House of Lords
Thursday 26 September 2019
Prayers—read by the Lord Bishop of Southwark.
European Union (Withdrawal) (No. 2) Act 2019
My Lords, with the leave of the House, I will now repeat in the form of a Statement the Answer given in the other place earlier today by my honourable friend the Parliamentary Under-Secretary of State for Exiting the European Union:
“Mr Speaker, the Government will obey the law. This has always been the case. The House has heard this from the Prime Minister; it has heard this from the first Secretary of State, my right honourable friend the Foreign Minister; it has heard it from the Lord Chancellor, who has a constitutional responsibility for upholding the rule of law.
Yesterday, honourable and right honourable Members had the opportunity to put similar questions to the Attorney-General. The Government opposed the Act which was passed earlier this month. Notwithstanding our fervent attempts to resist the passage of the Bill, even its architects must accept that the Act makes provision for a range of potential outcomes, not one. The outcome that this Government want, and have always wanted, is a deal with the European Union. That deal can deliver the mandate from the British people. That deal is possible and is now within reach.
My right honourable friend the Secretary of State for Exiting the European Union and the Prime Minister’s negotiating team have been engaged in constructive negotiations. As the Prime Minister told this place yesterday, we were told that Brussels would never reopen the withdrawal agreement, but we are now discussing reopening the withdrawal agreement in detail. While I appreciate that there are some who may seek to anticipate failure, frustrate from the sidelines or speculate for some type of sport, this Government will not indulge in defeatism. I trust that this House, and the collective wisdom of its honourable Members, will focus its energies today and beyond on the prospects of success in these negotiations and prepare to give any revised agreement its full and unfettered support”.
My Lords, I thank the noble Lord for repeating that Statement. I have one question to put to him. He used the formula that the Government will obey the law. I think he used exactly the same formula a number of times in answering questions yesterday. Many people would like to know what the Government think the law is. In particular, do the Government think that it will be complied with by sending a letter, as set out in the Act, and then sending another letter or message in some way saying that we do not really want an extension?
I remind the noble Lord of two things. First, saying what the Government believe the law to be is not the same as saying what legal advice they have received. There is no reason not to tell this House what the Government believe the law is. It is long-standing that that position has been taken. Secondly, the Act requires that the Prime Minister must seek to obtain an extension from the European Council under certain circumstances. All noble Lords would like to know whether, if those circumstances arise, the Prime Minister will seek to obtain an extension—and not with his fingers crossed behind his back or by sending another letter or secret messages to his friends saying: “Please don’t give it”. To seek to obtain means to seek to obtain. It needs to be done in a way which complies fully with the spirit of the legislation passed by this House and the other place. Is that the Government’s view and if not, why not?
The noble and learned Lord is a distinguished lawyer. In fact, there are a lot of distinguished lawyers in this House. Some may say that there are too many, but nevertheless we have lots of distinguished lawyers and I am not a lawyer. I repeat yesterday’s statement that the law officers made in another place: we will always comply with the law. There are a lot of potential outcomes, and no doubt the Government will wish to consider them all carefully when it comes to it, but we will comply with the law.
My Lords, is this not rather difficult for my noble friend because he has been asked to comment on an Act of Parliament which was originally a Private Members’ Bill? Should not the noble and learned Lord, Lord Goldsmith, ask the noble Lord, Lord Rooker, what the real meaning of this Act of Parliament is, because he drafted it?
My noble friend makes a good point. This was not government legislation. It was a Private Members’ Bill. We did not support it; we opposed it. I advised this House against passing it. I said at the time that it is flawed and deficient in a number of respects, particularly the Kinnock amendment. However, it is the law of the land and we will comply with the law.
My Lords, I too am grateful to the noble Lord for repeating the Statement and for making and underlining the commitment that the Government will obey the law. May I test that a little further? It seems to me that, in the current very fractious debate, what is needed is to respect the impartiality of those institutions upholding the constitution and the law. Will the Minister counsel his colleagues to use language that is appropriate and not excessive and that reflects respect for our institutions, the taking of personal responsibility and a degree of restraint? When Prayers are said by Bishops in this House, we pray every day for the well-being of all the estates in this realm. We all have a duty to make our own contribution towards that.
My Lords, the right reverend Prelate makes an important point. We should always be restrained in our use of language. I believe I have always followed that principle, albeit that I enjoy the knockabout sport of politics, as many noble Lords do. However, there must always be a limit to that. I also wholeheartedly endorse his comments about respect for the institutions.
My Lords, is it not clear that once an Act of Parliament is an Act of Parliament, it becomes the responsibility of the Government of the day to make sure that it is implemented properly, effectively and with integrity? That is what Parliament expects. I was part of the usual channels in the other place and worked with people here; I know that even if the Government get a Bill that they do not like, they have a responsibility to implement that Bill. Will the Minister recognise that what we are asking for is straightforward but requires integrity? The Government are in a position where they would do themselves a lot of good to demonstrate some integrity today.
I did not detect a question in the noble Baroness’s statement, but we of course respect the rule of law. We believe that we act with integrity and I believe that I act with integrity as a Minister. I will always seek to ensure that we act within the rule of law.
As always, my noble friend speaks with great wisdom on this matter. This might be a political point, but it seems to me that the Act was designed to undermine our negotiating position. We have seen that in the negotiations that we have pursued, and it makes getting a deal harder. I am sure that that was within the calculations of some of the people who wished to ensure that it was passed. However, we will seek to negotiate in good faith; we still believe that we should respect the result of the referendum. It would do immense damage to our democratic institutions in this country if we do not. We should leave the European Union and we want to leave with a deal.
My Lords, returning to the question that the Opposition Front Bench asked—which was not answered—in the interests of transparency, can the Minister simply confirm that any communication to the European Union that in any way contradicted a request for an extension would be contrary to the spirit of the law?
My Lords, is it not disrespectful to democracy to traduce Parliament in the way that was done in the House of Commons yesterday? To talk about a “dead Parliament” is wholly inappropriate. The House of Commons is the elected Chamber. The Government are not elected directly, as the judgment on Tuesday made absolutely clear; they rest on the consent of Parliament. Does the Minister feel that the Government have that consent and do they respect Parliament?
The noble Baroness knows that I have enormous respect for her, but what is disrespectful to democracy is trying to overturn the referendum result, which is what the Liberal Democrats are trying to do. They are no longer even making any pretence about having a second referendum, which was their original position; now they just want to overturn the referendum completely. What disrespect would that mean to our democratic institutions?
My Lords, this Government are rapidly getting an unenviable reputation for saying that they always respect the law but, when tested, are shown not to have respected the law. It is therefore reasonable, in these circumstances, and given the enormity of what faces us, that the Government tell us what they think the law presently is. This is not an unreasonable question; it is capable of being answered and it should be answered. It will only not be answered if the Government either do not know or intend not to respect the law.
My Lords, if we are to try to civilise this debate after the appalling scenes in another place yesterday, would it not be worthwhile to contemplate—I speak as one who has never advocated a second referendum, as my noble friend knows—having a general election and a referendum on the same day? This could help to bring some semblance of peace and unity in our country. People could choose their party and they could choose where they stand on Brexit. Will my noble friend at least pass on that suggestion?
I will certainly pass on my noble friend’s suggestion but I am not sure of the wisdom of that proposal. What we need is a process of reconciliation in this country which could come best, I think, by a general election, with the people making a determination. The Opposition have voted against that, even though they said that they wanted it. My noble friend will know that a further referendum would require legislation to be passed by both Houses. It would be immensely contentious legislation—the Government will certainly not introduce it—and would take a long time to get through. We need to resolve these things quickly and through a general election.
Gas Tariffs Code (Amendment) (EU Exit) Regulations 2019
Motion to Approve
My Lords, I did not expect such a packed House for my statutory instrument. Let me give your Lordships some background. EU legislation governing our energy markets will be incorporated into domestic legislation via the withdrawal Act retained law. The department is working to ensure this energy legislation continues to function smoothly after exit, and supports a well-functioning, competitive and resilient energy system for consumers.
What does this statutory instrument do? The Article 50 extension to 31 October means that additional EU law will now be retained. Chapters 2, 3 and 4 of the TAR code, which established network code on harmonised transmission tariff structures for gas, have applied since 31 May. We need to amend our previous legislation, the Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019, to address inoperabilities in these additional chapters—for example, with reference to the naming of EU institutions. This supports our aim to retain regulatory functions and frameworks in all eventualities by keeping Great Britain and Northern Ireland’s gas markets working effectively, and by providing continuity for UK industry and its consumers.
The aims of TAR are to increase transparency and the coherence of tariff structures for gas sale and purchase and procedures used to set tariff structures. Tariff structures cover ways in which transmission system operators collect revenues associated with the provision of services at entry and exit points, and collect via capacity and commodity-based transmission tariffs and non-transmission tariffs.
Chapters 2, 3 and 4 applied across the UK and the EU from 31 May 2019. Regulations need to be amended by this statutory instrument to correct deficiencies in what will be the retained EU law—namely, where we state EU entity functions and references to EU institutions and bodies. Deficiencies need to be removed or replaced with reference to UK entities—for example, replacing “member states” with references to UK elements. The regime introduced by TAR is retained, subject to these amendments. The statutory instrument aims to maintain existing domestic rules while amending or removing provisions no longer functioning on exit day. It also aims to retain technical specifications wherever possible, with the result of maximising business continuity for market participants and cross-border gas trading.
In conclusion, the regulations are an appropriate use of the powers of the withdrawal Act to maximise business continuity for UK market operators, facilitate continued efficient international trade in gas, and help to protect security of affordable gas supplies for UK consumers. On that basis, I commend these regulations to the House.
My Lords, first, I welcome the Minister to his role. I know this has already been done by our official Front-Bench spokesman, but I very much welcome that he has taken on this broader brief, particularly when the areas of climate change and energy are of great importance—globally as well as within this country. I have no issue with this secondary legislation, but it enables us to ask some key questions related to energy markets, Brexit and, in particular, gas.
The first area that I want to explore is the island of Ireland. As the Minister will be well aware, there is a single energy market across the Irish Sea. I notice particularly that this statutory instrument covers the whole United Kingdom, including Northern Ireland. It is important for the Minister at this stage, particularly in the context of potential no deal, which this secondary legislation is about, to assure us that the single energy market, which includes gas as well as electricity, remains coherent. There are ways of making it remain coherent, given the total dependency that there is on energy supplies between both sides of the border in a no-deal situation. The Republic of Ireland is almost completely dependent on the UK for its gas supplies—gas is starting to come through from its own fields, but that is far from full at the moment—and any disruption of that totally integrated market would be very negative for both the Province of Northern Ireland and the Republic.
I also want to ask about interconnectors, which are an increasingly important part of our energy strategy, and rightly so; I have welcomed many times the fact that we have pushed the interconnector concept forward in relation to energy balancing within the UK, particularly with the increase in renewables. When it comes to gas, we have three interconnectors: one is with Ireland, of course, but we also have them with the Netherlands and Belgium. Again, I seek the Minister’s reassurances—I hope with some reason—that those interconnectors will continue to work, given the fact that we have had, albeit on the electricity side rather than gas, a number of energy incidents recently that mean that our energy security is particularly important in this area. As I understand it, PRISMA and the systems around it will stay in place but, as we come out of the internal energy market if we have a no-deal Brexit, I am not confident that those interconnectors will be quite so straightforward as they might be.
I wish to push the envelope slightly into the important area of oil. As I understand it, the Government have said that when we leave the European Union, however we do so, one area that has not been dealt with in terms of a rollover of European law will be the reserves of petroleum held by the UK after Brexit, and that the Government do not feel bound by the European Union rules on fuel reserves, which I think would mean some 85 million barrels of petroleum being held within our reserves. Rather, they are looking to the International Energy Agency rules, which would reduce that to 35 million barrels, under half that figure. I understand that some of that reserve is actually held in the Rotterdam/Antwerp area. If that is the case, I wish to be reassured by the Minister that in the event of no deal we would still have access to those reserves abroad.
