hon. Gentleman tempts me to give a specific example. The reason we chose the flexibility of using guidance is that we cannot envisage every eventuality, so we will set out in guidance the process and approach. I will try to give him an illustrative example rather than a specific one, if he will allow me. If we have an ICB making collective decisions about where capital investment is most needed at a system level, and if we have a foundation trust with resources deciding to prioritise huge investment in one particular area, that might not necessarily reflect the broadly agreed local priorities in the ICB plan and the ICP plan for that area. I envisage such matters being resolved at an ICB level. I have certainly seen in this job and in a past life, as I suspect the hon. Member for Bristol South has, where informal resolution of these things is often the most effective way, so I would not envisage these powers being used often, but it is important that we have the flexibility that they bring. On that basis, I commend the clauses to the Committee.

Question put and agreed to.

Clause 51 accordingly ordered to stand part of the Bill.

Clauses 52 to 57 ordered to stand part of the Bill.

Clause 58

Transfer schemes between trusts

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Clause 59 stand part.

Government amendments 15 and 16.

That schedule 8 be the Eighth schedule to the Bill.

As we have discussed, clauses 39 and 40 make it clear that the Secretary of State continues to have the ability to create new NHS trusts. Clause 58 is an integral part of ensuring that the NHS has the correct provider landscape necessary to deliver integrated care and to respond to emerging priorities.

The clause allows NHS England to make a transfer scheme relating to NHS trusts and NHS foundation trusts. Such a transfer scheme can provide for the transfer of property, rights, staff and liabilities from one NHS provider to another to ensure that the right resources can, when necessary, be transferred to support the delivery of services across the NHS.

NHS trusts and NHS FTs will be able to apply jointly to NHS England to make transfer schemes under the clause. NHS England, as the national regulator, may grant the application for the transfer scheme if it is satisfied that all necessary steps to prepare for the scheme have been undertaken. The process can ensure, for example, that all transfer schemes are in the best interests of patients and represent value for money for the taxpayer. Transfer schemes for NHS providers are crucial to ensuring that we have a flexible, adaptable provider landscape to deliver the best care to our patients.

Clause 59 introduces schedule 8 to the Bill, which amends chapter 5A of the National Health Service Act 2006, which relates to trust special administrators. Schedule 8 outlines the changes to the process and authorisation for the appointment of trust special administrators, including the reporting mechanisms.

A trust special administrator is appointed to take charge of the trust, at which point the trust board of directors—in the case of NHS foundation trusts, the governors—are suspended. Trust special administrators may be appointed by NHS England to exercise the functions of a chairman and directors of an NHS trust, or the governors, chairman and directors of a foundation trust, where that is necessary to secure sustainable and high-quality services and where other interventions to secure financial or clinical sustainability have been exhausted.

Schedule 8 co-outlines the changes to the process and authorisation for the appointment of trust special administrators, including the reporting mechanisms. The changes are part of transitioning the provider-based functions of Monitor and the NHS TDA into NHS England, and it does not represent a substantial change in policy approach. It also transfers delegated duties placed on the NHS TDA to NHS England in relation to the appointment of a trust special administrator to an NHS trust. It also transfers functions of Monitor to NHS England in relation to the appointment of a trust special administrator for NHS FTs.

The administrators are to be appointed by NHS England to make recommendations about actions to secure sustainable and high-quality services. NHS England must appoint a trust special administrator if required to do so by the Care Quality Commission. Otherwise, it may make the order to appoint only if it considers that to be in the interests of the health service and if the Secretary of State has given their approval.

The process remains broadly the same under schedule 8, giving NHS England the appropriate role in relation to NHS trusts and foundation trusts. However, one change I draw to the attention of the Committee is in relation to NHS trusts: both NHS England and the Secretary of State will receive the administrators’ report, which will state which action, if any, either is to take. The schedule confers a shared duty on NHS England and the Secretary of State to consult one another before taking any decision on action.

The provisions enable NHS England to discharge its responsibility for the support and oversight of NHS trusts and foundation trusts, including taking on Monitor and the NHS TDA’s regulatory and inspection powers in relation to such trusts. They provide transparency to the appointment process and its reporting mechanisms, and clarity to the system in securing and delivering sustainable and high-quality services when the trust providing them has been placed into administration. I commend the clauses and the schedule to the Committee.

Government amendment 15 will ensure that integrated care boards are consulted when the Care Quality Commission requires NHS England to make a trust special administration order and ensures that the process properly accounts for all future commissioning arrangements involving those boards. Proposed new section 65B(4)(b)(ii) introduced under paragraph 2 of schedule 8 retains the existing requirement for the Care Quality Commission to consult commissioners of services from the NHS trust in question. The commission considered that to be appropriate. However, it does not account for situations where, in future, an NHS trust may provide services in an integrated care board area without formally providing services to that integrated care board. For example, where an NHS trust ends up spanning two integrated care board areas, those boards may decide to have a lead commissioner of services from an NHS trust. The purpose of the amendment is to put beyond any doubt that any integrated care boards that might be impacted by a trust special administration order being triggered for an NHS trust should be consulted as part of the formal process.

Similarly, Government amendment 16 will ensure that integrated care boards are consulted when NHS England decides to make a trust special administration order and that the process properly accounts for all future commissioning arrangements involving ICBs. Proposed new section 65B(5)(b), introduced by paragraph 2 of schedule 8, retains the requirement for NHS England to consult commissioners of services from the NHS trust in question, if

“NHS England considers it appropriate”.

However, that again does not account for situations where, in future, an NHS trust may provide services in an ICB area without formally providing services to that ICB. For example, where an NHS trust may end up spanning two integrated care board areas, those boards may decide to have a lead commissioner of services from a trust. The purpose of the amendment is to put beyond any doubt that any integrated care boards that might be impacted by a trust special administration order being triggered for an NHS trust should be consulted as part of that formal process.

Amendments 15 and 16 ensure that the trust special administration process reflects the role the ICBs will play and the different levels of autonomy and status between different NHS trusts and foundation trusts under the present system, putting the need for calibration and consultation at the heart of the measure. For those reasons, I ask the Committee to support the amendments.

It is a pleasure to serve with you in the Chair, Mrs Murray. There is not a tremendous amount to get excited about in these clauses and amendments, but I want to ask a couple of questions of the Minister.

On clause 58, it makes sense to provide for a time where there needs to be a transfer of property, rights or liabilities from one NHS trust or foundation trust to another. Indeed, I suspect that our conversations about boundaries in earlier parts of the Bill are far from finished. That may have a knock-on impact on providers, so we may see it used in the near future. On the powers reserved for NHS England to create transfer schemes, it is not greatly surprising that it is the ultimate arbiter of applications. That is consistent with the rest of the Bill.

I could not tempt the Minister to cover one point in the final grouping on Tuesday evening, and I hope he might expand on it now. Where are the integrated care boards in this? Surely they would have a significant view about changes to the providers, and possibly the splitting up of providers—the Minister mentioned cross-border trusts, and how that might be led with lead providers. It is not inconceivable that the integrated care boards might have significant views, so should there not at least be a sense that their views have been sought? If not, there ought to be support, which would probably be desirable. In the previous grouping, we covered the fact that that was also true for trusts entering special measures and for trusts becoming foundation trusts. Again, there was no sense of what the ICB’s role was. I do not think that the Minister mentioned that in his summing up. I hope that he might do so on this occasion.

I heard what the Minister said about Government amendments 15 and 16, which I have a lot more sympathy for. I raised this issue on Tuesday night. Where the Care Quality Commission and NHS England are involved in a trust failure situation, they should of course want the ICB to be a part of that process. I believe that the point the Minister made was that amendments 15 and 16 will amend the clause sufficiently to ensure that integrated care boards have their say in situations of failure. I hope he will clarify that ICBs in any such situation will get due consultation about what comes next.

I accept the Minister’s point that clause 59 does not represent a material change in direction or policy from where we are today, but instead tidies up who is responsible and deals with new arrangements for NHS England, as set out earlier in the Bill. Again, there is not much of a reference to the ICBs. Hopefully we get clarity that the point of the amendments is to put that back in. If so, obviously we would support that, but I would wonder why that has not happened in other places—both in this group and previous ones too.

The Minister will love how granular this inquiry is. I ask it for no other reason than out of a genuine desire to know the answer; I am not trying to catch anybody out. Schedule 8 replaces section 65KD of the National Health Service Act 2006. Proposed new section 65KD mentions ICBs—I think it was about the only reference to them in the schedule, before the Government tabled amendments 15 and 16—and provides for what happens should an ICB fail to discharge its functions. In that case, under proposed new subsection (5)(b),

“the Secretary of State may exercise the functions of NHS England under section 14Z59(2), (3)(a) and (5)(a)”,

which are introduced by the Bill.

Proposed new section 14Z59 is titled:

“Power to give directions to integrated care boards”.

At that point, the Secretary of State has taken over NHS England’s role and now acts as NHS England himself or herself. Can the Minister explain why that would be necessary? If we are saying that an ICB is part of a failure of circumstances, not discharging its functions properly, would not the first port of call traditionally be the centre—NHS England—to step in and provide support, or is there a judgment that the national leadership has failed too if the local leadership has failed, and therefore the Secretary of State must be the next link in the chain?