Given the situations in Saudi Arabia with the drone attack, in the Strait of Hormuz, in Iran and in Venezuela, I caution strongly that at this time we should not look to reduce our petroleum reserves in the United Kingdom. This is fundamental to our national security and I urge severe caution on the Government. I would be very interested to hear the Minister’s response to that.
In the Mansion House speech by the previous Prime Minister, and indeed this has since been confirmed by the previous Minister, Claire Perry, we intended to remain—if we could, difficult though that may be outside the single market—a member of the internal energy market, where we have been one of the greatest proponents of liberalisation and one of the countries that has done most to set up that internal market. I wonder whether it is still government policy to try to remain within that energy market, which covers gas as well as electricity.
One of the fears of the gas industry on Brexit is about our need for labour mobility. This industry, more than almost all others, depends on the mobility of expertise and the way that it operates. Why should the Minister be confident of keeping that expertise in circulation following Brexit?
Lastly, this statutory instrument mentions the transmission systems operator. Since the electricity brownout during the Summer Recess, there has been a question about conflict of interest and whether National Grid is the right body to remain as the transmission systems operator. Will the Minister comment on this with reference to the gas side of that operation?
My Lords, the noble Lord, Lord Teverson, has raised some very penetrating and expert questions—as one would expect from him—and I will briefly pursue two of them. He referred to our connectors. Of course, most of our interconnectors are for electricity, but there are some important gas connectors. These are part of our gas import scene, which is vastly important, given that domestic onshore gas is not really happening and offshore gas is still not at the level that it was. Post Brexit, will the auction rules on the granting of contracts for developing gas supplies and turbines apply equally to gas that originates inside the EU and comes to us when we are outside it? Remaining in the internal energy market of the European Union would be fine, but it is undergoing considerable stresses and strains—including, notably, the ever-growing appetite of Germany for imported gas, particularly Russian gas, from both existing pipelines and the new Nord Stream, which seems to be going ahead although the Americans oppose it. Will the Minister show a little more of the Government’s hand and their attitude to the internal energy market, which is not working well—it is causing considerable difficulties in eastern and central Europe—and requires a steady hand to ensure that it works for us if we remain in it?
Building on the interventions by the noble Lords, Lord Teverson and Lord Howell, I have a question. The Minister will be aware that gas networks and cross-border supplies are a matter of high politics and security, as well as energy policy. The Russians, in their disputes with Ukraine, frequently threaten to interfere with gas supplies crossing Ukraine. When originally proposed, the new German pipeline that the noble Lord, Lord Howell, referred to, which connects Germany and Russia, was described by Poland and the Baltic states as the economic equivalent of the Ribbentrop-Molotov pact, in that it exposed them and made them vulnerable to discrimination by Russia, to put political pressure on their democracies.
As I understand it, if there was a such a crisis involving Russian gas supplies, we would be protected by the principle of non-discrimination, because we are members of the internal market. In other words, if there was pressure on gas supplies on the continent it would not be legal for suppliers on the continent to turn off the taps to Britain. What will the situation be when we leave the EU: will we have those kinds of legal protections, and will the Minister enlighten us as to what they are?
My Lords, I join the noble Lord, Lord Teverson, in welcoming the Minister to the Dispatch Box. I am sure that in preparing for this SI, looking through the paperwork and the impact assessment, which says there is no significant impact, he might have thought this was a nice, easy one, but the noble Lords, Lord Howell, Lord Teverson and Lord Liddle, have rightly asked further far-reaching questions on the wider issues of energy and gas supply as we move forward. I shall take the Minister back to the start.
The regulations before us deal with the establishment of a network code on harmonised transmission tariff structures for gas, arising from the UK’s withdrawal from the European Union. This issue was debated at length during the debate on the Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019. The Explanatory Memorandum makes it clear that today’s instrument is needed because exit day has been pushed back: it therefore amends those regulations. Will the Minister therefore begin by assuring the House that these regulations do not mark any shift in policy towards the regulatory framework relating to gas?
Looking briefly at how these regulations were laid, I need not remind the House that they would not have been debated and passed until next month had the Supreme Court not announced that Prorogation was invalid. In such a situation, can the Minister be certain that they would have completed their passage before exit day? If not, what would the consequences have been? On the drafting of these regulations, the House will be aware that other regulations need to be amended as a result of the change in exit date. Will the Minister explain why these need to be amended? If this instrument is necessary to make such a small change, will he say why the Government chose to pass this through the affirmative procedure?
More widely, the regulatory framework is an important cornerstone of energy policy, and while the subject has been debated at length, I want to return to one core issue. My noble friend Lord Grantchester has been vocal on the transfer of powers relating to energy policy, particularly on the many responsibilities due to be handed to Ofgem, which has faced budgetary constraints under this Government. Can the Minister say whether any further regulations due to be laid before exit day will transfer any energy powers to UK agencies? Going back to a point made by the three noble Lords who spoke earlier, protecting our energy supply is critical to our safety and security in such difficult and troubling times. I agree with the noble Lord, Lord Teverson, that retention of the petroleum reserves is an issue of national security. Although it does not relate directly to the SI, some words about that from the Minister on behalf of Her Majesty’s Government would be appreciated.
I thank all noble Lords for their participation in this short but none the less instructive debate. I will begin where the noble Lord, Lord McNicol, left off, to answer some of the questions specific to the statutory instrument.
The issue to remember is that because we did not leave on 31 March, the legislation that had been passed at that point as retained law had to incorporate the fact that this piece of EU law was passed on 31 May and therefore became part of EU retained law. The reason we have brought this back now is that there are certain elements of that retained law which would need to be adjusted to be functional after Brexit within domestic law. The changes are relatively modest but none the less critical.
The answer to why it was done via the affirmative procedure is simple: because it has elements in relation to fees. As to whether it represents any shift in our policy, at a fundamental level the answer is no. This is simply a tidying-up exercise, which is modest in its implications but none the less critical to make sure that there is a functioning statute book after Brexit. As to the transfer of powers to Ofgem—it was not in my briefing pack but it is now—in the transfer of powers from the EU regulator ACER to Ofgem, no additional powers are created.
Those are the specific answers to the questions on the statutory instrument. I will now turn to the questions raised by noble Lords and begin, in order, with the noble Lord, Lord Teverson. One of the important things to stress about the market on the island of Ireland is that it is a single electricity market, not a single gas market. The gas does not cross the borders, only the electricity. The UK Government remain fully committed—as do the Irish Government—to ensuring the single electricity market on the island of Ireland. We believe that will be a priority for both Governments to ensure.
There is an interconnector transferring gas from the United Kingdom into the Republic of Ireland and we do not anticipate that that will be affected by any of these issues. The gas market across the EU is a remarkably—I want to use the term without meaning it as a pun—liquid market, but it is a very significant and successful market.
When it comes to interconnectors with the EU, touching on some of the issues raised by the noble Lord, Lord Liddle, we secure only 5% of our gas from the EU. It is a modest amount. Will that be affected by some of the geopolitics on the continent of Europe? We do not anticipate so, but have reserves which will allow us to secure continued use of gas during any such period.
My noble friend Lord Howell raised the wider situation on the continent of Europe. It is important to look at some of the real challenges this creates for the continent, the EU and ourselves. The first thing to stress is that we believe the Nord Stream pipeline is a problematic reality, which is why we are supportive of where Ukraine stands. However, there are also serious issues for the states to the east of the European Union. In this country we are moving swiftly towards decarbonisation but Poland, the Czech Republic, Slovakia and others are presently faced by the impossible devil’s dilemma of having to continue with their indigenous coal reserves being utilised or importing from Russia. Noble Lords can appreciate the dilemma that creates for the EU as it seeks to determine a decarbonised agenda. We have been, as a number of noble Lords have noted, a very liberalising influence in trying to secure the movement going forward to help those countries decarbonise, but it is, as my noble friend Lord Howell correctly stresses, one of the greater challenges faced by the continent today.
We will seek to continue to be participants in the energy markets of the EU. Brexit will have an impact on that and it is very difficult for me to anticipate exactly how we shall continue in that area. For example, one of the issues on which we have been a great leader inside the European Union is emissions trading, where we have sought from a leadership position to encourage the decarbonisation through a market-based regime. Exactly how we will continue to do so after Brexit remains to be determined. Part of the difficulty, with which noble Lords will be very familiar, is that we are unable to begin to negotiate the future relationship until we have established the departure. Some of these questions which rightly should not only be answered now but should have been some time ago have not been answered. On that basis, we cannot do it unanimously and must wait until such time as we can move this forward with the EU after Brexit.
I thank the Minister for giving way. What I am trying to get at here is that the previous Government—the previous Prime Minister and her Ministers—were able to say, “We want to remain a part of the internal energy market. We may not achieve it, but that is our intent”. I am very aware that the present Prime Minister is trying to quite substantially change the political agreement within any withdrawal agreement, and I am trying to determine what government policy relating to this is known. Is the position the same or has it changed?
Let me be very specific: it is the policy of this Government to remain part of the internal energy market. The policy has not changed—for the same reasons, in truth, that applied before. They still apply today.
I will write with a specific answer to the question about petroleum reserves, which might be helpful. It is important to stress that it is government policy to ensure that the reserves are adequate for every eventuality. They must be stress tested necessarily through the challenges that Brexit represents. It is not our ambition to in any way put at risk what those reserves mean for the functioning of the wider energy situation in the United Kingdom. I also stress that we are—primarily in gas, certainly—dependent on imports from outwith the EU as a whole, although not primarily from Russia.
We are talking about gas and not oil reserves. That means gas storage. As we know, our own gas storage system is not all that reliable and has within recent memory gone down quite severely, with devastating effects on short-term gas prices. Are we planning any further storage projects of the kind we have had in the past, or to replace the Rough storage facility in the North Sea as a result of moving into the Brexit situation?
I do not believe that the Brexit situation changes the dynamic of how we approach the wider question of gas storage. We need to make sure that the storage is adequate for any—in fact, every—eventuality. Brexit itself has not changed the policy on that. It will be our intention to ensure that it is not only adequate but able to anticipate whatever challenges come ahead. We will remain committed to that end.
I will not interrupt again. However, I feel that this is a really important national issue. Will the Minister confirm or give us assurance that, following Brexit, the Government will not—immediately or within a short period of time—reduce the amount of petroleum reserves that have to be held in this country?
The Government will ensure that the reserves held are adequate for every eventuality. I suspect that the noble Lord is asking a more fundamental question, which is whether that limit should be set by the EU or follow international standards. Quite clearly, in both instances, it is important for the Government to judge what is right for the United Kingdom. We will do so on that basis.
I think that I have just about tackled all the issues. If I have missed anything out, I am very happy to respond in writing. On that basis, I beg to move.
Statutory Auditors, Third Country Auditors and International Accounts Standards (Amendment) (EU Exit) Regulations 2019
Motion to Approve
It is like I have never been away. Noble Lords will be aware that regulations were laid before Parliament earlier in the year to address deficiencies arising in the fields of accounting and audit from the withdrawal of the United Kingdom from the European Union. They did not implement new policy but granted new powers and responsibilities to the Secretary of State and the Financial Reporting Council. Further regulating adjustments are now required.
The EU accounting and audit directive, together with the EU’s international financial reporting standards regulation—to the extent that they are not repealed—will form part of the retained EU law under the European Union (Withdrawal) Act. The accounting and audit directives set out the requirements on the accounts and audit of most incorporated businesses, as well as a framework of standards. The directives also set out the responsibilities of the competent authorities.
The EU’s international financial reporting standards regulation sets standards for accounting by parent companies of groups. The audit regulation sets additional requirements on the statutory audit of those businesses defined as public interest entities. These are banks, building societies, insurers and issuers of shares or debt securities on regulated markets.
Our aim is to ensure that the framework for accounting and audit regulation works effectively following the UK’s withdrawal from the EU. The statutory instrument under discussion takes some further steps to help facilitate this. With regard to the audit directive, this instrument will ensure that equivalence or adequacy status decisions will be granted by negative resolution regulations. It makes sure that, irrespective of whether a withdrawal agreement is reached, the Secretary of State can make regulations after our exit from the EU to set out the framework for future assessment of equivalence and adequacy by the UK regulator. It will also enable us to grant equivalence and adequacy status to some third countries that have had applications under consideration in the EU during the period since March this year.
This instrument also completes the process of extending powers to the UK’s competent authority, the Financial Reporting Council. It extends the FRC’s ability to regulate third-country auditors to include EEA and Gibraltarian auditors. It also puts beyond doubt that those EEA auditors who have already registered in the UK as statutory auditors will retain that status after exit. The instrument makes an important change to the audit exemption framework. In common with the exemptions in the accounting framework for subsidiaries, the subsidiaries audit exemption will not be available unless the subsidiary has a UK parent. Finally, on audit, the instrument corrects an error in the previous audit statutory instrument affecting the frequency of audit inspections required for auditors of public interest entities.
On accounting standards, the instrument revokes some EU regulations relating to the adoption or amendment of IFRS within the EU. Without revocation, these regulations would be brought into domestic law by the European Union (Withdrawal) Act. However, the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 have already made provision for what will be the international accounting standards for the UK at exit day. These revocations remove any duplication and potential confusion. The revocations here also reflect changes in EU adopted international accounting standards issued or identified since the earlier accounting statutory instruments were made.
What will the impacts be? The Government have carried out a de minimis impact assessment of this instrument as the overall costs to business are anticipated to be small. This confirmed that the additional impact on business of the changes in this instrument is a cost of approximately £930,000 per year. Only limited sectors are affected by each of the changes. This limited impact is counterbalanced by the beneficial effect of the changes in the first audit EU exit statutory instrument, which was assessed as saving businesses approximately £2.96 million per year.
In conclusion, these amendments aim to provide continuity for businesses operating in the audit sector wherever possible and to ensure that UK companies will continue to benefit from global trade and investment. If the UK leaves the EU without an agreement, the measures contained in these regulations will be critical in ensuring that the audit regulatory framework in the UK works effectively. I commend these draft regulations to the House.
Is the Minister able to indicate a little more why it was a de minimis consultation? There has been briefing, but companies that operate on a cross-border basis have to register with the country in the EEA that they will be doing business with. This means that, effectively, there will now be British businesses doing duplicate processes after exit—a UK one and an EU one. These points of principle on the additional burdens on British businesses having to operate in two entities were raised repeatedly during the passage of the Trade Bill. It is even more complex for those in Scotland, where the Minister and I both live, which is under the ICAS registration process. What information does the Minister have about how many British businesses will have to have these dual processes? Why was there no consultation on the regulatory impact on those businesses, which will be a cost to the British economy?
The impact assessment was conducted on a de minimis basis and it established that the cost is £0.93 million—£930,000. I am happy to write further to the noble Lord on this matter to set out exactly how this figure was reached and who is affected by it and will place a copy in the Library.
I thank the Minister for his introduction to this statutory instrument. Before I come to the substance of the policy in these regulations, I highlight the comments made by the House of Lords Secondary Legislation Scrutiny Committee, which said:
“However, the range and magnitude of the changes are significant: the Regulations make changes to 15 items of legislation and include a sub-delegation of powers to UK regulators and extend a ministerial power of direction”.
The committee is right. Despite the utterances in the Explanatory Memorandum that this instrument exists only to continue the framework of the regulatory oversight and professional recognition of statutory auditors and third-country auditors in the UK, concerns have been raised, as we have just heard, that the regulations extend beyond this. The challenges financial services organisations will face in adapting to these changes are numerous, and were also noted by the SLSC. Can the Minister confirm whether any recent support has been offered to such firms to assist them in adapting to the changes?
In the light of such wide-ranging challenges resulting from these regulations, I draw the House’s attention to the fact that one of the core reasons why the other place divided on this instrument was the absence of a full impact assessment. Although I have no intention of similarly dividing this House, I place on record my disappointment that the Government have chosen not to publish an assessment in the period between these regulations being debated in the Commons and today. Parliament needs to be given the full information on the impact that these regulations will have on the financial sector; without such an assessment, that is not the case.
Moving on, I should like to ask the Minister a number of technical questions about the substance of these regulations. I will speak slowly. First, on Regulation 4, which deals with the loss of the EEA subsidiary exemption, can he confirm the timescale for the issues here to take effect? The legislation does not give a specific timeframe for the implementation of this provision, so I can assume only that further regulations may well be necessary. Secondly, in relation to Regulation 6, which focuses on the EEA qualification for auditors and which the Minister touched on, can he guarantee to the House that EEA-qualified auditors recognised up to December 2020 will retain their eligibility? If I missed that in his introductory remarks, my apologies.
To conclude, the way in which this instrument has been progressed, with little assessment and consultation, is deeply disappointing. It is mentioned in the Explanatory Memorandum for the SI, under paragraph 10 on “Consultation outcome”, that there has been no consultation on this instrument, which is deeply worrying. There also seems to be a thread of ambiguity through the regulations, which I hope the Minister can cast aside with assurances today. On this side of the House, we have agreed that the Government should make preparation through secondary legislation to ensure continuity after exit, but I hope the Minister can confirm that future regulations aimed at doing this will take a different approach.
My Lords, I was not planning to intervene, having not read these papers in great detail, but until my noble friend spoke I was not aware that the Government had not carried out an economic assessment of the impact of these changes. On the face of it, this seems rather worrying.
As the Minister will know, there has been considerable controversy over the role of auditors and accountants in the past five years. The competition authorities in Europe have sought to break up the monopoly of the big five, although I am sure they would not put it as crudely as that. In the UK, the Competition Commission has also pursued these questions. There are also big ethical questions about the combination of roles between accounting and audit, which has resulted in some major scandals about the role of auditors.
Are we content that nothing in what we are doing in any way limits the ability of the authorities to pursue the cause of greater competition and greater separation of powers and duties? One of my really big worries about Brexit is that we may be creating a situation in which a close relationship between an industry and a UK ministry results in arrangements that are not in the interests of consumers or shareholders and that work against the public interest.
My Lords, this is quite an exciting issue when you get into it—more so than I anticipated. I will attempt to tackle each of the questions raised in turn. After that, perhaps I may make some general points.
In reference to the points made by the noble Lord, Lord McNicol, the first thing to note is that the passage he quoted refers to the 58th report of that committee and not the 59th. In that report, the committee described the SI as being of interest, but the reports are quite different in the way they tackle the elements themselves. On the noble Lord’s specific points about the EEA auditors losing their exemption and to what timescale, that will happen at the point at which the changes come into force on exit day. Regulations 4 and 7 amend the Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019, which will also come into force on exit day. He asked whether the EEA qualification of auditors will be recognised up to December 2020 and the answer is yes, it will.
I hope noble Lords will bear with me because I am trying to make sure that I give all the answers that they expect. On the question asked by the noble Lord, Lord Liddle, about the implications of this, the impact assessment that was undertaken was able to show that the impact was modest. But the question he asked echoes the points made by the noble Lord, Lord Purvis of Tweed, so if the noble Lord, Lord Purvis, will allow, I will copy him into the answer that I will lodge in the Library. Noble Lords should have all the information that I have. I have no problem with that.
As to the wider philosophical questions of potential conflicts of interest and so forth, I am probably less equipped to answer those specifically. However, the Government will always maintain the highest levels of integrity, as noble Lords would expect. I have no reason to suspect any reason why I should be discomfited by what I am putting forward today, whether there are ethical or indeed wider accountancy considerations. It is not the intention of the Government in any way to create further ambiguity in this, but rather to ensure continuity as we move this matter forward. However, I will take away the issue about consultation, which is useful. I will reflect on that. I would not wish there to be an issue where noble Lords were uneasy because of the absence of information. I want noble Lords to have as much information as I have. I will reflect on that and make sure that in future I am able to bring noble Lords information that might help them.
It would not be the first time that Ministers at the Dispatch Box during consideration of statutory instruments or Brexit-related legislation have said that they will reflect on the lack of consultation. To set my mind at rest on this aspect, what consultation was carried out on this measure with the Institute of Chartered Accountants of Scotland? What consultation was there with the Scottish Government? As the Minister will well know, the implications of this measure affect all parts of the United Kingdom, including those that have distinct history and presents, not just England.
I am happy to write to the noble Lord, Lord Purvis of Tweed, answering each of those questions—if he will permit. Again, I will ensure that the answer is laid in the Library as appropriate.
I use the term “reflect” because it is the only term I can use in this instance. It is not just my own views that might reflect on the wider questions. My view right now is that I do not wish to stand before the House when these questions are raised when the answer is not adequate for noble Lords’ consideration. I wish all noble Lords to be able to see that we have taken every possible measure to assess the correctness of the approach and I want noble Lords to have comfort and confidence that that has been done adequately. I will give a guarantee that I will do that very thing. On that basis, I wish to move forward with the instrument.
Saudi Arabia: Arms Export Licences
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given earlier this morning in another place:
“Today I will be laying a Written Ministerial Statement updating Parliament on the latest situation in relation to the undertaking given to the Court of Appeal on 20 June about export licences to Saudi Arabia and its coalition partners. As the Government informed the court on 16 September and followed up with an affidavit today, my department identified errors that had taken place in the export licensing procedure in relation to the Saudi coalition’s activities in the conflict in Yemen.
As I stated publicly on 16 September, I unreservedly apologise for the export licences that my department issued in error. I have also given my unreserved apologies to the court. A procedure to ensure that export licences were not granted for goods for Saudi Arabia and its coalition partners for possible use in the conflict in Yemen was put in place on 20 June 2019. This followed the court order and the then Secretary of State’s Statement to Parliament.
The Export Control Joint Unit subsequently issued export licences to Saudi Arabia and its coalition partners and, in line with the agreed procedure, these were signed off at official rather than ministerial level. It subsequently came to light that two licences were in breach of the court undertaking and one licence was granted contrary to the Statement in Parliament, as these licences were for goods that could possibly be used in the conflict in Yemen.
Without seeking to prejudge the independent investigation, it appears that information pertaining to the conflict had not been fully shared across government. As soon as the issue was brought to my attention on 12 September, I took immediate action: taking immediate steps to inform the court and Parliament; putting in place immediate, interim procedures to make sure the error could not happen again; instigating a complete and full internal review of all licences granted for Saudi Arabia and its coalition partners since 20 June; and asking the DIT Permanent Secretary to commission, on my behalf, a full internal investigation.
The court and Parliament were informed on 16 September with the appropriate detail. The interim procedures mean senior officials in the DIT, the FCO and the MoD guaranteeing the latest information available to government is used in advice. All recommendations to grant licences for the export of items for Saudi Arabia and its coalition partners will now be referred to Ministers rather than being signed off at official level.
The full review of licences for Saudi Arabia and its coalition partners is currently being undertaken. This internal review is ongoing. As a result of this internal review, we have identified one further licence that has been granted in breach of the undertaking given to the Court of Appeal. The licence has not been used and has now been revoked.
My officials are also carrying out an urgent review of the composition of the coalition. This has identified a further licence which is in breach of the parliamentary Statement. We have reassessed this licence in light of the latest information and subsequently revoked it in so far as it applies to Jordan. My officials continue to review all information relating to licences granted to Saudi Arabia and its coalition partners since 20 June 2019, and we will be open and transparent with the court and Parliament as to any new issues that emerge.
In addition, the DIT Permanent Secretary has commissioned on my behalf a full independent investigation. This will establish the precise circumstances in which these licences were granted, establish whether any other licence has been granted in breach of the undertakings to the court or contrary to the parliamentary Statement and confirm that procedures are in place so that no further breaches of the undertaking can occur. This investigation will be led by an independent senior official, the director-general of policy group, in the Department for Work and Pensions. It is possible that more cases will come to light. As I have done so far, I will keep the court and Parliament informed as to any new information that emerges”.