I am conscious that that is a granular query, but I think the provision departs from principles earlier in the Bill. It may well be that this is a very specific and niche example, in which case there is less to worry about, but I would like an explanation on that, and on where ICBs are in the grand processes around clause 58. When changes happen, what consultation does there have to be with them, and what support will they have?

On the shadow Minister’s central question about where ICBs fit in, he is right that we envisage their being, as we have discussed throughout, central to decision making in their locality. He is right to highlight that, as drafted, there was the potential for them to be regarded as not front and centre, hence Government amendments 15 and 16, which we hope add clarity and add that ICBs will be consulted, for example, when a special administrator is being appointed. We wanted to include them as part of that process. I fully acknowledge that, as drafted, there was a degree of ambiguity. That is why the Government introduced the amendments. I do not like having to amend my own legislation, but I think it important that we do so here.

The Minister should not be shy about that at all. It is good sign, and shows that, after publication, he is still reflecting on the Bill and improving it as we go along. That is a strength rather than a weakness. However, these are amendments to schedule 8. I am surprised that there are no counterpart amendments for clause 58 or to the group that we discussed previously, which included clauses 39 to 42 and clauses 44 to 50. Why was the judgment made not to amend those in a similar way?

We took the view that in this case there are very obvious consequences. In normal circumstances, we envisage collaborative work with, and the involvement of, the ICB. I was very keen that we were explicit here. It could be argued, as I would have done, that the clauses did not prohibit such co-operation, but I wanted to be very specific, because the appointment of a special administrator and the actions likely to be taken in that context could have profound impacts on the system. I wanted to be absolutely explicit about the need to involve ICBs.

The hon. Gentleman asked a detailed and granular question about paragraph 15(4) of schedule 8, and the powers in proposed new subsection (5)(b). The key point is that we would envisage it going up through the chain of accountability—chain of command is wrong word—but it is important that we recognise, as we do with the Bill, that the Secretary of State has a role in that chain of accountability to the House, to the public and to others. That theme has run through a lot of the discussions of the legislation, so we therefore think it appropriate to include the Secretary of State in that subsection.

Question put and agreed to.

Clause 58 ordered to stand part of the Bill.

Clause 59 accordingly ordered to stand part of the Bill.

Schedule 8

Trust special administrators: NHS trusts and NHS foundation trusts

Amendments made: 15, in schedule 8, page 185, line 29, at end insert—

“any integrated care board in whose area the trust has hospitals, establishments or facilities, and”

(i) any integrated care board in whose area the trust has hospitals, establishments or facilities, and”

This amendment requires the Care Quality Commission to consult relevant integrated care boards before triggering the requirement for NHS England to make a trust special administration order for an NHS trust.

Amendment 16, in schedule 8, page 185, line 36, at end insert—

“(aa) any integrated care board in whose area the trust has hospitals, establishments or facilities,”—(Edward Argar.)

This amendment requires NHS England to consult relevant integrated care boards before exercising its discretion to make a trust special administration order for an NHS trust.

Schedule 8, as amended, agreed to.

Clause 60

Joint working and delegation amendments

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Clause 61 stand part.

That schedule 9 be the Ninth schedule to the Bill.

As the Committee knows, one intention of the Bill is to create more flexibility, alongside the promotion of greater local integration. The clauses help to allow local bodies to work together in different ways to deliver effective health services.

Clause 60 enables NHS organisations, and any other bodies that may be prescribed in regulations, to commission and arrange services collaboratively, not only with other NHS organisations but with local authorities, combined authorities and other bodies that could be specified in regulations. Existing NHS legislative mechanisms make it difficult for the health and care system to work collaboratively and flexibly across different organisations, forcing local systems to adopt complex workarounds to be able to take joint decisions and pool budgets. In that context, back in the day, when I served in a local authority, we used section 75 of the 2006 Act as one mechanism for doing that with the local primary care trust.

In practice, however, those arrangements can sometimes be cumbersome and difficult to manage, and can delay making vital decisions. The new provisions inserted by the clause into the NHS Act 2006 will enable NHS organisations and any other bodies that may be prescribed in regulations to delegate functions to, or jointly exercise functions with, other NHS organisations, local authorities, combined authorities and other bodies as specified in regulations. Where functions are exercised jointly, the provisions will also enable those organisations to pool funds and form joint committees, facilitating partnership working and joint decision making at place and system level.

To ensure that delegation or joint exercise of functions does not lead to reduced accountability for delivering services, we have proposed appropriate safeguards in the clause. The Secretary of State will be able to set out in regulations which functions can and cannot be delegated, impose conditions in relation to delegation or joint exercise of functions, and specify the extent of such arrangements, for example. Furthermore, the parties will be able to agree terms as to the scope of the delegation arrangement. NHS England will have the ability to issue statutory guidance in relation to functions that are being delegated or jointly exercised under the provisions. The relevant body, as defined in the provision, must have regard to such guidance.

The provisions will replace those in existing sections 13Z, 13ZB and 14Z3 of the NHS Act 2006, which provide for the delegation of joint exercise of NHS England’s functions. The clause also amends section 75 of the 2006 Act, which I just alluded to. That section details arrangements between NHS bodies and local authorities so that where a combined authority, for example, exercises an NHS function as part of arrangements under the new provisions, it can be treated as an NHS body. That is in line with how combined authorities are treated for other, similar joint working arrangements.

Clause 61 and schedule 9 focus on the delegation of functions. Clause 61 inserts a new section into the NHS Act 2006 that makes express the assumption that a general reference in the Act to a person’s functions includes any functions that they are exercising on behalf of another person. That means, for example, that a reference in the Act to the functions of NHS England should cover any public health functions of the Secretary of State that NHS England may be exercising on their behalf under section 7A arrangements. The practical effect of this would be, for example, that any general duties that apply when NHS England is exercising its functions would also apply when it was exercising delegated functions. Until now, delegated functions have not been dealt with consistently in our health legislation. While it is not feasible, notwithstanding the suggestion of the shadow Minister, the hon. Member for Ellesmere Port and Neston, to remedy this issue across all health legislation in one consolidating Bill, this clause seeks to produce a more consistent approach.

Schedule 9 contains amendments to the NHS Act 2006 and other legislation to reflect the broader approach taken by clause 61 to delegated functions. Clause 61 also enables regulation to be made to create further exceptions where necessary to ensure that delegated functions are not covered by a provision where this would be inappropriate. Clause 61 addresses an important but technical legal issue in the Bill and is essential for enabling consistent and clear interpretation of our legislation.

These clauses are essential for ensuring that NHS organisations can collaborate effectively with each other as well as with other partners in the system. I therefore commend clauses 60 and 61 and schedule 9 to the Committee.

Members will be relieved to hear that I will not detain the Committee long on this. Clause 60 does what the NHS itself has decided it needs. Over the last six years, we have had various iterations of this integration process, joining things up around joint working, joint bodies and delegation. The provisions try to put all that in one place.

A recurring theme is clarity about the extent of crossovers between local authorities and the NHS. In that respect, proposed new section 65Z5 suggests that local authorities can carry out any function of an NHS body. Could the Minister say more about that? Does it mean that we could see local authorities commissioning—setting up GP surgeries in wellbeing centres? We are assuming that this is one-way and there is no reciprocal arrangement for the NHS to take on local authority functions, so that a foundation trust could not take on an arm’s length management organisation or some other local authority function as a tax-efficient way of avoiding certain liabilities. Could the Minister respond on that?

I also wonder about care trusts, which were the original integrated working teams with the NHS and local authorities. They are rarely mentioned and were largely regarded as unsuccessful. Is there any intention to favour such genuinely integrated bodies? They were used in one recent case by an integrated care provider to get around some of the prohibitions on new trusts. Can the Minister tell us anything about where care trusts now fit into the landscape?

Given the joint nature of the provision, I would like to know why the guidance was published only by NHS England. Should it not have been a joint effort by the NHS and the Local Government Association? Was the LGA consulted and involved in the preparation of the guidance? That perhaps exposes that this is really about the NHS, not about integration across the board. As we have heard today, the ICPs will roll up at some later point, perhaps exposing the reality that this is going to be an NHS-dominated process.

Finally, on the pooling of funds, is there any limit on that? Is that envisaged to be an occasional opportunity, or will it be a more significant step down a road of full funding? Will the Minister set out whether the direction of travel will be quite as dramatic as possibly suggested by the clause?

I am grateful to the shadow Minister for his support for the clauses and for the, as ever, perfectly sensible questions he poses. I hope to reassure him that the intention behind the clauses is not to create tax-efficient organisations or anything like that; it is to create the most efficient organisations for the delivery of joined-up care. I alluded to section 75 of the 2006 Act, which is an example of what many local authorities are doing already.

On guidance, I hope to reassure the hon. Gentleman that, throughout the genesis of the legislation, we worked collaboratively with the Local Government Association, reflecting local authorities more broadly. As we develop guidance, I am clear that the NHS, NHS England and the Government will continue to work with the association to ensure that local government’s view is reflected in the drafting. A number of conversations have already taken place between officials and the LGA. Notwithstanding the debates we may have in this House or how the legislation emerges, I am clear that we will continue to work collaboratively throughout with all the partners involved, even in areas where we may disagree. We will always seek to work with them.