My Lords, I am grateful to the Minister for repeating that Answer to the Question raised in the other place. I welcome the fact that, in the particular crisis that we are enduring, we can hear the note of contrition, recognition of having done wrong, obeisance to the rule of law and respect for it when wrong decisions have been taken. One can only hope that a wider attitude of such a nature could be evident in all parts of government at this time. It would be wrong for me to ask a question without recognising how much I welcome—and we must all welcome—that note of honesty, integrity and recognition of wrong when it happens.
Of course, it raises the question about the communication that happens between different departments of government, and that too has been addressed. We look forward to further reports as to how those things work out. There has been mention of reviews and investigations. It is therefore frustrating that we have to wait for their outcomes before we ask the really penetrating questions.
However, it would be good if the Minister could give an assurance that, as well as turning up aberrations that have occurred in the past, which we have heard about and which have not yet perhaps reached their conclusion, some attention will be given to how legitimate it is to supply Saudi Arabia, which has committed so many offences against human rights, raised so many questions in the area of appropriate behaviour and is so deeply involved in the internecine struggles in Yemen which have produced the most savage happenings and atrocities that we can imagine, even in the present day. Will some regard continue to be given to the appropriateness of supplying Saudi Arabia with arms and the monitoring that can be done to ensure that those arms are not used in ways that our Government would not want them to be used?
I thank the noble Lord for his questions and comments. Yes, we recognise that there have been mistakes. My right honourable friend the Secretary of State has made it quite clear that she apologises fully for these breaches, and we have every intention of halting them happening again.
The noble Lord linked the issue relating to possible human rights violations. The UK takes all allegations of violations of international humanitarian law extremely seriously. Whenever the UK receives reports of alleged violations of human rights, we routinely seek information from all credible sources—this is important—including from NGOs and international organisations. We regularly raise this issue with our allies in Saudi Arabia and are pleased that they are conducting investigations into any violations that have happened through the group that they have set up.
My Lords, I also welcome the detailed account that the noble Earl has given of the steps that have been, and are being, taken to remedy the circumstances that bring us here today. There is some interest in the notion that the Secretary of State felt it necessary to apologise to the court. Perhaps that might become a policy throughout government. Perhaps the noble Earl might like to reflect the welcome that that has received in this House when next he goes to No. 10 Downing Street.
I guess that the noble Earl has before him the Question that I asked on 4 September and the response from the noble Lord, Lord Ahmad. On that occasion, I asked about the question of export licences and I was assured—I stress again that I am quoting the noble Lord, Lord Ahmad—that,
“we have adhered to the undertaking to grant no new licences”.—[Official Report, 4/9/19; col. 1005.]
It now appears that that statement, which I have no doubt was given in good faith, requires revision.
What is the financial value of arms being exported to Saudi Arabia since 20 June under existing licences? I ask this because the undertaking given to the court only applied to new licences. Relevant to some of the points made by the noble Lord who spoke on behalf of the Labour Party a moment ago is the question of the total amount and total effectiveness of arms originating in United Kingdom and sent to Saudi Arabia, and the use to which they are put.
The noble Lord, Lord Ahmad, said he would write to me. Again, I am sure that that was said in good faith, and I hope that that might now be pursued—perhaps more easily be pursued given the nature of the investigations that are being carried out. However much we welcome the steps that are now being taken, the truth is that this is yet another matter of gross embarrassment for this Government.
I thank the noble Lord for his questions. He raises a number of points in relation to his question to my noble friend Lord Ahmad which, of course, as he rightly says, would have been answered in the greatest of good faith.
Perhaps I should clarify further on the licensing of arms to Saudi Arabia. We have already undertaken not to grant new licences for exports to Saudi Arabia and its coalition partners which might be used in the conflict in Yemen. As the noble Lord is aware, we continue to assess all other export licence applications against the consolidated EU and national arms export licensing criteria. I understand the concerns raised in both Houses and by the department as well that there have been breaches. However, I should reiterate the fact that we have one of the most robust export licensing control systems in the world.
The noble Lord also mentioned the value of arms sales to Saudi Arabia. I am afraid that I do not have that information with me. I will consult with my noble friend Lord Ahmad and colleagues in the department to ensure that the noble Lord gets a response.
My Lords, I too warmly welcome today’s Statement. As the noble Earl will know, the report on Yemen by the International Relations Committee of this House, of which I was then a member, concluded that Her Majesty’s Government were on the wrong side of international humanitarian law in selling arms to Saudi Arabia when there was such a clear risk that they might be used against civilians in Yemen. Is the noble Earl in a position to say a little bit more about what criteria will be used by the Government to determine whether and when this risk has been definitively removed before seeking to renew any export licences on arms sales to Saudi Arabia?
I thank the noble Baroness for her question. I was aware of the report from the committee on this issue. As I said earlier, we are confident that the UK export controls provide a robust means of assessing human rights concerns. Human rights are a core consideration in assessing export licence applications, and we will not now grant that licence as that would be inconsistent with the licensing criteria. These criteria require us to think very hard about the implications of human rights on granting licences.
Perhaps I should just repeat briefly that the interim procedures put in place mean that, on future licences, senior officials in DIT, FCO and the MoD are guaranteeing the latest information available to Government is used in this advice. All recommendations to grant licences for the export of items to Saudi Arabia and its coalition partners will now have to be signed off by Ministers, as opposed to at official level.
My Lords, I have lost count now of the number of times in the last 24 hours we have been told by government Ministers that this Government act lawfully. But four days into this Government, they were not only in breach of a court order that was made in June by granting licences to Saudi Arabia but in breach of undertakings that were given to Parliament. We know now of four instances and we can guarantee there will be more in a relatively short period of time into this Minister’s role.
We are reassured that no further trade is taking place with Saudi Arabia in this respect until this is all sorted out, but in the middle of this the Government invite the Saudi regime to come to the world’s biggest arms fair in London and allow them to look at what we can sell them there, while we are apparently not selling them anything because of their humanitarian failures. The real question here is: why did it take a court order in June that the previous Conservative Government was acting unlawfully to stop arms sales to Saudi Arabia in the face of all their behaviour? Is it the case that this regime can behave just as it likes and it will get the support of this Government in terms of arms sales unless the court says that to give them to them would be unlawful?
My Lords, I cannot agree with the noble Lord. The judgment of the Court of Appeal back in June endorsed the view of the Divisional Court of July 2017 that the processes we have applied were rigorous, robust and multi-layered. The noble Lord is quite right that, regrettably, there were errors in that process, which are very rare. My right honourable friend the Secretary of State has commissioned this independent investigation to ensure that these do not happen again. As the noble Lord has said—he drew attention to humanitarian law—we have undertaken not to grant new licences for exports to Saudi Arabia and its coalition partners for items which might be used in the conflict in Yemen.
Use of Language to Create a Safe Environment
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given earlier today by my right honourable friend in the other place to an Urgent Question asking the Prime Minister to reflect on his language and his role as the Prime Minister. The Statement is as follows:
“British democracy has always been robust and oppositional. This healthy, respectful debate is vital to our democracy. Freedom of speech is, of course, a human right, but it is not an excuse to threaten or abuse anyone whose views you do not agree with. That freedom is compromised when a culture of intimidation forces people out of public life or discourages citizens from engaging in the political process. Let me make it clear, and say with no equivocation, that such abuse is wrong, unacceptable and must be addressed.
I recognise that it is an ongoing challenge—it does not stop after each election. It is important that we tackle this issue and ensure that everyone, no matter their background, can participate in our democracy, free from hatred and intimidation. That is why we are taking action to confront it.
The Government have committed to legislate for a new electoral offence of intimidation of candidates and campaigners in the run-up to an election. We have already made secondary legislation that removes the requirement for candidates standing at local and mayoral elections to have their home addresses published on the ballot paper, and will do the same for GLA Members.
Members across this House have faced threats of violence, attacks on their constituency offices and staff, and abuse aimed at family members. This is abhorrent. I know that honourable and right honourable Members across the House raised this concern yesterday. We want to ensure that people from across the political spectrum can stand for office, free from the fear of intimidation and abuse. We want to tackle this extremely serious issue and protect voters.
The security arrangements for Members of Parliament have been kept under constant review by the Palace of Westminster authorities and the Metropolitan Police’s parliamentary liaison and investigation team, PLAIT. Local forces engage with their MPs and other political figures to meet their security needs. Each force has a single point of contact in place who has contact with PLAIT through regular updates and meetings as required.
The Government are also considering what further steps are necessary to ensure the safety of parliamentarians and their staff. Crucially, this applies not only to Parliament and its vicinity but in constituencies and online. That is why we are also working with social media companies to address threats online and the abuse of MPs, candidates and others in public life in order to create a safe environment for debate”.
That concludes the Answer.
My Lords, I am grateful to the noble Earl, Lord Howe, for repeating the Answer from the House of Commons. Perhaps the Government have put forward the noble Earl to respond today because he has not, I do not think, ever been offensive to anyone in his life. It feels awkward to have to address these questions to him when I am sure that the Statement we heard last night from the Prime Minister was as anathema to him as it was to the rest of us.
I thought that this House conducted itself with honour last night because we united in condemning, with shock and disappointment, the content and the language of the Prime Minister’s Statement. There was no party division at all on that. However, after we left the Chamber last night, it got worse. I have watched some of the debates and I have read others since, and I thought that the Prime Minister’s responses to the questions and concerns raised about the impact of his language and tone were shameful. I am thinking in particular of Paula Sherriff. She was really quite emotional when she stood up and referred to what happened to her friend Jo Cox, the MP who was murdered. The Prime Minister’s response was that it was “humbug”. We deserve better than that. To argue that the way to honour Jo Cox’s memory is to bring in the Brexit that she so opposed was, I thought, tacky and unpleasant. We all have to take care regarding our language and behaviour. Abuse in politics is not new—it did not start with Boris Johnson—but yesterday the Prime Minister sank to a new low.
Those who have been Members of Parliament or advisers, or have had to see members of the public, understand the difference here. It is one thing if someone comes to see them, or sends a letter or email, who is aggressive and abusive because they are distressed or unhappy and they get angry, and there are times when we have robust and perhaps overenthusiastic debates. But what we saw last night was a whole different order. When we see calculated actions and language that are designed to provoke intolerance and division, that is something very different. The words of a Prime Minister carry great weight and can dictate behaviour throughout the country and beyond Parliament.
I listened very carefully to the Statement. It is right that the Government are putting in measures for the security of parliamentarians and their staff, but we have to ask: why is it now that we need those? The level of debate has changed; social media has exacerbated that. So when you open that Pandora’s box of intolerance, or when you try to pitch Parliament against the people, you have lost the moral high ground to seek to heal.
We have two things to ask of ourselves and the Government. They relate to a course that I went on recently, and which we will all be asked to attend: the valuing everyone parliamentary course. One thing said in that course is that unless you call out bad behaviour, you are complicit. My two asks are this: first, that we must be conscious of our own behaviour and language and call out the wrongdoing of others; and, secondly—coming back to this point of not being complicit in bad behaviour—it would be really helpful if our own Government Front Bench in this House were to deliver a message to the Prime Minister that he has a duty and a responsibility as the leader of our country to seek to heal, rather than to exacerbate divisions. If that message went out from our Front Bench, I think this House would feel a lot more comfortable and happier. The Prime Minister has to change.
My Lords, let me comment very briefly on what the noble Baroness has said. I am quite sure that we are all of one mind that it is important for this House to maintain its custom and practice of debate that is sometimes robust but always polite and respectful of the other person’s point of view. I am at one with her in her wish to see that practice spread more widely. It might be helpful if I refer your Lordships to the words of the Speaker in the other place earlier today:
“This country faces the most challenging political issue that we have grappled with in decades. There are genuine, heartfelt, sincerely subscribed to differences of opinion about that matter. Members must be free to express themselves about it and to display … the courage of their convictions. It ought, however, to be possible to disagree agreeably”.