The hon. Gentleman expressed concerns—he will shake his head if I paraphrase him unfairly—about whether the legislation will allow for unlimited or unfettered delegation without checks and balances. Will we be able to transfer anything from an NHS trust to a local authority, or vice versa? The short answer is no. There will need to be a clear line of accountability between the body ultimately exercising the function and the delegating body. Safeguards ensure that any onward delegation is appropriate. That said, there may be circumstances in which a local authority would commission a particular healthcare service linked to other functions of the local authority delegated from the NHS. We would expect that clear accountability to be in place where that is done. We do not envisage the power being used regularly in that way, but there might be circumstances in which it would be.

Regulations may restrict what, where, when and how—and, indeed, to whom—delegations occur. The delegation agreement may also prevent further onward delegation of functions beyond a certain level. In addition—this goes back to the hon. Gentleman’s point about the LGA—NHS England will, I expect, issue statutory guidance on delegation and joint committees, which would include scenarios, case studies, model delegation agreements and similar to show how, in practice, we envisage this working. The guidance would be statutory, and I envisage it being developed in concert with local authorities, represented by the Local Government Association—that is probably the most effective way of doing that.

I hope that I have given the hon. Gentleman some reassurance that there is nothing sinister—for want of a better word—intended in the clauses; they are merely meant to make things easier for local NHS bodies and local authorities, in particular, to co-operate more. That goes back to the integration at the heart of—the thread that runs through—all the legislation.

Question put and agreed to.

Clause 60 accordingly ordered to stand part of the Bill.

Clause 61 ordered to stand part of the Bill.

Schedule 9 agreed to.

Clause 62 ordered to stand part of the Bill.

Clause 63

Guidance about joint appointments

Question proposed, That the clause stand part of the Bill.

Before I speak to clauses 63 and 64, I crave your indulgence, Mrs Murray: I should have said to the shadow Minister that the previous clauses were about delegation from the NHS to local authorities, not the other way around. I would just like to put that on the record for him, because he expressed a concern about that.

Clauses 63 and 64 have been included in the Bill to help support ICBs and ICPs and to enhance integration across the health and care system. Clause 63 allows NHS England to issue guidance about appointing an individual to roles simultaneously in NHS commissioners and NHS providers, or in relevant NHS bodies on the one hand, and local authorities or combined authorities on the other. We have seen a number of clinical commissioning group and local authority joint appointments that have supported integration and been successful, and we would be keen to see those continue.

The clause further sets a requirement for these NHS bodies to have regard to such guidance when considering making a joint appointment. Joint appointments between organisations can support aligned decision making, enhance leadership across organisations and improve the delivery of integrated care. However, we believe that greater clarity is required to support organisations in making appropriate joint appointments, to avoid conflicts of interest that can be difficult to manage. Before issuing any new or significantly revised guidance, NHS England would be required to consult with appropriate persons.

Clause 63 will allow NHS England to publish a clear set of criteria for organisations to consider when making joint appointments and ensure regard is given to such guidance. That will also provide a safeguard against any conflicts of interest that may arise in the process of making joint appointments.

Clause 64 amends sections 72 and 82 of the National Health Service Act 2006, which deal with the co-operation between NHS bodies and the co-operation between NHS bodies and local authorities respectively. The clause inserts a new power for the Secretary of State to make guidance related to the existing co-operation duties between NHS bodies and between NHS bodies and local authorities. While the existing co-operation duties in sections 72 and 82 relate to both English and Welsh NHS bodies and local authorities, the guidance relates only to England, and the requirement to have regard to guidance issued under this new power will apply only to English NHS bodies and English local authorities.

Our intention is not to produce a single piece of co-operation guidance, which would risk being too general or too wide-ranging to be effective. Rather, we are considering discrete pieces of guidance in specific areas such as delivery of alcohol and drugs services, sexual and reproductive health, or hospital discharge services, to encourage and facilitate co-operation and integration in their delivery.

The clause also amends section 96 of the Health and Social Care Act 2012, which concerns the setting of licensing conditions for providers of NHS services. The licence, as we touched on earlier today, was established in 2013 so that providers of NHS services must meet to help ensure that the health sector works for the benefit of patients. Currently, conditions can be set on co-operation, but these provisions can apply only in certain circumstances.

The clause goes further: it supports system integration, promotes greater co-operation by removing the limitation on setting licence conditions on co-operation, and expands the range of bodies with which co-operation can be required. That will strengthen and reinforce the requirements on providers to co-operate and further strengthens the ability for NHS providers to deliver the system plan.

Co-operation is central to the intentions and underpinnings of this Bill. New guidance and expanding the role co-operation plays in the licensing regime will give organisations greater clarity about the practical expectations for co-operation, help the NHS to build on the innovation, working relationships and positive behaviours that have been seen over the past year, and further embed these behaviours across the health and care system. I therefore commend these clauses to the Committee.

I am sure the Minister will be unsurprised to learn that the Opposition are a little wary of the powers in clause 63. One person doing two jobs is never ideal. I make an honourable exception for the hon. Member for Vale of Clwyd, who, in his other role, plays an important part in contributing to the wellbeing of the nation. Such exceptions are rare, and we think that two jobs for one person is never a sustainable or long-term solution.

We draw a distinction between a secondment, which obviously means that the position is by definition time limited and allows the post-holder to return to their original position. It is often good for career development, and that kind of mobility and interchange between the NHS and local authorities may be a very positive development, particularly with ICBs. However, the idea that there can be a joint appointment of a commissioner and a provider sounds wholly contradictory. Although the Minister has tried to allay our concerns by referring to guidance, it is clear that an NHS body needs to only “have regard” to that guidance. The question remains: at what point does someone step in when there is a clear and detrimental conflict of interest? We will see what the Minister has to say, but it we may need to keep a very close eye on that.

Clause 64 is a rather less obvious power grab by the Secretary of State, but it is one all the same. Clearly, he is not satisfied with the extent of co-operation between NHS bodies, because the Secretary of State now wants to be able to tell them how to co-operate. The guidance is to be issued, and a duty is to be placed on NHS bodies to follow it, or else face the consequences. What of? It is good old-fashioned persuasion—the willingness to work together for the greater good. It is actually the case that the Secretary of State wants two goes at this, as there are further powers to issue guidance in respect of NHS bodies and local authorities, which currently have to co-operate in order to advance the health and wellbeing of people.

Surely it is the case that they are doing that already. I cannot think of any reason why they would not co-operate, but what would be the sanction if they do not? Can the Minister tell us who he thinks these errant councils are that are not co-operating? Between myself, my hon. Friend the Member for Nottingham North and the Minister himself, we must have over a quarter of a century of experience in local government, and I cannot think of any occasion when councils were anything other than co-operative with the NHS. That is my experience, but if the Minister can help fill in the gaps, I would be most obliged.

The shadow Minister tempts me to name and shame. He may be tempting me in vain. He raised three key points. One was about one person doing two jobs. To paraphrase him, he asked how that would work and why it was appropriate. He also mentioned conflicts of interest and asked why it was necessary and appropriate for the Secretary of State should have these powers.

To his first point, the clause is about driving greater integration. During my time as a member of Westminster City Council many years ago, we had a joint appointment. Our director of public health, if I recall correctly, was also an NHS appointment and she sat in both organisations in the senior management structure. It was extremely effective. Conflicts of interest, as we would envisage here, were managed both within the system and in accordance with guidance and principles of appointments and appropriate governance. That worked extremely well. It was not so much one person doing two jobs, but where the job was needed and the job description fitted both organisations, it delivered a real synergy and better outcomes.

There are circumstances where it can work. I would not have envisaged it being used essentially so that one person has multiple roles and jobs, but there are occasions when there is a benefit from someone sitting jointly in two organisations to help drive that integration and shared understanding. We can create, as we are doing here, mechanisms and structures to help drive integration and co-operation, but as the hon. Member for Nottingham North will know, and as the hon. Member for Bristol South will know from her time in the NHS, we can have those structures, but ensuring that organisations work effectively often relies on individuals, personal relationships and the trust that builds up at that level.

My hon. Friend the Member for Ellesmere Port and Neston asked about care trusts, and the clause is partly designed for just that. The real problem with the clause and with joint appointments is that we already know that there are probably not enough senior, experienced people to go around to manage the difficult job of running a large hospital. The issue is ultimately about the focus on those hospitals and, indeed, on patient safety. The job of a chief executive of an NHS trust or foundation trust is an absolutely critical and quite busy one, but we are encouraging those people to take on an ICB leadership role, or joint roles in a local authority. We can either accept that those are large organisations that require particularly skilled people whom we pay properly, or we can simply merge the organisations. I would go for the former option. There are not enough of those people to go around. There is not enough variety of people. We are not encouraging the pipeline of talent, and we are not diversifying enough, and that is reflected in the NHS looking inward at itself. It is a big mistake to accept that we must have those joint appointments to bring the NHS together and make organisations collaborate.

I am grateful to the hon. Lady, but those joint appointments have always gone on—they have existed for many years. The example I referred to was in about 2008 or 2009, and it worked extremely well, as both organisations benefited from that individual being a part of both. Our clauses seek to ensure that those joint appointments work well and effectively.

The hon. Member for Ellesmere Port and Neston asked why the powers sit with the Secretary of State rather than with the local NHS or NHS England. I am afraid that he will not tempt me into naming any particular local authorities or otherwise. The NHS is a critical part of our health and care system, but integration and co-operation need to go beyond the NHS itself, encompassing the role of local authorities in this space, which we all recognise. I hope that that co-operation will be consensual and voluntary, as the hon. Gentleman said, but it is important that the Secretary of State, with his accountability to this place and to the public, sits above that system. I would argue that he is in the best position to offer guidance on how that system can co-operate, and to help to resolve matters.

One of the things that we have been told consistently is that integration and joint working are already well under way on the ground, and that the Bill is, in part, just putting a legislative seal on that work. If that is correct, why does the Secretary of State need those additional powers?

Because we wish to take the opportunity to further drive forward the integration. The system has evolved, but we want to be more ambitious. The powers reflect the fact that the Secretary of State is able to take that wide perspective to most effectively see those two organisations coming together at a macro level—at the national level. That does not mean that I am denigrating in any way the evolution that is already occurring voluntarily in a whole range of areas around the country.

I sense that the hon. Gentleman is still unconvinced by joint appointments, so I will say a little more about them before I conclude, although I might still leave him unconvinced. There are already very few prohibitions on joint appointments, and we see an increasing number of them. In some cases, however, there could be a perception, or a reality, of a potential conflict of interest that could be difficult to manage or could lead to a perception of bias. We recognise that, which is why we have proposed the power to issue guidance to help organisations make the right joint appointments and to help them understand what factors to consider when deciding whether to proceed down the route of a joint appointment. The new powers for NHS England to issue guidance will ensure that there is a clear set of criteria against which to judge joint appointments when considering whether to make one. Bodies will have to have due regard to that guidance. I believe that the powers are proportionate.

I am grateful to the Minister for giving way again. One of the critiques that we have developed —I hope that he has noticed—is that the Secretary of State has given himself an awful lot of powers and abilities to intervene. It seems highly incongruous that in the specific example of joint appointments, where there would be a clear role for the Secretary of State to intervene, he has not availed himself of the opportunity to do so.

As with so much else in the Bill, we are trying to future-proof it. Indeed, the shadow Minister and others made the point in a different context. Where are the powers? What are the options if there is disagreement, a dispute or a conflict? While not anticipating conflict, we are seeking to ensure that the Secretary of State is able to issue guidance to resolve any conflict or issues that may arise in that context. It is a pragmatic and proportionate measure to ensure that any such risks can be managed.

Question put and agreed to.

Clause 63 accordingly ordered to stand part of the Bill.

Clauses 64 and 65 ordered to stand part of the Bill.

Clause 66

The NHS payment scheme

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Amendment 84, in schedule 10, page 197, line 17, at end insert—

“(1A) The NHS payment scheme must ensure that the price paid to any provider of services which is neither an NHS Trust nor an NHS Foundation Trust cannot be different from the price paid to an NHS Trust or NHS Foundation Trust.”

This amendment ensures payment to private providers can only be made at tariff price to prevent competition for services based on price.

Amendment 100, in schedule 10, page 197, line 17, at end insert—

“(1A) NHS England must obtain the agreement of the Secretary of State before publishing the NHS payment scheme.”

This amendment ensures that the NHS payment scheme, which sets out the prices to be paid for NHS services, is approved by the Secretary of State.

That schedule 10 be the Tenth schedule to the Bill.

I express my gratitude—I may be less grateful when I sum up—to hon. Members for tabling the amendments, and for the discussion that we are going to have about the NHS payment scheme. The Bill replaces the national tariff with a new NHS payment scheme, with additional flexibilities to allow the NHS to deliver population-based funding and more integrated care approaches. The NHS payment scheme, which will set rules about how commissioners pay providers for services, will apply to all providers of NHS services, including NHS trusts and foundation trusts, the voluntary sector and the independent sector.

Amendment 84 aims to ensure that payment to private providers can be made only at tariff price. While we will not introduce competition on price, rather than quality, there may be scenarios where it is appropriate to pay non-NHS providers different prices from those paid to NHS providers, to take account of differences in the cost of providing those services—for example, different staffing costs or a different range of services provided. There may also be cases where the financial regimes of different providers make it appropriate to set different prices or pricing rules. When setting any prices, NHS England will aim to ensure that the prices payable represent a fair level of pay for the providers of those services, as well as fair pay between providers of similar services.

I reassure the Committee that we do not expect to see the rules being used to give a premium to private providers to encourage them to enter the market. We do not expect to pay the independent sector 11.2% greater than the NHS equivalent cost, as the King’s Fund briefing on independent sector treatment centres set out in 2009. Nor do we expect commissioners to pay for 100% of the contract value regardless of whether the activity reached the contracted level. Instead, the new payment scheme delivers what the NHS has asked for to implement its long-term plan. For that reason, we encourage Opposition Members not to press the amendment to a Division, but I may be pressing them in vain.

The Government will also, I am afraid, oppose amendment 100, which would require the NHS payment scheme to be approved by the Secretary of State. The NHS payment scheme will be published by NHS England, following consultation with relevant providers and commissioners, and, where relevant, the publication of an impact assessment. Integrated care boards and relevant providers will be able to make representations and formally object in response to consultations on the NHS payment scheme, as they can with the national tariff. Where the percentage of objections exceeds the prescribed threshold for either ICBs or relevant providers, or both, NHS England must further consult the representatives of the ICBs and providers that were objecting. NHS England may then publish a revised payment scheme, with another consultation for significant changes. It will also be able to publish the proposed scheme without amendment, but will be required to publish a notice stating that decision and setting out the reasons for it.

The Government are responsible for setting out overall funding for NHS England, who in turn will continue to be required to have regard to fair levels of reimbursement for providers in setting the details of the payment scheme. The Department and NHS England will continue to work closely together in the development of the NHS payment scheme, as we do with the national tariff. However, as a last resort, derived from clause 37 powers of direction, the Secretary of State will be able to require NHS England to share the NHS payment scheme before publication. The Secretary of State will also be able to direct NHS England not to publish a payment scheme without his approval, and about the contents of the payment scheme under his general powers of direction under clause 37.

Although we do not expect to need to use the powers of direction to intervene in this area, they can be used and will act as a further safeguard against unfair payment scheme provisions, as well as allowing for appropriate parliamentary accountability for funding flows in the NHS. The consultation requirements in schedule 10, and the general powers of direction, allow for sufficient Government oversight and accountability for the payment scheme, and further specific provisions would be inflexible and unnecessary. [Interruption.] I will shorten my remarks. [Hon. Members: “No!”] I am happy to go on and on, but I fear the Committee might wish me to conclude. In that context, I will highlight to the Committee that, as with the national tariff, fair levels of reimbursement are a key principle of the legal framework reflected in NHS England’s duty in subsection (6) of proposed new section 114A(6) to have regard to differences in providers’ costs and the different range of services that they provide for the purpose of securing that prices and the overall payment scheme result in a fair level of pay to different types of providers.

I will also highlight and draw to the Committee’s attention provisions in proposed new section 114C as inserted by schedule 10, which makes clear that, before publishing the payment scheme, NHS England must consult integrated care boards, relevant providers and any other person that NHS England thinks appropriate. It must also provide an impact assessment of the impact of the proposed scheme.

There is a lot of drawing up of complicated documents and costings and then a lot of complicated consultation and decisions on whether the Secretary of State will or will not decide whether he wants to be involved in looking at what the final solution is. Does the Minister have any idea of when we might see the final NHS payment system under the new arrangement?

I would not prejudge the passage of the legislation and how the House might judge it, but I look forward to such a scheme being introduced expeditiously, if I may put it that way to the hon. Member. I hope I can also reassure the Committee in respect of amendment 107, which was not selected but raised issues pertinent to the clause more broadly. This is important. It is right that the amendment was not selected—I appreciate that it was not tabled by a member of the Committee—but it does highlight issues that we need to put on the record. I appreciate the impulse behind it.

Although NHS staff pay and conditions are outside the scope of the proposed payment scheme and are protected by provisions made elsewhere, unions and other representative bodies may wish to be reassured that their members are able to go to work in appropriately funded services. I hope I have given reassurance on that point and set out why I feel the amendment, although I am grateful that it was not selected, would be unnecessary, as the Bill already requires NHS England to consult with integrated care boards, relevant providers and any other person the NHS thinks appropriate before publishing a payment scheme. It must also publish an impact assessment of the proposed scheme, ensuring that any potential consultation is properly informed of the potential effects of the scheme. I appreciate that the amendment was not selected, but I put those points on the record as I can understand the intent behind the amendment and I wanted to offer those reassurances. I hope I can persuade Opposition Members not to press amendments 84 and 100 to a vote, but I may be unlucky in that respect.

Clause 66 introduces schedule 10, which amends the Health and Social Care Act 2012 by repealing the national tariff and replacing it with the new NHS payment scheme. The national tariff has for many years improved access to services and driven up quality across the NHS, but as we move towards a more integrated system focused on prevention, joint working and more care delivered in the community, we need to update the NHS pricing systems to reflect new ways of working since the tariff was introduced, and in the light of the covid-19 pandemic.