I think that we would all subscribe to that.
My Lords, from these Benches, I too thank the noble Earl for repeating the Statement. When I left the Chamber last night, I went to my daughter’s sixth form college for a talk on how we can support our young people through the difficult teenage years. The talk was about how there will be strong differences of opinions on challenging issues, how parents need to remain the adults in the room and that poor communication will only make the situation worse.
Yesterday, here in Parliament—particularly down the other end, I am sad to say, with the words of our Prime Minister—we saw that the language and tone on the issue of Brexit can have the potential to make the divisions on our streets much worse. There is a real possibility of consequences for people in our divided communities and homes. As the noble Earl has said, in this House we champion the right of people to express strongly their views, and we value challenging debate so that we can tease out the realities of the world we are facing. But the many people who are now tuning in to watch Parliament—many more so than normal—do not need to see parliamentarians stoking the divisions and fear in our communities today. They need to see parliamentarians who believe that tone, language, respect and common decency still matter. Does the Minister agree that, for all parliamentarians, from the Prime Minister down, now is the time to remain the adults in the room?
Yes, I fully agree with everything that the noble Baroness has said. Again, I think that we can cite a good example from our own House on this very set of issues. Earlier this year, the Government published their response to the report by the Committee on Standards in Public Life—so ably chaired at that time by the noble Lord, Lord Bew, and now by the noble Lord, Lord Evans—and have undertaken to take a number of steps arising from its recommendations. These include issuing a public consultation, Protecting the Debate: Intimidation, Influence, and Information; consulting on our Internet Safety Strategy Green Paper—we will publish a DCMS-Home Office White Paper shortly; writing to local authority chief executives to raise awareness about the sensitive interest provisions in the Localism Act 2011; and a lot more. It is important that those strands of work are kept to the fore, particularly if we are to face a general election in the next few weeks or months.
My Lords, as a recent refugee from the other place I was dismayed by the tone of last night’s exchanges. I will, however, make a slightly different point from that of my noble friend. The Prime Minister says that he wants a deal. I hope that he gets one, but to do so he will need to get legislation through both Houses and the support of all sides in both Houses. In addition to my noble friend’s arguments about respect, would it not be politic to tone down the invective in order to build the consensus that the Prime Minister will need to bring this Brexit saga to a satisfactory conclusion?
My noble friend makes, as ever, a very powerful point. However, much of the debate of recent hours has conflated two issues which it is important to distinguish between: strongly felt political opinions on the one hand, and unacceptable, abhorrent acts of abuse, hatred, intimidation and violence on the other. We should keep those two things absolutely distinct in our minds.
Cableway Installations (Amendment) (EU Exit) Regulations 2019
Motion to Approve
My Lords, this instrument is being made under powers conferred by the European Union (Withdrawal) Act 2018 and will give clarity and certainty to industry by fixing deficiencies in two pieces of legislation that will arise when the UK leaves the EU. The first is EU Regulation 2016/424—the “EU regulation”—which is a directly applicable EU regulation. The second is the Cableway Installations Regulations 2018, or SI 2018/816—the “2018 regulations”—which implemented the EU regulation.
Cableways are a mixture of funicular railways and aerial transport systems, such as ski lifts, for the transport of passengers. They are important for tourism and local communities. The majority, around 70, are in snow sports resorts in Scotland. They include chair lifts, surface tow systems, rope tows and passenger transport systems such as the Emirates line in London.
These regulations will not apply to all cableways. Those that entered into service before 1 January 1986 and are classed as historic, cultural or heritage installations, such as the Great Orme Tramway in Wales and the Babbacombe Cliff Railway, are excluded from the scope of the 2018 regulations and the EU regulation.
The 2018 regulations amend the EU regulation designed to harmonise national laws regarding the design and manufacture of cableways equipment to be used in installations designed to carry passengers. The EU regulation is in part directly applicable in the UK, so it forms part of domestic law, and the 2018 regulations supplement the EU regulation where further detail is required. The EU regulation and the 2018 regulations ensure conformity of standards of cableway components across the EU, require the Secretary of State to notify the EU Commission of the notified body responsible for carrying out conformity assessments to ensure that cableway systems, subsystems and their components meet EU harmonised standards, and require the Secretary of State to set rules on the design, construction and entry into service of new cableway installations.
The 2018 regulations and the EU regulation contain a number of elements that will be inappropriate after the UK leaves the European Union. The EU withdrawal Act will retain the EU regulation in its entirety in UK law on exit day. The instrument before your Lordships makes changes that are necessary for the legislation to continue to function correctly after exit day. The majority of the corrections are to amend European Union references and terminology to domestic references, alongside removing requirements to notify matters to the EU Commission.
The most significant change in this instrument is the new power for the Secretary of State to designate standards after exit day. There are no immediate plans or need to exercise this power, but it is sensible to make provision for the future. Until this power is exercised, products that conform to the current EU harmonised standards will continue to be considered compliant with the EU regulation as amended by this instrument. Any introduction of national standards would be subject to full consultation with industry and appropriate technical and safety bodies.
The other significant change is that the definition of “approved body” replaces the definition of “notified body”. The effect is that the Secretary of State can approve bodies to carry out a conformity assessment. This is the process demonstrating whether the essential requirements of the regulation relating to cableway components have been fulfilled. There are no such approved bodies in the UK at present so this will have no immediate practical significance to industry and, as with standards, EU notified bodies will continue to be recognised until such time as there are designated standards and a UK body is approved. The other changes are mostly minor and technical in nature.
In the event that we leave the EU without a deal on 31 October, these regulations are necessary to maintain the status quo after exit day and will ensure the continuity of operations and safety for operators and passengers. The Government’s objective is to avoid uncertainty for cableway operators following exit day, which I hope noble Lords agree is a sensible approach. I beg to move.
My Lords, I was tempted to ask whether this included zipwires, to make sure that people going down them got to the bottom. More importantly, I know from my own family that there are more high-wire facilities in parks and adventure parks. Children go on them above the trees; they are great for exploration and daring. Does this include that type of facility? I should probably have listened to the Minister even more carefully. Who inspects these facilities now? Is it local authorities? How is it done? How are we sure that the regulations, whatever they are, are not just enforced but checked? I suspect that these facilities will increase in number over the years.
I am quite concerned that because pre-1896 cableways are termed cultural, we therefore do not particularly worry about health and safety around them. Perhaps the Minister would like to explain that as well.
My Lords, I thank the Minister for explaining the purposes and objectives of these regulations dealing with the components necessary for the installation of cableways. They seek to establish parallel processes to those in the EU in the event of a no-deal Brexit. Ensuring the safety of cableways is obviously critically important, and we support the instrument’s purpose.
The instrument allows for the Health and Safety Executive and the Health and Safety Executive Northern Ireland to take over the role of enforcement body. As I understand it, the UK Accreditation Service will then ensure that an assessment is made by an approved body so that the components for installation meet the required standard. As the Minister said, the setting of standards in the event of no deal will now sit with the Secretary of State as a new extended power.
I have one or two points that I would like to raise. As the noble Lord, Lord Teverson pointed out, the Explanatory Memorandum refers to the distinction between cableways that entered into service after 1 January 1986 and those that entered into service prior to 1 January 1986, with those entering into service before it classed as historic cultural or heritage installations. What legislation covers these and how does it vary from the 2018 regulations and the directly applicable EU regulation? Indeed, why are the regulations that apply apparently determined only by a cut-off date of 1 January 1986? In other words, is there any great difference in the assessment or the standard that is expected between a cableway that entered into service before 1 January 1986 and one that came into service after that date?
Secondly, the Explanatory Memorandum—and, indeed, the Minister—made reference to conformity assessment bodies, which currently, as the name implies, undertake assessment work. Since I am not clear in my own mind, can she tell us how these bodies are made up? Could she give examples of these bodies, and are there any based in the United Kingdom or are they all based in Europe? I really am not very clear on that point and would be grateful if she could explain that in a bit of further detail, at least for my benefit.
As the Minister has said, the statutory instrument also provides for a regime in the future of approved bodies. It refers to a UK regime being set up to replace the present arrangements. I appreciate that she said that the Government do not intend to go down this road at the moment, but when is it actually envisaged that a UK regime might be introduced? What is the expected cost? Is it intended that it will be self-financing through the fees it charges or will it be expected to make a surplus? Will the fees be higher, lower or the same as now? How long will it actually take physically to set up a UK regime which, presumably, in the event of no deal, will happen at some stage in the future?
The Explanatory Memorandum also makes reference to the current European CE marking procedure. It also states that, in the event of no deal, the CE certification marker will transfer, at least at some stage, to the UK to be replaced by a UK marker. Do the Government then expect the EU to recognise this UK marker? The statutory instrument also states that there will be no divergence from EU standards for the industry to start with. Do the Government expect standards to diverge later on and, if so, why? If not, in some cases at least, how will the UK legislation keep pace with any changes in EU legislation?
As the documentation that we have received indicates, Transport for London and the Scottish snow sports sector have raised concerns about fee-setting and, in the case of the Scottish snow sports sector, current fees. I appreciate that the Government’s answer is that this instrument does not actually deal with or affect the issue of fees, but nevertheless it is referred to in the documentation and the Explanatory Memorandum. What comfort, therefore, can the Government provide on this point about the level of fees now and in the future?
Finally, why are we dealing with this SI only now? We could actually have left the EU with no deal at the end of March, yet we are dealing with this issue only at this stage at the end of September. Is this due to a government oversight, and it should have been dealt with before the end of March? Are there any further Department for Transport SIs relating to a no-deal situation still to be approved by Parliament, apart from the one that follows this?
My Lords, I thank the noble Lords, Lord Teverson and Lord Rosser, for their contributions to this short debate. A number of issues have been raised; I will do my best to respond to them, but if I am not able to in great detail I will happily set out an answer in writing and put a copy in the Library.
I turn first to the issues raised by the noble Lord, Lord Teverson. These regulations do not apply to outdoor, adventure or leisure places. I have to say, I went to one once and will never go again—one hurts afterwards. I think they do not apply because these places do not have actual mechanical structures within them; if they were to do so, the regulations would of course apply.
On the important issue of the distinction between the heritage installations and other installations, I will probably have to write to both noble Lords for a proper understanding of how the date of 1986 was arrived at. I suspect that when the regulations came into place, a number of these cultural and heritage-type organisations tried to make themselves distinct, as is often the case when one is dealing with these sorts of regulations. I will write to the noble Lords on the circumstances of how that happened. In 2014 the department obtained agreement from the member states that our heritage systems could remain exempt from the EU regulations, because they are dated between 1875 and 1974; they are non-commercial but important cultural systems. The legislation which applies to these systems is the Health and Safety at Work etc. Act 1974, so they are inspected under a different regime.
The noble Lord, Lord Rosser, also mentioned the future—what is going to happen. We do not expect any new installations in the short to medium term, and therefore there is no particular rush to be able to have a new system in place, but I will return to that in a minute. He is quite right that the conformity assessment bodies are EU-based and can be used. They will continue to be used if we need them, but at this moment no new installations are expected. However, should that be the case and it looks like new installations will be forthcoming, we will need to look at what a future regime might look like, although we could use the existing regulations.
The noble Lord asked a number of questions around cost, what this might look like and what the fees would be, which I cannot answer because we do not know what the future regime would look like. However, I can say that any future regime would of course be set up only after significant consultation, particularly with the Scottish snow sports industry, on the nature and type of regulation that would be most helpful. Once we have had that consultation, the Secretary of State would then look into what the regulations would look like and how they would be enforced.
On the CE marking, which the noble Lord, Lord Rosser, mentioned, the UK mark will be identical to the CE and based on the regulations as they currently exist. As to whether or not the EU will recognise it, I am not entirely sure that that is wholly relevant, because these will be UK-based installations which will not be moving—they will not be able to go to the EU. People coming here would know that if it had a UK mark at that point it was harmonised with the EU regulations.