The new NHS payment scheme will build on the success of the tariff. It will support stronger collaboration than ever before, with shared incentives for commissioners and providers of services to improve quality of care and promote sustainable use of NHS resources. The scheme will move away from a wholly payment-by-activity approach to an approach that supports more joined-up ways of delivering services, with commissioners and providers working together to deliver the best quality care.

The new payment scheme will remove perverse incentives for patients to be treated in acute settings and allow more patients than ever before to be treated closer to home and in the community. It will allow NHS England to guide the health system, through the development of guide prices for entire care pathways, while ensuring that local systems have the necessary flexibility to deliver high-quality care and use NHS resources sustainably.

The payment scheme will specify rules that commissioners must follow when determining prices paid to providers of NHS-funded healthcare services. It will allow significant flexibility over the current pricing scheme, and allow rules to set prices, formulas and factors that must be considered when determining prices paid. It also allows for in-year modifications to the rules, to reflect changes in the costs of providing services.

Crucially, the scheme will also allow the NHS to set prices for public health services commissioned by the NHS, on behalf of the Secretary of State, such as maternity screening, to allow for seamless funding streams for episodes of care. These changes to increase the flexibility and reduce transactional bureaucracy associated with the current tariff are, we believe, crucial to integrating care and tackling the elective backlog. I therefore commend this clause and schedule to the committee.

Clause 66 is exceptionally important, so I cannot promise the same brevity as the Minister. I think the rules work slightly differently on the hard stop on a Thursday than they do on a Tuesday.

I am grateful for that clarification. If I am interrupted by colleagues in order to meet the conventional times, I will not take that as a kindness.

The clause governs how billions and billions of pounds will be spent every year, so it is surprising that it is so thin: three lines under clause 66 and a rather broad schedule 10. People could read into it whatever they want. My hon. Friend the Member for Bristol South made a good point that we could be in the business of filling that out for a very long period.

I am also surprised that the Minister is so reticent about the Secretary of State’s involvement and that this power is solely reserved for NHS England. We are not suggesting that the Secretary of State would want to set payment levels for specific treatments; but the Secretary of State, either today or in the future, may want some sort of say over what is being incentivised in the system and how that extraordinary purchasing power works in practice, whether that is about innovation, prevention or incentivising buying British, for example. That is something in which I would expect there to be some political interest.

The Minister talked about using clause 37, but that is a rather blunt tool. What we offer in amendment 100 is much lighter and much less drastic than using the clause 37 powers. If the Government will not accept our amendment, I am surprised that they have not introduced a similar one of their own. Perhaps they may yet do so.

The history of the tariff and payments bears an airing here, because it informs our future. It is an itinerant journey, which all Governments of the day, of different political persuasions, have their fingerprints on. This is not a partisan issue; it is about getting this right for the future. The purchaser-provider split in the ’90s and the development of various market and quasi-market systems was patchy and sporadic. That is a topic that has launched a thousand dissertations. Sometimes it feels like we aimed for payment by results, which is a noble cause, but in reality we can very easily get to payment by volume, and that is our challenge.

Going back even further than that, it was even less satisfactory. Traditionally, we had funding mechanisms that were very hard to understand and worked by adding a bit to the previous year’s allocations, and then really sophisticated people might make some downward adjustments for efficiencies and upward adjustments for assumed increases in activities. Inevitably, bits of the health service would get into trouble and would need bailing out, and new ideas would be dolloped out without much of a process. We have, to a certain extent, returned to that during covid. Block funding has given trusts one less thing to worry about. That was probably wise, but we would not want to do it forever.

The idea of the tariff was a variant of the 2012 Act. It could, I guess, incentivise competition on quality, but not really on price, as in a real market, as the Minister said. Prior to that, in the first decade of the century, the introduction of payment by results was one of the factors that allowed the longest successful period in the history of the NHS, which saw waiting lists come tumbling down—so much so that the demand for queue-busting private options evaporated and private providers became suppliers to the health service, rather than suppliers of private healthcare.

Payment by results, or pricing, can be a tool to tackle waiting lists. Given that Conservative Governments leave office with spiralling waiting lists, that is worth remembering for the future. Although that may be a discussion for another day, I want to ask the Minister whether he thinks NHS pricing is likely to be part of the recovery strategy. It is all well and good saying that this may take years and years to come to fruition, but what about now?

The historic decision back in the first decade of this century was that private providers should be paid the same as the cost of the NHS, so that there is no financial incentive to use the private sector. I think that is a wise principle, but it can and has been worked around. We have seen some very dodgy, spurious outsourcing of services, such as cleaning, which was an absolute disaster in Nottingham.

There are and have always been large swathes of the health services where payment by results or volume did not apply. One was mental health, where defining the product was far from easy, so it was very difficult to price. For many years, the mental health sector wanted to be part of this, but that never happened. That is much less of a priority for the sector now; it is just desperate for proper funding. It continues to struggle.

Of course, in such a system we will always have gaming and bureaucracy. Any system such as this gets gamed. Upcoding is one example, where the work that is billed for gets put into the highest-paying category. We have invoicing, chasing errors, and disputes over such coding, the actual volumes of work done and all the rest. That was hugely prevalent when payment by results first arrived for primary care trusts, and I think it is still with us in some form today. The cost of the market systems, data collection and processing is well above the cost of providing entirely necessary management information about cost and volumes.

Of course, that is not to make an argument for no prices at all. For decades, the NHS as a system did not really have any idea what anything cost. The accounts were not particularly well kept, and there were no data collection systems and staff doing analysis. As a result, the variations were huge, and that did not work in the interests of the system. I am arguing not for a no-cost regime, but for one that lands in a sensible place and does not become an industry in itself. At the moment, we have no idea, because what is on the face of the Bill is so broad, and the Minister is promising quite a long walk into the future with not a lot of certainty.

Many discussions about the long term plan, the formation of STPs—then accountable care systems, then integrated care systems, and now ICPs—and the rest have been about co-operation and collaboration, a return to non-market days, and a dilution of the commissioner-provider split, at least so far as NHS bodies are concerned. There will still be a strong current to say that there has to be some sort of tariff and benchmark as a guide, but some will say that there may be some sort of ability to vary as circumstances dictate—a kind of “Trust me, guv” arrangement whereby people of good will and common purpose can decide what is best, and that would be acceptable. To an extent, that flexibility is understandable if we are talking about the internal workings of an integrated, publicly provided NHS.

However, when we are talking about £10 billion more a year of contracts with private acute care providers, that is real money exiting the NHS bank account, so we need to be much more careful. That is where amendment 84 comes in: there has to be some sort of limitation on what private providers are paid. I was not at all convinced by the Minister’s explanation that there might be different costs, because of course there are different costs, the No. 1 cost being the need to derive profit from the contract. That is already a big cost. Of course, that can be met by compromising on quality or through downward pressure on what staff receive, but that is also a bad thing, so I did not think that was a particularly persuasive argument.

When it comes to all this money going out to private providers, there really ought to be some standardisation of the contract. If amendment 84 were accepted, we would have greater assurance that this is something done based on need, not cost or convenience. We would much rather invest in the NHS itself, taking away any perverse incentives to lean on the private sector as a resource pool and any risk of sweetheart deals due to our reliance on the good will of for-profit organisations.

In conclusion, we do not want the Secretary of State to price up a hip operation, but we do think there ought to be some interest in what our purchasing does in this country, to ensure that it is as good as possible. I do not think we should be using the blunt and brutal tools in clause 37, so I hope that the Minister will think again about amendment 100—if not now, then at a later point in proceedings.

Ordered, That the debate be now adjourned.—(Steve Double.)

Adjourned till this day at Two oclock.

Nationality and Borders Bill (Fourth sitting)

The Committee consisted of the following Members:

Chairs: Sir Roger Gale, †Siobhain McDonagh

† Anderson, Stuart (Wolverhampton South West) (Con)

† Baker, Duncan (North Norfolk) (Con)

† Blomfield, Paul (Sheffield Central) (Lab)

† Charalambous, Bambos (Enfield, Southgate) (Lab)

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

† Goodwill, Mr Robert (Scarborough and Whitby) (Con)

† Gullis, Jonathan (Stoke-on-Trent North) (Con)

† Holmes, Paul (Eastleigh) (Con)

† Howell, Paul (Sedgefield) (Con)

† Lynch, Holly (Halifax) (Lab)

† McLaughlin, Anne (Glasgow North East) (SNP)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Owatemi, Taiwo (Coventry North West) (Lab)

† Pursglove, Tom (Parliamentary Under-Secretary of State for the Home Department)

Richards, Nicola (West Bromwich East) (Con)

† Whittaker, Craig (Lord Commissioner of Her Majestys Treasury)

† Wood, Mike (Dudley South) (Con)

Rob Page, Sarah Thatcher, Committee Clerks

† attended the Committee


Rossella Pagliuchi-Lor, UNHCR Representative to the UK, UNHCR UK

Elizabeth Ruddick, Senior Legal Associate, UNHCR UK

Siobhán Mullally, United Nations Special Rapporteur on Trafficking in Persons

Dame Sara Thornton, Independent Anti-Slavery Commissioner

Lisa Doyle, Executive Director of Advocacy and Engagement, Refugee Council

Mariam Kemple-Hardy, Head of Campaigns, Refugee Action

Priscilla Dudhia, Advocacy Co-ordinator, Women for Refugee Women

Alphonsine Kabagabo, Director, Women for Refugee Women

Patricia Durr, Chief Executive, Every Child Protected Against Trafficking (ECPAT)

Patricia Cabral, Legal Policy Officer, European Network on Statelessness

Adrian Berry, Immigration Law Practitioners Association

Public Bill Committee

Thursday 23 September 2021


[Siobhain McDonagh in the Chair]

Nationality and Borders Bill

Examination of Witnesses

Rossella Pagliuchi-Lor and Elizabeth Ruddick gave evidence.

We will now hear from Rossella Pagliuchi-Lor, United Nations High Commissioner for Refugees representative to the UK, and Elizabeth Ruddick, senior legal associate, both representing UNHCR UK. We have until 2.30 pm for this session. Will you please both introduce yourselves for the record?

Rossella Pagliuchi-Lor: Good afternoon to everyone. My name is Rossella Pagliuchi-Lor. I am the UNHCR representative to the United Kingdom.

Elizabeth Ruddick: Good afternoon. My name is Elizabeth Ruddick. I am a senior protection associate with the UNHCR in the United Kingdom.

Q137 Welcome, Elizabeth and Rossella. I will ask you a few questions, primarily about the legality of the Bill in relation to international law. In your opinion, do various clauses in the Bill comply with international law?

Rossella Pagliuchi-Lor: Thank you very much for this question, but I would like to start with a short statement, which will also cover that. It is, of course, one of the areas of particular interest and concern to us.

You know, of course, that UNHCR has already published two sets of opinions: one on the policy document and the other on the Bill. I want to start by saying that we actually support the broad intent—the broad aims—of this Bill: combating smuggling networks, having fairer and faster procedures, and facilitating the return of those who are found not to be in need of international protection. However, we believe that the Bill is unlikely to achieve those aims, and may further exacerbate some of the identified issues.

Our concerns revolve around three areas. The first concerns the breach of international law, as the Bill contravenes the UK’s obligations under the 1951 refugee convention. The Bill revolves around the notion that refugees are required to seek asylum in the first safe country they find. To be clear, that principle is not found in the refugee convention, and it is not a requirement in international law. It is also unworkable because it would further increase pressure on those few countries that find themselves at the frontier of a crisis. The risk, of course, is that they would be overwhelmed, and that might impact on both their capacity and their good will to provide protection and solutions.

The Bill, as it stands, will cause significant suffering to people who are guilty of nothing more than seeking asylum in the UK. It makes unauthorised arrival and presence in the UK a crime punishable by up to four years in jail, without the defences that are actually provided for by the 1951 convention. It would also keep refugees in a situation of enforced precarity for up to 10 years, with no access to public welfare unless destitute, and under threat of removal to another country, if that were possible. This is really going to create massive problems not only for these individuals at a personal level, but for their communities, local councils and the NHS.

Lastly, the system as described would exacerbate the current backlog and increase costs by making procedures longer. That will delay the integration of those who are eventually found to be refugees, and will hamper the return of those who are not found to be in need of protection. It will have a number of unintended negative consequences that will impact on the very aims that the Bill purports to pursue.

Q Just to paraphrase, you think that the Bill will not achieve its objectives because it will mean that people stay here longer, and because it does not comply with international law as you see it?

Rossella Pagliuchi-Lor: Absolutely. As I said, there is no requirement in international law that refugees should seek asylum in the first safe country they find. We believe that there will be consequences if countries start reneging on or trying to diminish their responsibilities and commitments under the convention. There is a risk of triggering a race to the bottom. We have to perceive that every time we make it harder or try to discourage refugees from reaching our shores, we are diverting them to another country. It risks creating a chain in which refugees will find it harder and harder to find asylum anywhere. The international system is based on the good-faith application of the commitments that have been freely undertaken by states. When states do not fully embrace those commitments, the result is the erosion of international law. International law is nothing more than a contract between states, and it lives or dies by states’ willingness to comply with it.

Yes, we are very concerned, and we are concerned also because we are frankly in a position of constantly advocating for asylum and doing so with countries that have way more refugees than the UK. The element that has been lost in this discussion is that the UK, by reason of its geographical position and its relative distance from crisis countries, in fact receives a pretty small number of refugees. I am not suggesting that this is something you want, and there are certainly more than you would wish for, but in the big scheme of things it is a relatively small number. This is also true, by the way, of countries around you. The UK has a fairly stable number of asylum seekers in the range of 35,000 per year. France has just under 100,000 per year, with some variations. Germany has around 150,000, and Spain, Greece and Italy all receive more applications than the UK. Of course, I am not even mentioning countries closer to the crisis. Let us not forget that 73% of all refugees and asylum seekers remain in countries neighbouring their own, and that about 85% or 86% remain in developing or middle-income countries. I would like to encourage you to look at this matter in perspective. The channel crisis is certainly a challenge, but I think it has to be looked at in a broader perspective of a global challenge for all countries with respect to displacement.

Q Just to follow up about other countries that neighbour areas where there are war zones and conflicts, can you talk about an example of one of the countries that border Syria, such as Jordan or Turkey?

Rossella Pagliuchi-Lor: Turkey at the moment has the largest number of refugees, as you know. We are talking about upward of 4 million or maybe even more. At one stage, Lebanon had one Syrian refugee for every four people; a huge percentage of its population were refugees. If you are talking about Afghanistan, there is a registered population of Afghan refugees of 780,000 in Iran, plus probably 1.5 million—maybe more—who are non-registered. Likewise, Pakistan has, between registered and unregistered, well above 2 million people. It has, I think, 1.4 million registered and maybe quite as many unregistered. So you are talking about numbers that are, frankly, enormous, relative to the numbers who come to Europe and, even more so, to the ones who come to the UK.

Q As you have indicated, the Bill seeks to punish people on how they arrive in the UK, by giving them less temporary protection. Are you aware of any other countries that do that apart from Australia? We heard this morning from the high commissioner for Australia.

Rossella Pagliuchi-Lor: There have been attempts by other countries, and of course the case that comes to mind is Denmark, which has been in the media, particularly in relation to the question of returns of Syrians. But I would like really to focus on the UK, rather than on other countries, if you will allow me. First, obviously there are principles that are applicable across the board. Obviously, we are asking all countries to act in a manner that is consistent with their international obligations. I think that we tend to forget that situations are sometimes different in terms of the practical applications. I know that you had the Australian high commissioner here this morning, even though I did not listen to his presentation. But of course the situation in Australia is very different from the situation in the UK. In any case, I would strongly recommend you not to follow that example, frankly.

Q The vulnerable persons resettlement scheme closed. Do you think that the closure of schemes like that has an impact on the increased numbers of people seeking asylum in places like the UK?

Rossella Pagliuchi-Lor: Yes and no. Having resettlement schemes and other legal pathways, such as a well-functioning and perhaps slightly more generous family reunion mechanism, will certainly allow certain people to come legally where they might otherwise have been tempted to do so irregularly. However, the reality is that resettlement programmes—even a generous and well-run resettlement programme such as the VPRS—are really a bit of a drop in the bucket. You have to consider that, in any given year, we manage to resettle a fraction of 1% of the refugees who would be in need of resettlement. There is really a vast disproportion. That is why we say that resettlement is extremely valuable, is a life-saving mechanism—and we really commend the UK for its efforts in this sense—but is not an offset for granting asylum.

Q When I visited the refugee camps in Jordan in 2017, I was greatly impressed by the work of the UNHCR selecting the most vulnerable people to bring them under the 20,000 scheme that David Cameron had announced. Could I ask whether you think the best way to select those who are the most needy is by using organisations like the UNHCR, or whether the economic test of who can afford to pay a people smuggler is a better way of going forward? At the moment, we seem to be swamped by people who use people smugglers rather than the legitimate, legal routes using the amazing services of the UNHCR.

Rossella Pagliuchi-Lor: Thank you for this question, because it allows me actually to address what I believe is generally a bit of a misconception about spontaneous arrivals. Certainly—of course—the UNHCR has a system to identify the most vulnerable, but as I said, we only manage to submit a very small percentage of those we have identified, so the system definitely does not cover the needs. But the individuals who come here should not be regarded necessarily as wealthy people who have the means to come here. Typically, the vast, overwhelming, majority of those who move irregularly do so having gathered all the resources of themselves and their families. Homes are sold. Whole families are literally impoverished to gather the money that is required for somebody to make this trip. One of the reasons these trips can last weeks, months, or occasionally even longer, is that sometimes they have to stop in an intermediate place, such as Libya, to gather more money. We should not think of these people as being privileged and wealthy, and therefore having the luxury of travelling irregularly. The reality is quite different; these are journeys of desperation in most cases.

Q That is certainly what I heard from the Nigerian Minister of Interior, who said that the most vulnerable people in the areas Boko Haram controlled had no chance, no way to afford paying people smugglers. It was middle-class people—by Nigerian standards—who could afford to send, say, son No. 2 on that hazardous journey.