The noble Lord, Lord Rosser, mentioned some issues that have been raised over fees. Fees are not covered by this SI. However, it is an interesting issue. I know that the Scottish snow sports industry is disappointed in the level of fees. The reason why they are perhaps higher than the industry would like is because the number of engineers able to do the checks is quite small. However, it plans to increase the number of engineers and we hope that in time the fees will adjust accordingly.
The final point raised by the noble Lord, Lord Rosser, was on the timing and prioritisation of SIs. This SI was deemed to be less a priority than some of the other transport SIs which would have had an immediate impact had the UK left without a deal on 31 March. This establishes the status quo. Nothing changes immediately. The system of regular inspections continues anyway. Forgive me—the noble Lord, Lord Teverson, asked who does the inspections now. The Health and Safety Executive does regular inspections, as one would expect. I do not want to say that this SI was deprioritised, but it came slightly further down the list. Are there any others? Yes, there are—ones that have been deprioritised, but others where EU legislation has changed over previous months. Therefore, others will need to be addressed over time and I am sure they will come before your Lordships shortly.
Passenger and Goods Vehicles (Tachographs) (Amendment etc.) Regulations 2019
Motion to Approve
My Lords, these regulations, if made, will update the existing domestic enforcement regime to cover some technical issues related to the latest version of tachographs. These new smart tachographs are being installed in some vehicles first registered from 15 June 2019. The regulations ensure that certain rules concerning the new tachographs can be fully enforced. They do not affect vehicles using other types of tachograph.
For the benefit of noble Lords who may not be aware, tachographs monitor and record the amount of time a commercial driver has spent driving. Since the 1980s, they have been used in most heavy goods vehicles, many passenger service vehicles and some light goods vehicles. They allow the enforcement of drivers’ hours rules, which are essential to keeping our roads safe. The new smart tachographs are intended primarily to reduce fraud, allow easier enforcement and reduce administrative burdens on drivers through increased automation.
Breaches of drivers’ hours requirements by drivers using vehicles fitted with the new smart tachographs are already covered by existing enforcement provisions. There are also existing rules relevant to new smart tachographs relating to fraud and falsification related to the tachograph equipment itself. However, some provisions already in place for older tachographs need to be updated so that they apply to breaches of the new smart tachograph requirements that have applied from 15 June this year. This is the purpose of these regulations.
The provisions relate to the installation, compliance and use of the new smart tachograph. They sustain the integrity of the tachograph regime, which allows drivers’ hours to be controlled. Drivers’ hours rules set maximum driving times, minimum break and rest times for most commercial drivers, of both lorries and coaches. In practice, the rules mean that after four and a half hours, a driver must take a 45-minute break. Daily driving time is normally limited to nine hours.
The consequences of driving any vehicle when fatigued can be catastrophic and the potential risks associated with heavy commercial vehicles are particularly severe. The rules are enforced by the Driver and Vehicle Standards Agency and the police at targeted roadside checks and by visiting operators’ premises.
The principal tool used by enforcement officers is the record generated by the tachograph. This draft instrument ensures that those who breach the new tachograph requirements face an unlimited fine in England and Wales and a fine not exceeding £5,000 in Scotland. Enforcement officials also have the option of issuing a fixed penalty of £300 or a prohibition notice. This either requires a driver to stop using their vehicle immediately or allows the vehicle to be driven to a different location, with further driving prohibited until the issue is resolved.
This draft instrument also includes provisions that would come into effect at the point of a no-deal Brexit, although it is not a no-deal SI in itself. This draft instrument amends further the changes being made to the Transport Act 1968 on EU exit day by the Drivers’ Hours and Tachographs (Amendment etc.) (EU Exit) Regulations 2019. This instrument therefore includes some amendments to those EU exit regulations. This is to ensure that they operate effectively when brought into force, given the changes this draft instrument makes. I emphasise that this draft instrument is not required because of Brexit. Rather, it updates legal provisions relating to the introduction from 15 June 2019 of new smart tachographs.
The policy area of drivers’ hours is devolved with respect to Northern Ireland. The Northern Irish devolved Administration has prepared equivalent amendments to Northern Irish law.
These rules are at the heart of our road safety regime for commercial vehicles and I am sure noble Lords share my desire to ensure that they can be fully enforced as soon as possible. I beg to move.
My Lords, I was privileged to be in the freight industry for some 20 years and tachographs were always around then, so I think they go back beyond the 1980s. I remember admiring the skill of my staff in looking at the wax discs that were the original tachographs. They could tell just by a glance exactly what that driver had been doing during his or her shift. I welcome, however, the fact that technology moves on here.
I have two questions. I realise that, as the Minister said, this is not a Brexit issue. She rightly emphasises the safety aspect of these regulations. Yet on the political side of the withdrawal agreement, the Government are trying to renegotiate standards in all sorts of ways so they are not tied to European ones. Can the Minister guarantee post Brexit that drivers’ hours will not be lengthened or public safety worsened? That is incredibly important.
The Minister will also be aware that the freight industry has changed hugely over the last 10 years, with e-commerce and the way supply chains and distribution channels work. I guess that the area of safety we are most concerned about is fast-driving white vans and the pressure put on many delivery drivers to meet targets of up to 120 deliveries a day. In my day, that would have been almost impossible. I will be interested to hear the Minister’s comments on how the Government will ensure that the white-van delivery sector is as safe as its elder brother and sister—if you like—such as by bringing the vehicle weight limit down to include tachographs in other categories of vehicles.
I once again thank the Minister for explaining the purpose and effect of these regulations. As has been said, the obligations and requirements in relation to the construction, installation, use, testing and control of tachographs are set out in EU Regulation 165/2014, with the enforcement provisions for these obligations and requirements in the Transport Act 1968 and subsequent regulations made under those provisions.
EU Regulation 165/2014 also provided for detailed provisions relating to new smart tachographs, to be set out in further implementing Acts. Those implementing Acts were adopted via Commission implementation regulation, which came into force on 2 March 2016 and provided for the new smart tachograph requirements to apply in respect of relevant vehicles first registered in member states from 15 June 2019.
As the Minister said, in domestic law, where a vehicle is required to be fitted with a tachograph, that tachograph must have been installed, comply with or be used in accordance with EU Regulation 165/2014, with a person using a vehicle in breach of any one of those requirements having committed an offence. As has been said, these provisions need to be updated so that they may also apply to breaches of the new smart tachograph requirements applicable from 15 June 2019.
I want to raise one query, which may show that I have not really understood the regulations particularly well. Why was this SI not approved prior to 15 June 2019? If the new smart tachograph requirements apply in respect of relevant vehicles first registered in member states from 15 June 2019, and we have not had the enforcement mechanism, does that mean that it has not been possible to take action for breaches of these new smart tachograph requirements in respect of such vehicles in this country? Have I understood that correctly? Could vehicles registered in this country have breached those requirements because the powers were not there to do anything about them? Is that what this is saying, or have I misunderstood, which I accept is quite possible? I would be grateful if the Minister could clear that one up. Obviously, it would be fairly significant if we had been unable to take action in respect of certain vehicles because this SI was not brought forward in time. As I said, I may have misunderstood the documentation that we received.
I also have a couple of other points. In the event of these arrangements coming in, what additional resources, if any, will be provided by the Government to ensure that the new regulations in relation to smart tachographs are actually followed? Will there be a need for additional resources? After Brexit, if the EU expands the types of vehicle that must be fitted with tachographs, will the Government follow suit and adopt those changes to EU regulations?
On my final point, and once again, my information may prove wide of the mark, I understand that the new smart tachographs can communicate remotely with roadside enforcement officers. Has the Driver and Vehicle Standards Agency developed the technology required to remotely monitor data gathered by smart tachographs? I ask that because there are suggestions—I choose that word specifically—that the DVSA has not developed this technology. If that is the case, what is the point of smart tachographs if we do not have the technology to collect the data they create?
I thank both noble Lords for their contributions today. The noble Lord, Lord Teverson, mentioned wax cylinders, which was very interesting; I did not know that they were used in that way. Obviously, tachographs nowadays are incredibly smart and can link into the transport system. They can tell people where vehicles are at any time.
They will make a difference to road safety in our system. The noble Lord also raised the question of standards and whether the Government intend to change the standards for drivers’ hours. We have no intention of changing those standards; we have some of the safest roads in the world and we wish to keep it that way. We believe that we are in a good position at the moment. I take his point about the new type of delivery vehicles that we see, often delivering from companies such as Amazon. There has been an explosive increase in those. We have no plans to introduce tachographs into those vehicles at the current time, because they would significantly increase the weight range of the vehicles covered. However, we are of course working with the employers to do what we can to make sure that those drivers not only have good working conditions but are encouraged to keep the roads safe.
I turn to the points raised by the noble Lord, Lord Rosser, about the timing and powers and whether we have been able to enforce them. This is quite an interesting situation, in that when the European Union introduced this requirement, there was some suggestion that the date might be delayed, as a number of other EU member states and trade associations wanted a delay. They chose not to delay it in the end, but one issue that has now arisen is that there is a supply shortage of these new smart tachographs. This has happened all across the European Union and, therefore, the reality is that not a huge number of these things have been able to be installed because they have not been available. Apparently, there is just one company that makes one component for these tachographs.
What the UK has done is to say that new vehicles that are first registered from 15 June may use the old tachographs. An old tachograph can be put into the vehicle and then, when the new ones are available, they will go in. This has had the effect that the majority of newly registered vehicles still have the traditional—though I assume they are not that traditional—tachographs and these will be switched out when the new ones become available.
I accept that there has been a delay in the timing, which has been caused by the uncertainty over the start date of 15 June and the legal background and context of the SI taking some time to sort out. I reassure the noble Lord that the main reason for these tachographs is drivers’ hours, which are covered under other regulations. The deficiency of powers in this instrument relates simply to not having the new tachographs properly fitted, sealed and calibrated—they have to be calibrated every two years—and using print-out paper that is not approved. Those are the powers that we have not had but will have when this SI has been made. However, we are able to enforce the more significant power on the drivers’ hours as it is.
Is the Minister saying that we could have vehicles that have been first registered since 15 June that only have or choose to operate the new smart tachograph requirements and that, until now, we have not had any statutory means of enforcing the regulations because this SI had not yet been put before Parliament? I appreciate that the noble Baroness has said that the numbers will be very small, but am I right in saying that there could be vehicles running around with the new smart tachographs for which powers do not exist to enforce the requirements, because this has been delayed?
There are certain powers that the Government hope to have, after this SI has been made, which we will then be able to use but the reality is that we are talking about very few tachographs. The second issue is that if the DVSA picks up a contravention, it is unlikely to be much broader in terms of the drivers’ hours. There will be reasons for that. The contraventions that the new powers give us are relatively minor, compared to the really significant ones on drivers’ hours contraventions. I will admit to the noble Lord that there are deficiencies in powers, which is what we are trying to rectify today. However, we already have the most significant powers anyway, and it is unlikely that any particular vehicle would be doing just one of these things. It would probably be doing a number of them, otherwise why would they bother not to have it fitted properly unless they were trying to do something untoward?
The noble Lord, Lord Rosser, mentioned resources. In our opinion, it is likely that no additional resources will be needed on the introduction of these new powers as they will be included in the checks which the DVSA already carries out. It does hundreds of thousands of checks a year; I think it is 200,000. It is incredibly busy in looking at HGVs and making sure that everything is appropriate. The noble Lord also mentioned the technology to monitor the data from the new smart tachographs. Unfortunately, I do not have that information but I will write to him shortly after this debate and give him what information I am able to.