Rossella Pagliuchi-Lor: I cannot talk about the statement by the Minister about the Boko Haram area, but I can tell you that, first, “middle class” means something different in different countries. Secondly, the people you see applying for refugee status here are not necessarily members of the middle classes. There is a much wider range. I suggest that if someone is truly wealthy, they might be able to come by plane. That is the most expensive kind of irregular journey because it would mean purchasing a passport and a ticket.

Q Thank you very much for your time today. I have one quick question on that: if a person is middle class in the country they live in, can they still be a refugee, still be in danger and still have protection needs?

Rossella Pagliuchi-Lor: Of course.

Q Thank you. If the Bill is enacted, anyone acting with purely humanitarian motives could be criminalised just for facilitating the arrival of a person who does not have entry clearance for the UK. They could face a long time in prison. The Canadian Supreme Court found that similar provisions in Canada violated article 31 of the refugee convention. Can you tell me more about that?

Rossella Pagliuchi-Lor: Thank you very much for that question. Being or not being a refugee has nothing to do with economic status. Refugees can be poor, middle class, or very wealthy. What makes a person a refugee is a well-founded fear of persecution for one of the five reasons established in the convention. Since we are talking about this in the Bill, the manner of a person’s arrival also has no bearing on this whatsoever. A refugee is a refugee is a refugee. If you are a refugee, you are entitled to certain things. That is really the bottom line.

On the criminalisation of those who may be assisting people to move across borders, there is an important difference to be made between those who do so for gain—the smuggler; we all know that there are criminal networks preying on people’s despair, and we commend the Government for their robust action in pursuing these people and bringing them to justice; that is a relief—and those who provide assistance to people in difficulty. They could be organisations rescuing asylum seekers and migrants at sea, for example. That is a completely different kettle of fish, and we definitely believe that it should not be penalised. The difference is between gain and humanitarian purpose.

Q Do you know anything about what happened in Canada?

Rossella Pagliuchi-Lor: I do not. Perhaps Elizabeth does. Otherwise, I can of course let you know

Elizabeth Ruddick: In Canada, there was an attempt to prosecute refugees who had been abandoned by the smugglers and were steering a boat to safety. They were prosecuted for facilitating each other’s safe arrival. That was found to be a violation of the convention, because if you criminalise refugees assisting each other to survive during the course of their journey, you are criminalising seeking asylum.

Q It is important for the Government to hear that. They will face the same possible actions if they go ahead with this.

My other question involves the raging debates we have here all the time, which has come down to, “Yes, it does”, or, “No, it doesn’t”. People who are refugees seeking protection do not have to seek protection in the first country that they come to. We say that all the time, but we have debates with our colleagues who say, “Yes, they do. If they don’t, they are not refugees.” You say, “No, they don’t.” Will you explain that more?

Rossella Pagliuchi-Lor: The answer is, unequivocally, no. Refugees are not required to seek asylum in the first country, full stop. The manner of travel has no bearing on refugee status—none at all. That said, it does not translate into an unfettered right for people to choose where they want to seek asylum.

What is important to consider here—it has a bearing on your situation—is that UNHCR encourages countries to enter into agreements that allow them to transfer responsibilities for asylum seekers in a manner that ensures that every individual has access to a fair procedure, to decent and appropriate reception and, if found to be a refugee, a viable integration path. They do so by sharing responsibility in such a way that protection space is expanded rather than decreased.

One of the specifics of your Bill is that it makes extensive use of so-called inadmissibility in a situation in which there is no agreement that would allow the UK to transfer these people to another safe country in which it would make sense for them to be assessed. The UK, as you know, was part of the Dublin scheme, which is not perfect by any means but was at least a mechanism that established certain rules allowing states to share responsibility and to decide who should be assessed where.

At the moment, you do not have any such agreement with the EU, so a bit of a strange situation is realising itself. Since the entry into force of the changes to the initial rules, I understand that about 4,500 individuals have been notified of their possible inadmissibility. Seven of them have been found inadmissible, but I do not think that anyone has been returned to anywhere, because this has simply created a very long queue leading to nowhere. It is fundamental to the good management of the international refugee system that there should be strong collaboration between states. I hope that clarifies things.

That really does help. I have one more brief question. Would you say that you are an authority on the refugee convention?

Rossella Pagliuchi-Lor: The UNHCR is the established guardian of the 1951 convention. Our statute is an annex to a General Assembly resolution. The duty of states to collaborate with UNHCR is enshrined in article 35 of the 1951 convention, so yes.

When you spoke first, you said that the Bill would not carry out its intentions. To pick up on that, many parts of the Bill have similarities to the Australian model, which was implemented in 2014. As we know, that was very successful —no migrants were crossing after about nine months of that policy coming in. You said that there were differences from the situation that arose in Australia. I get that, there are differences between them and us, but there are also a great deal of similarities. In your eyes, what are the differences that would make this legislation so unsuccessful?

Rossella Pagliuchi-Lor: Let me just take a step back on Australia. The Australian approach was essentially based on offshoring and externalisation, and on turning around the boats. The offshoring and externalisation did not have any impact on the boats, but it did have a terrible, terrible impact on the people who got caught in it. If you read reports of what happened on Nauru and Manus island and so on, there were very high levels of violence, sexual violence against women and children and suicides. Children were found to be the most traumatised that most practitioners had ever seen. Children were essentially withdrawing into themselves and becoming entirely irresponsive to external stimuli. There were also suicides and self-harm. You really need to ask yourselves whether that situation is something you would like to associate your country with, to be entirely frank.

I am sorry to interrupt when you are giving such good testimony, but quite a few people want to ask questions and I would like to get them in if I could. We will take Jonathan Gullis, then Paul Blomfield, and then the Minister. Apologies.

Q I will keep it brief. Stoke-on-Trent North, Kidsgrove and Talke residents, in the overwhelming majority—

Rossella Pagliuchi-Lor: Sorry?

In the constituency I serve, the residents are livid with the situation in the English Channel. We are more than happy to do our fair share on a global perspective—we have seen that with Afghanistan and Syria—but illegal economic migrants crossing the Channel is totally unacceptable. Do you not think that having a system in place that says that if you enter this country illegally, that will have an impact on your application, that will help to deter people and make them understand that it will harm their opportunity to get permanent residency in this country?

Rossella Pagliuchi-Lor: No, I do not. I think that the reasons why people come are not likely to be affected by what you are saying. Most of the people who arrive here are found to be genuine refugees, not illegal immigrants, by the Government and by your procedures. The fact that they came as they came has got nothing to do with whether or not they are refugees.

The best way of ensuring that the system works is by having a very fast, fair and efficient procedure, because that allows you to move quickly and determine who is a refugee and can stay, and who is not a refugee and needs to be returned, if they have no other legitimate reasons to remain. That can be done if it is done quickly, not if it happens five or 10 years down the line. The Home Office is working now on procedures that will allow it to deliver much faster and, we think, better quality judgments. That would help to deter those who might be trying their luck and at the same time provide protection for those who need proper security.

Sorry, Jonathan; can I just bring in Paul Blomfield? Paul, I am then going to have to interrupt you to get the Minister in.

Q Of course, Chair, I will be very quick. You mentioned that in your view the Bill will be counterproductive to its own objectives. I think I heard you right in saying that it would hamper returns. Could you develop that point?

Rossella Pagliuchi-Lor: I will. One of the important elements is that if you have a system, there have to be consequences to that system. It does not make any sense to have a system that determines who is a refugee and who is not, and then the results go nowhere. I know that it is difficult to arrange for returns—there are a number of issues and they need a great deal of partnerships internationally—but it is a fact that if somebody is properly looked at in a proper procedure and then found not in need of international protection, it is a lot easier if that happens closer to the time than after a few years, when they have had time to establish a family and when perhaps the whole question of identification is getting a little more vague. It is a fact that good case management increases the chances of people returning, and it increases the chances of people returning voluntarily, too.

Q Clearly, one of the fundamental cornerstones of the policy is prioritising safe and legal routes, and I am sure that you would strongly support that. Presumably you also think it is right to try to deter and dissuade people from making those very dangerous crossings across the channel, which pose a grave risk to life. What do you suggest, if not the approach we are suggesting?

Rossella Pagliuchi-Lor: Granted, you will never have a silver bullet that solves all of your issues until and unless people no longer feel the need to seek asylum elsewhere. However, as I said, I think that a fast and fair procedure is your best defence, alongside strong agreements with the European Union on the allocation of responsibility for asylum seekers. That is by far the best way of dissuading people who might sometimes be hopping around countries to choose a jurisdiction or who are just giving it a shot—people whom your colleague referred to as illegal immigrants. There are some who could masquerade as asylum seekers; there is no question about that.

Order. I am sorry, but that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank our witnesses for their evidence.

Examination of Witnesses

Siobhán Mullally and Dame Sara Thornton gave evidence.

We will now hear from Siobhán Mullally, United Nations Special Rapporteur on Trafficking in Persons, and Dame Sara Thornton, the Independent Anti-Slavery Commissioner. We have until 3.15 pm, so slightly longer than the last session. Would the witnesses please introduce themselves for the record?

Dame Sara Thornton: Good afternoon. I am Sara Thornton, the Independent Anti-Slavery Commissioner for the United Kingdom.

Siobhán Mullally: Good afternoon. I am Siobhán Mullally, Special Rapporteur on Trafficking in Persons, especially women and children.

Q Thank you to both of our witnesses. On part 4 of the Bill, on modern slavery, I think we can all agree that securing prosecutions against the perpetrators of trafficking and modern slavery has to be a priority. With that in mind, do you think that the Bill will improve our ability to secure prosecutions?

Dame Sara Thornton: It is not for me to have a view on most of the provisions, but part 4 and its impact on modern slavery is my particular focus. One of my concerns about the Bill is the unintended consequences, in particular of clause 51, on disqualification from protection. That is probably my gravest concern about unintended consequences.

In my view, we currently prosecute far too few traffickers and criminals for those offences, and I am concerned that the Bill could unintentionally undermine that. I say that because in defining the public order exemption, the bar has been set low and the net has been cast wide—whichever phrase you want to use. It has the potential to reduce support for a considerable number of victims of modern slavery through the national referral mechanism, which matters because, if victims are not supported through the national referral mechanism, they are put in a very difficult position in terms of supporting police investigations and prosecutions. That is my concern.

I was trying to be helpful and think what it is about clause 51 that is a particular problem. Clause 51(3) defines the public order exemptions; I have been looking at paragraphs (b) and (f) in particular. Paragraph (b) is where the list of offences is from schedule 4 of the Modern Slavery Act 2015. That list was passed by Parliament six years ago for a very different purpose. It was about which offences were excluded from the protection of the statutory defence. The first question I have had is about whether we are actually going to use that list for a very different purpose.

The second issue is clause 51(3)(f), where the definition of a foreign criminal from the UK Borders Act 2007 is used. Again, that is a very low bar because all it requires is for somebody to be sentenced for 12 months, and sentenced not just in the United Kingdom but anywhere in the world. My concern is that it sets quite a low bar. I have been speaking to colleagues in law enforcement and from charities that provide support for witnesses, and their concern is many people who have given witness evidence in the Crown court would be caught by this, and they would not necessarily be provided with support in the NRM. That is my concern. My other suggestion might be considering an amendment saying that if a victim is supporting a police investigation or a prosecution, then perhaps they should be exempted from this provision.

Q Thank you. Before I bring in Ms Mullally, with your concerns around clause 51 in particular, do you think it is incompatible with some of the protections in section 45 of the Modern Slavery Act 2015?

Dame Sara Thornton: I do not think it is necessarily incompatible. My main point is that clause 51(3)(b) uses the schedule 4 list of offences passed by Parliament in schedule 4 of the Modern Slavery Act for quite a different purpose. I would hope that somebody has spent some considerable time thinking, “If we use this for a purpose other than that for which it was intended, can we model the consequences?” At the moment, the number of prosecutions is in the hundreds per year. My concern is that if we remove support from victims and witnesses, we will reduce that even more.

Q Thank you. Ms Mullally, do you think the Bill will help us secure prosecutions?

Siobhán Mullally: Thank you very much for your question. My role as UN special rapporteur on trafficking in persons is to ensure that the highest standards are met in terms of protecting the human rights of victims of trafficking, as well as combating impunity for trafficking in persons by ensuring effective investigations and prosecutions. That is critical to a human rights-based approach because we need to combat impunity, ensure accountability and protect victims of trafficking.

The protection of victims enables us to be effective in investigations and prosecutions. As it stands, with my mandate as UN special rapporteur on trafficking in persons, I have specific concerns around clauses 46 to 51 in particular as not complying with international law, international human rights law and with the state’s positive obligations to identify, assist and protect victims of trafficking without discrimination. That in itself will hinder effective investigations and prosecutions and hinder the goal of combating impunity for trafficking in persons and ensuring accountability.

I have very specific concerns about those provisions in relation to the state’s positive obligations under the European convention on human rights, in particular articles 4 and 6, and under the Council of Europe convention on action against trafficking in human beings, as well as very specific concerns in relation to the rights of child victims of trafficking, as protected under the UN convention on the rights of the child and many other human rights instruments.

I can talk a little bit more about those specific concerns, but as it stands I would have concerns that the Bill does not comply with the state’s obligations under international human rights law.

Q That is incredibly helpful. On the point about children entering the NRM, Dame Sara, I know that in your written correspondence with the Home Secretary, you have identified concerns about a lack of detail and provision for children that is cause for concern with this piece of legislation? Given that last year 47% of referrals to the NRM were from those exploited as children, what sorts of provisions would you expect to see in this legislation to protect children?

Dame Sara Thornton: Last year in 2020, nearly half of the potential victims referred into the NRM were children, but in this part 4 on modern slavery there is only one mention of children. I have some specific suggestions: on clause 53, which is about the granting of limited leave, there were real concerns about the way that the requirement to consider the best interest of a child appears to be ignored. The best interests of a child goes back to the UN convention on the rights of a child; it is in the Children Act 1989, and it is also in the European convention against trafficking, that decisions should be taken in the best interests of the child. Looking at clause 53, and thinking about where there is a positive conclusive grounds decision that the child has been trafficked, and that they were under 17 at the time they were referred into the NRM, there really should be a presumption for the Secretary of State that leave to remain is given in the child’s best interests.

Clause 53 is one example. I am now going out of part 4 into clauses 14 and 15. The equality impact assessment published by the Government last week committed to mitigating the adverse impact on unaccompanied asylum seeking children by exempting them from the inadmissibility process. I do not think that is anywhere in the Bill. I think that it is important that something that has been identified as a problem for children is considered in legislation.

There are two other areas: in clauses 46 and 47, which are about the traffic information notices, there is no comment about whether they would apply to children. It would be really good to have clarity about whether children are going to be given these traffic information notices and asked to respond in a set period. Lastly, I have just covered clause 51 and the exemptions from protection; again, it is not clear whether those would apply to children. I think experts in the rights of children would argue that there are several international legal frameworks that suggest this is not appropriate and not in the children’s best interests.

Q Thank you very much. Ms Mullally, I ask you the same question about what specific protections for children you would expect to see in this legislation?

Siobhán Mullally: First and foremost, it is for the best interests of the child to be the primary consideration when addressing the rights of children under all aspects of the legislation. The convention on the rights of the child is almost universally ratified, and that is a core principle of the convention.

To go back to clauses 46 and 47, in particular: with regard to both adult and child victims of trafficking, there is no attention given to the impact of trauma on victims of trafficking. It is well recognised that this can lead to delays in disclosure of information. The impact that the experience of trafficking has on the disclosure of information and the reporting of the harms that have been endured has also been documented in the case law of the European Court of Human Rights—for example, in Elia in Greece, and Essen in Croatia. That is even more heightened with children.

In the recent judgement of V.C.L. and A.N. v. the United Kingdom, the European Court of Human Rights emphasised again that it is a positive obligation on the state to identify and ensure assistance and protection to victims of trafficking. It is not an obligation on the victim to self-identify or report, and certainly not within any specific timeframe. It is a positive obligation on the state. As the European Court of Human Rights said in V.C.L. and A.N. v. the United Kingdom—with regard to the two Vietnamese boys in that case who were in an even more vulnerable situation—because of children’s vulnerability, they have a right to international protection. It is critical that that informs all elements of the Bill. I am picking out those two because they have a specific impact, in terms of recognising the impact of the experience of trauma on a victim of trafficking. It is a core commitment of the United Kingdom to combat the trafficking of persons, and modern slavery, both at home and abroad. It is critical that we see best practices being incorporated here.

Q I wondered if I could follow up on clause 48—a clause you did not mention—and the proposals in the Bill that would, effectively, increase the threshold for initial identification for a reasonable grounds decision through the national referral mechanism. Do you think the threshold is currently set too low? Are there risks associated with setting it higher in the way the Bill does?

Dame Sara Thornton: There are two schools of thought on this. Many in the sector will argue that the current, very low bar is appropriate, but I know colleagues in law enforcement think it is too high. The Bill is suggesting that we use the wording in the European convention against trafficking, or reasonable grounds to believe that an individual is a victim of modern slavery and human trafficking. On balance, I think that is appropriate.

Reasonable grounds is a pretty low threshold that people understand. It is more than a hunch or a suspicion, but it is not as much as a balance of probabilities. There needs to be some sort of objective information to base that reasonable grounds decision on. The obvious thing to say is that the guidance given to staff in the competent authority will be key, but it is not an unreasonable proposal—not least because the current legislation in Scotland and Northern Ireland uses the word “is” and, as far as I understand, the competent authority uses the same test across the United Kingdom. I do not think it will make that much difference, and to be consistent with the European convention is a reasonable proposal.

Siobhán Mullally: A concern here would be the possible impact of changing the threshold in terms of potential victims of trafficking accessing support and assistance and in processes of identification. Is it likely to have a negative impact? Is it likely to increase difficulties in identifying victims and referring them in a timely way for assistance and protection? That would be a concern if it is a regressive measure from where we are now; in terms of human rights law, you want to ensure non-regression in the protection of human rights of victims of trafficking.

I have concerns about the impact of that and whether it will increase the difficulty of timely and early identification of victims, because early identification is critical to ensuring effective access to protection. There is a question about how it will be implemented in practice and what the fallout will be in its implementation.