International Climate Action
My Lords, with your permission I will repeat a Statement currently being made in the other place by the Secretary of State for Business, Energy and Industrial Strategy. The Statement is as follows:
“Mr Speaker, I am delighted that my first Statement as the Business and Energy Secretary is on a subject that matters so much to every Member in this House and to every person on this planet. As we heard from a 16 year-old girl, Greta Thunberg, it is vitally important to act now so that our children and grandchildren have a bright future ahead of them. We have only this planet and it is the duty of all of us to do all we can, cross-party and cross-industry, to leave it in a better place than we found it. So today, I would like to make a Statement on the UN Climate Action Summit in New York on Monday of this week.
The Prime Minister and the Secretary of State for International Development joined the UN Secretary-General, world leaders and key figures from business, industry and civil society at the UN Climate Action Summit on Monday. The science is clear about the speed, scale and cost to lives and livelihoods of the climate crisis that is facing us all. Costs show that total global damages from climate-related events were more than $300 billion in 2017 alone and we know that, globally, emissions still continue to rise year on year. And with tragic impact, we also know that the world’s most vulnerable are being hit hardest by the impacts of climate change: natural disasters are already pushing 26 million people a year into poverty, with hundreds of millions of people potentially facing major food shortages in the coming decade. The Prime Minister and other world leaders met because they wanted to take decisive collective action to cut emissions and improve the resilience of countries and communities.
The Prime Minister showed clearly what decisive climate action looks like at home and abroad. In the UK, we have cut emissions by 42% since 1990 while growing the economy by 72%, cutting our use of coal in our electricity system from almost 40% to only 5% in just six years, and leading the world in deployment of clean technologies such as offshore wind. In just one renewable sector, the UK is home to almost half the world’s offshore wind power. We became the first country in the G20 to legislate for net-zero greenhouse gas emissions by 2050 and we already see thousands of jobs being created as part of this transition. Almost 400,000 people are employed in the low-carbon sector and its supply chains, a number that we plan to grow to 2 million by 2030.
We are also playing a critical part on the world stage. In his closing speech, the Prime Minister set out his determination to work together with others to tackle the climate crisis. He called for all countries to increase their 2030 climate ambition pledges under the Paris agreement and confirmed that the UK will play our part by raising our own nationally determined contribution by February next year.
To help developing countries go further and faster, we also committed to double the UK’s international climate finance from £5.8 billion to £11.6 billion over the period 2021-25. This funding will support some of the most vulnerable communities in the world to develop low-carbon technologies and to shift from fossil fuels to clean energy. This will help to replace, for example, wood-burning stoves and kerosene lamps used by millions of the world’s poorest families with sustainable and more reliable technologies like solar power for cooking, heating and lighting.
This new funding will also help protect our incredible rainforests and mangroves, which act as vital carbon sinks, and help restore degraded ecosystems, such as abandoned land, which were once home to forests, mangroves and other precious habitats. So many of us have been glued to David Attenborough’s incredible “Blue Planet” and “Planet Earth” series which really brought home the scale of destruction and the need for global action. Doubling our international climate finance will help those most vulnerable deal with the damaging effects of climate change and become more resilient. It includes support for early warning systems in communities vulnerable to extreme weather events like droughts or floods, giving people vital extra hours, days and even weeks to prepare.
On Monday, as a part of the international climate finance commitment, the Government clearly put technology at the heart of our response with a new £1 billion Ayrton fund to drive forward clean energy innovation in developing countries. The fund is named after the British physicist and suffragette Hertha Ayrton, whose work at the beginning of the 20th century inspired the Ayrton anti-gas fans that saved lives during the First World War. This is new funding that leading scientists and innovators from across the UK and the world can access.
Our Prime Minister was not alone in taking action. We led on the summit’s adaptation and resilience theme with Egypt, and delivered a powerful call to action joined by 112 countries. As part of this we launched a first-of-its-kind Coalition for Climate Resilient Investment to transform infrastructure investment by integrating climate risks into decision-making, ensuring that schools, hospitals and other buildings are built taking into account climate risk. We also launched a new risk-informed early action partnership which will help make 1 billion people safer from disaster by greatly improving early warning systems of such dangerous events as floods and hurricanes. We were delighted that 77 countries, 10 regions and 100 cities committed at the summit to net zero by 2050. We saw the incoming Chilean COP25 presidency announcing a Climate Ambition Alliance of 70 countries, each signalling their intention to submit enhanced climate action plans or nationally determined contributions.
Businesses are also taking action. More than 50 financial institutions pledged to test all of their $2.9 trillion in assets for the risks of climate change. Nine multilateral development banks have committed to support global climate action investments by targeting $175 billion in annual financing by 2025.
The Climate Action Summit was, however, by no means an end in itself. It was a call for global action: one that the UK and many others heeded. But we cannot and will not be complacent. Coming out of the summit, the combined commitments of all those countries and all that good will still does not put us on track to meet the temperature goals of the Paris Agreement. People right across the country and right across the world are every day sending a clear message that we all must go further. As the Secretary-General said, “Time is running out”.
Globally, much more is needed. The UK, as an acknowledged world leader in tackling climate change and as the nominated host for COP26 in 2020, now has a unique opportunity to work with countries and businesses across the world, to build on the foundations laid at this week’s summit, to drive this action agenda forward and to turn the tide of emissions growth. There is no other planet: this is it, and we must look after it”.
My Lords, I thank the Minister for repeating the Statement that has just been given in the other place. Unfortunately, I was not able to get an advance copy of the Statement, so that is something that we could try to work on in the future.
The climate emergency is the greatest danger facing our planet and all its inhabitants. It threatens our livelihoods and our lifestyles, and could soon, if not checked, put our very existence in danger. I am therefore pleased that the international community came together at the United Nations Climate Action Summit to recognise not only the threat that we collectively face, but the immeasurable suffering that is already happening across so many parts of the world. Through increasing temperatures and precipitation, diseases are being spread, homes are being destroyed and infrastructure and services are being disrupted. We should not treat the climate emergency as merely a current threat, but more as an immediate crisis that is currently leading to death and suffering across so many communities. We have only to look at the number and force of recent weather extremes, as extremes that were once a rare, once-in-a-generation occurrence now seem to happen far too regularly. It is important to understand that this can be tackled only through international co-operation. I am, therefore, disappointed by the themes that constantly thread through the Prime Minister’s speech, and indeed those of many of the other world leaders: it was full of empty rhetoric rather than commitment and action.
In the Statement that has just been read, the Minister said:
“Mr Speaker, the Prime Minister and other world leaders met because they wanted to take decisive collective action to cut emissions and to improve the resilience of countries and communities”.
Can the Minister give the House some details about what that decisive collective action is? In the following paragraph—I am not making light of this at all—the Minister rightly mentions that,
“we have cut emissions by 42% since 1990 while growing the economy by 72%”.
The Statement then explains that the cut in emissions from electricity production have come from a reduction in the use of coal from almost 40% to only 5%. Of the 42% overall reduction in emissions, how much is due to the reduction in the use of coal in electricity and power production?
The international community is still a long way from meeting the targets of the Intergovernmental Panel on Climate Change on limiting global warming. It is time to take concrete steps to address this. Some of the world’s largest economies—India, the US and China—are lagging far behind on their commitments, and give little indication of a serious change in direction. While I welcome the Prime Minister’s announcement about furthering our national contributions and efforts relating to international development, I ask the Government also to focus on how the UK economy may be adding to global emissions at home. The UK must urgently invest in green technology to rapidly decarbonise domestically in a way that could usher in a green industrial revolution. We have created some jobs, but creating more jobs and delivering more on this will reduce our carbon emissions at a far greater speed. Looking at the wider world, we must consider how our trade relationships can best be utilised and adapted to minimise emissions and meet those global targets.
As is touched on in the Statement, our planet is facing a grave predicament. I end, therefore, with a warning. The House may be aware that several other world leaders pledged ambitious net zero emissions targets. Many of those nations are smaller states already facing the worst consequences of the climate crisis. The world cannot afford a situation in which nations take emergency actions only when they are in immediate danger. We must all act now and take whatever recourses are possible to end the suffering that many already face. If we do not, the devastating results of volatile weather extremes will wreak havoc, through flooding and wildfire damage. The effects on food production, water availability and public health will be disastrous. The Government, and indeed the international community, must be more ambitious and begin to take action now, by aiming for net zero emissions by 2030.
My Lords, I thank the Minister for repeating the Statement. He has made me feel like a climate criminal because part of his Statement was on replacing wood-burning stoves internationally. I have two of them, I am afraid, but I burn my own wood—it takes three years to dry—and I replace the trees on my very modest property. I hope he will forgive me.
I do not mean this negatively, as everything the Labour Front Bench said was true, but it is easy to sermonise on this stuff. I know this from my own experience: I have solar thermal panels to heat my water; I have wood-burning stoves; and there are various other things that I do. Even I, as an individual, can criticise hugely in terms of the agenda set by Greta Thunberg at that conference. Her speech—my goodness—is not the sort we would make in this place. It was very different—not a politician’s speech—but it was very hard-hitting and absolutely bang on in terms of what we have all managed to do so far. We can congratulate ourselves on our 42% reduction, which is good in terms of other international indices, but we have a long way to go. The Government, since 2015, have lost pace on this, but they have started to pick up again.
I welcome this Statement. I welcome the fact that our Prime Minister went to New York, went to the United Nations, spoke with other people and made this announcement about international aid when, so often within the government party, there is a lot of criticism of how much money we spend abroad as opposed to in the UK, so I give him full credit for that. It is good to hear that the United Kingdom was seen as one of the positive countries trying to push this agenda forward. I also welcome from his Statement a fact we knew already: that we have captured the COP 26 conference, which is at the end of next year. That puts a pressure on all of us as parliamentarians here and at the other end to push that agenda consistently, not just when it is fashionable—over the period at least leading up to 2026. It was being advertised as a joint Italy-UK conference, so I would be interested to understand from the Minister how this will happen.
What representations are the Government making to President Bolsonaro of Brazil about the Amazon—not necessarily in New York, because I understand the Prime Minister’s visit there was cut short for some reason? The President has has made very strong statements that the Amazon is a completely sovereign issue for Brazil. As it is an ex-colonised country, I sort of understand that, but how are we making representations there? I would also like to understand where the money is coming from—I do not mean this negatively. Is this additional money or is it part of the DfID budget? I would be very interested to hear where those funds come from and over what time they will be expended.
Those are my questions, but I want to be positive here. I welcome that we have this emphasis on green growth. I also welcome the commitments made at the Labour Party conference in terms of climate, green growth and green package—we did a similar thing in the Liberal Democrats’ one. What has been quite clear is that, over the last three or four years, this topic has not been very often debated in this House. We now need to make sure that this remains a permanent part of our agenda—and in Parliament generally—over the long term and is not a one-off.
My Lords, I welcome the contribution from both noble Lords. Tackling climate change will be, perhaps, the most significant challenge that we as a planet face. It is important to recognise that there is work to be done at home and abroad. That is why the UN conference in New York was important, because it gave us an opportunity to talk to the wider communities about not just what we want them to do, but how we can demonstrate what we have been doing ourselves. That is how we will make the difference. We have to able to show that we are not just talking the talk but walking the walk.
I will address some of the key issues brought forward by the two speakers, beginning with the noble Lord, Lord McNicol. The commitment made by the Labour Party to reach net zero by 2030 is quite an ambitious claim. We have taken advice from the Committee on Climate Change which says that we can move there by 2050. We would welcome the Labour Party submitting its proposals to the Committee on Climate Change to establish whether indeed they can be realised in that time available. The advice we have just now from that committee is that that is not possible, but we will welcome any information that Labour is able to supply on the functional pathways which have been explored by the Committee on Climate Change.
This is an area in which there is rhetoric all too often. That is why it is important to look at commitments here. We are the first major economy to commit to net zero by 2050, following the advice of the Committee on Climate Change, which has again set out the clear pathways we can follow to achieve that. We have committed to increase our individual commitments to climate change. We have doubled our international climate finance, which is a not insignificant amount of money. We have committed to align all our overseas development aid with the Paris agreement—one of the first major nations to do that. There is clearly much more that we have to do, but that is at least the beginning of the process.
When it comes to international support, our climate finance has so far helped 57 million people cope with the effects of climate change in the adaptation and mitigation sectors. Some 26 million people will have improved access to clean energy; 16 million people have avoided or reduced their greenhouse gas emissions via the funding. We have installed 1,600 megawatts of clean energy capacity. Some £3.8 billion of public finance has been mobilised for climate change. As to where the money comes from, for the declarations we have made it has been new money, coming primarily from taxpayers. It is the commitment of taxpayers themselves that we need to be able to ensure as we go forward. As to what we are doing at home, it is important to recognise that there is a role for government and for individuals. The noble Lord, Lord Teverson, raised wood-burning stoves, which have become very popular. We need to make sure that we address the sustainability issues of these, and the example that he gave suggests that his approach is sustainable.
We are making great headway. As the noble Lord, Lord McNicol, has pointed out, the decarbonisation of energy generation is extraordinary. In a very short period, we have moved towards certain days of the week when no coal is used in the generation of our electricity; that is extraordinary. In some respects, and this is where the gas bridge concept will come in, moving towards lower or lighter hydrocarbons is critical in helping us to decarbonise. This is seen in the Americas, where lighter hydrocarbons are easing out the use of coal. This is the first area in which we have achieved significant decarbonisation.
When we come to the concept of, “Ask not what your country can do for you; ask what you can do for your country”, each household will have to answer particular questions. How well insulated are our homes and roof spaces? Are we moving forward considering the efficiency of different types of boilers? There will come a point when we will ask about the use of gas as a means of providing heat and energy in our homes. We have made substantial progress with the UK car fleet but that is quite modest compared against the journey yet to be taken. That is why we need to think about new technologies and ensure that the prices of the vehicles themselves are within the reach of the ordinary household. There is no point in trying to use a stick when modestly priced cars are not available to take this forward.
I could go on at some length, but I suspect that other questions will reveal some of the answers.
My Lords, I have a practical suggestion for how we can save the Amazon rainforest and similar areas. The international community, through the IMF and the World Bank, should take over a proportion of the government debt of the countries concerned, on the basis that the debt would not be liable to interest nor have to be repaid provided that these areas were conserved. To give a real incentive, the multiple of the value of the commercial exploitation of the rainforests offered would have to be considerable—probably five or even 10 times as much debt as the commercial value. If that were done, countries would have a real incentive to protect and preserve their rainforests.
My Lords, debt cancellation is not a new idea. It has had some currency and traction in the past. It is an area that bears further consideration. Going forward, we should not shy away from looking at it. It would have to be done very carefully. How to address this in the short term might be more challenging.
My Lords, I am happy to congratulate the Government on their achievements so far. This country is a leader—I accept that. However, even if we achieve everything we have said by 2050 and other countries do as well, we will still have a crisis on our hands. Research and development is now going on in a number of research institutes and universities into how we can take these emissions out of the atmosphere. Frankly, without that, we will be in trouble later in this century. As a next step, might the Government consider whether the UK institutions and universities could take a lead on bringing together organisations from a number of countries to start developing some of the techniques that are already known, but are in the very early stages of development, in order to take these carbon gases out of the atmosphere.
The noble Lord is right that the challenge will not be addressed on a global scale even if we were to achieve net zero in this country tomorrow, because we are responsible for around 1% of all climate-related emissions. There is clearly much more to be done by others. The atmospheric sequestration of greenhouse gases is an important area. I am less familiar with research on that, but I will enquire further into it and will write to the noble Lord with my findings. I would certainly hope that every possible avenue can be explored to ensure that we are able to address this global challenge.
My Lords, I too welcome the Minister’s Statement, in particular its acknowledgement of the seriousness of the crisis that we are facing. One of the many tragedies of our current political discourse is the way that it sucks the oxygen out of other debates, including this one, which is, in his words, the most significant challenge that we as a planet face. I also welcome that he said very clearly that the funding referred to is new. It would be a tragedy if this very welcome funding were to detract from the DfID programmes for health, women and education that are so important.
The Statement refers to offshore wind. Does the Minister accept that we are missing a trick in our reluctance to pursue onshore wind opportunities? Internationally, COP26 is a huge opportunity for action, but we also have the CHOGM meeting in Kigali next year. Are there plans to involve the Commonwealth in corporate action? Finally, the Statement speaks about cross-party working. A group of us in this House are committed to finding a way to do that. May I issue an invitation to him, with his new brief, to meet us as soon as possible?
The noble Baroness reminds us again that Brexit seems to consume a lot of the bandwidth. We cannot lose sight of these issues. Long after Brexit is resolved—whichever direction it is resolved in—this will remain a challenge for our country and for all countries.
On the question of onshore and offshore wind, we are certainly global leaders in offshore wind but we need to consider much more carefully the entire renewables sector and how we move it forward. Nothing will be ruled out. We need to be careful as we move forward and, again, every aspect of renewables needs to be considered on its own terms. Offshore wind has been very successful; indeed, pricing in the offshore wind sector has shown a remarkable change in a very short period of time. We are reaching the point now where it is all but self-sustaining, which is an extraordinary achievement given that we anticipated that being a much more distant prospect.
COP26 is an opportunity for this country to focus its attention but there are a number of international meetings. We are on the glide path to COP26 and we have to work out several things. How do we form the right alliances? How do we meet the right people? How do we offer the right advice? How do we engage directly with the right levels of funding? How do we ensure that we are all facing in the same direction? One of the biggest challenges right now is encouraging those countries responsible for some of the more significant current emissions, whether that be the US, China, India or wherever, to meet the net zero target by 2050. It is all very well for me to tell noble Lords that 70 nations have reached that level of commitment; if those 70 nations do not include the principal emitters then, while it is all very interesting to see how they stack up, in truth the impact on the global climate is modest.
The Commonwealth has a vital part to play in this because it represents not just those who can provide the support but those who need the mitigation and adaptation aspects as well. We have a perfect fraternity, if you like, for dialogue about what is most needed and best supported. I would love to come to the cross-party group.
It is generally agreed that new technologies will be essential to hitting these demanding targets. The Minister referred to the areas in which we are global leaders. Indeed, we are leaders in much of the research and technology in areas such as energy storage and the development of batteries, where advanced technology will be required, and carbon capture and storage, where after all we have a national advantage, having extracted oil from the North Sea and thereby having created storage. Is the Minister satisfied that we are giving enough priority to these two areas of research and development?
I am probably going to frighten my officials when I say that I suspect the answer is no. I think we need to be investing significantly in the technologies that are available. We also need to seriously consider how we move those technologies, given the way in which they are already used within the UK and the EU, to countries where they can do the maximum good. Carbon capture utilisation and storage offers us opportunities, if we use these methodologies wisely and carefully, in removing carbon. We have to remember that there are chemical processes—for example, the production of ammonia—where we simply cannot do without carbon dioxide because it is part of the natural chemical equation. We need to find ways of removing the carbon as best we can through those technologies.
Storage must be at the heart of where we go now. The progress that we make on wind will simply be blown away unless we can capture it and hold it in some form of storage. The pump hydro stations that exist in Scotland and Wales are a very useful example of that, and Norway has a significant number of those, but we need to think of other technologies as well, such as battery technologies, to retain that electricity.
We need to be global leaders in this area. In fact, the EU has to be a global leader in this area too, and we should be collaborating strongly through the Horizon programmes to ensure that we remain committed to technologies and ensure that they are available, not just here in Europe but wherever they can do good.
I applaud the Minister’s high productivity today—he must have been up all night—as well as his manner. Would that there were more like him.
I strongly approve, as everyone who has spoken plainly does, of the Government embracing the net zero target. However, as the Minister has made clear in his answers already, finding the pathway to achieving that target is an enormous task. As he says, on the other side of Brexit it will be arguably the single biggest challenge that this country has to face. For instance, the previous Chancellor identified the scale of GDP that will have to be devoted to ensuring that our transport system, the heating of our homes and buildings, and our electricity generation is de-carbonised. It is an enormous challenge. The Government have declared their target. When are they going to set out the framework for achieving it—the multiple pathways which the Minister has referred to—and meeting that ultimate challenge?
The noble Lord is absolutely right: setting a 2050 net zero target is important as a point on the horizon to be reached, but it is the pathways we will take to get there that will be the challenge. He is right again when he reminds us that the Chancellor gave an estimate of how much he thought this might cost this country alone, but it is sometimes more useful to take it down to the level of the individual household. To consider what it will mean, think of a household that has one car and a central heating system using gas, and think of having to move that forward. There are different technologies that we may be able to use to increase the efficiency of the electricity going into the home, but when we begin to talk about the changeover, particularly with vehicles, we are talking about significant individual household investments, and we cannot shy away from that.
One of the greatest dangers we face today is the number of times people conflate the words “electricity” and “energy”. On some days you will hear that we are approaching close to getting 100% of our electricity from renewable sources, but if you put the word “energy” into that, you are absolutely wrong, because our transport system and the way we heat our homes are primarily hydrocarbon based. We are not one small step away, and unless the general public appreciate that, they will wonder why we are not going faster.
The challenge we need to map out is the one that the noble Lord rightly pointed out. Our plan as we approach the glide path to COP26 in Glasgow must be to set out very clearly not only the routes we are seeking to explore, because some need exploration, but the targets and milestones by which we can measure our progress. We must also set out how we can look at that as a means to encourage others to follow in our slipstream. In truth, as I said, if we achieve this ourselves, we will have done little at a global level: we must have others come alongside. Once we have seen the framework, we should probably gather together once again to explore the details of how it might work in reality and to look at the costs, because it will not be without costs, and commitments required from individual households to change their behaviour.
My Lords, like the noble Lord, Lord Teverson, I welcome not only the Statement but the fact that the Prime Minister actually got to New York and had some really good news on that front; I hope he will develop that side of his life. I was impressed that the poorest countries got a mention, especially because that is what our Department for International Development is for, but is it saying enough about this to the general public? Perhaps it needs the Prime Minister to get behind it. This is critical for some of the countries we are supporting, but nobody knows that we are supporting them. Should we be sending more delegations of Members of Parliament to see what is being done? I am not satisfied with that. There was a figure in the press this morning that the sea will rise 10 millimetres per annum by the end of the century. This is a horrifying statistic. Are we doing enough to support those particular countries? Can the Minister say any more about that?
That is an interesting point. How much more can we do using the intellectual resources of Members of this House and the other place to engage directly with countries at the sharper end of climate change? I accept that and I will take it away and give some consideration to how we can use the resources available to us. I think we need to promote more carefully the good work that we do overseas, not just in the area of poverty, which is perhaps better known, but in addressing wider climate change questions. Only by doing that can we ensure that our people retain a strong commitment to the 0.7% of GDP for the millennium development goals. We need to make sure that that is the bedrock on which we build, not a fight that we have to have every single time we look at it because it is simply being eroded.
On the question of the sea level rise, I had a meeting not so long ago with the ambassador of the Maldives. The noble Lord will appreciate that the highest point on the Maldives is actually lower than my height, so its people will experience this very quickly; even at that level of seawater rise, the land will disappear in very short order. We need to consider very carefully how we can help a country such as the Maldives, as well as other island states, which will be very much at the sharpest end of any sea level rise. We also have to accept that it is not just the sea level that is rising but the sea temperature. We will face a lot of challenges. We often talk about global migration issues. We will see that global migration in the water first; we will see it in the seas. The seas around the United Kingdom are shallower—we have the North Sea basin—and we will begin to see our fishing industry experiencing very different kinds of fish, potentially in very short order. We need to be on top of a whole range of issues and we need to be careful to ensure that people understand the challenges we face, not just at home but in supporting the wider global community in this area.
Arrangement of Business
Motion to Adjourn
My Lords, I thank the Chief Whip for announcing that there will be business for next week and for his discussions with us through the course of yesterday and today to ensure that the business that we have was available. In the light of that, I am delighted that I now do not move the amendment standing in my name.
House adjourned at 2.16 pm.