House of Lords
Wednesday 21 October 2020
The House met in a hybrid proceeding.
Prayers—read by the Lord Bishop of London.
Arrangement of Business
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, respecting social distancing, others are participating remotely, but all Members will be treated equally.
Oral Questions will now begin. Please can those asking supplementary questions keep them to no longer than 30 seconds and confined to two points? I ask that Ministers’ answers are also brief.
Network Rail’s Enhancements Pipeline
To ask Her Majesty's Government what is the purpose of the review of rail schemes in Network Rail’s enhancements pipeline; whether that review includes consideration of (1) the viability, and (2) the business case, of each scheme; when the review will be completed; whether the outcome will be published; and whether the High Speed 2 project will be subject to any such review.
My Lords, our flexible pipeline approach to funding rail infrastructure enhancements means that we continually review our portfolio of projects, including the impact of Covid, to ensure that they are making the best use of taxpayers’ money. The High Speed 2 project was subject to a rigorous, independent review this year and was comprehensively reset with a revised budget and schedule.
My Lords, I am grateful to the Minister for that Answer. However, it is now six months since the coronavirus lockdown started. Surely the Government have done some work on demand for travel given the continuing trend for working at home and the likely long-term effect that this might have on rail travel, whether it is commuter services or HS2. Is it not time for the Government to produce some initial thoughts on this?
The noble Lord is quite right that there may well be long-term effects on the way that we travel in the future. However, at the moment, we are at the stage where there are many different forecasts and scenarios. As we continue through the pandemic, no single scenario is coming out as the most likely. However, we will consider the future demand requirements for rail on all the enhancement projects in the pipeline.
Will the Minister appoint me to run Network Rail? I will bring to bear exactly the same skill set: I will lie about the initial cost of projects by a factor of four, just to sucker the Government into approving them; I will deliver them five, 10 or 15 years late; I will let the costs rocket out of control and not care; and I will have a salary of half a million pounds please, which is a big cost saving. Am I suitably qualified?
I am sure that my noble friend would like me to say that I will of course appoint him to lead Network Rail, but, unfortunately, he is going to be disappointed. He slightly underplays the huge developments in recent years as we established the RNEP. It was established only in 2018 and what it tried to do—and indeed does—is to put in one place, open for scrutiny, all the projects that we are considering, whether they are at the initiation, development, design or delivery stage. We provide updates every quarter; that is good transparency and provides for good scrutiny.
The Minister’s noble friend is quite right: Network Rail’s costs are outrageous. Is she aware that, back in 1988, British Rail built a new station at Tutbury on the Derbyshire-Staffordshire border for £80,000? As recently as 1998, Railtrack built four new stations on the Robin Hood line, as well as a new platform and two overbridges, for £5.3 million. Yet Network Rail is now quoting £14 million for a single platform and £22 million for a double-platform station. This is outrageous. Will the Minister tell Network Rail so, and will she tell me how she gets on if she does?
The noble Lord is right to raise the increasing costs of transport infrastructure projects. Noble Lords may know that I have a particular interest in Hammersmith Bridge at the moment. It was built for £10 million in today’s money many, many years ago; you could not get it for that now. I take the noble Lord’s point that we absolutely have to drive down costs. That is part of what we are doing with Network Rail. It is really important that we challenge the costs and make sure that they are as low as possible. If the noble Lord has any evidence that he wants to share with my department and the rail Minister, I would be happy to pass it on.
The noble Lord is quite right, and that is one of the reasons why we have investment periods for both rail and roads. This makes sure that the supply chain knows what is coming down the track, so to speak, and is able to respond accordingly. It also gives it certainty that if a project goes through its stages then it will actually happen. One of the biggest challenges we have had previously has been a lack of certainty that projects will happen. The noble Lord will also know that the spending review has been reduced to one year. However, for some of the long-term plans—for example, CP6 for rail—it will be a multi-year settlement.
The Government’s HS2 six-monthly report to Parliament referred to £800 million of “cost pressures”. I think that is a euphemism for extra costs which will have to be paid for out of the contingency provision, which at this rate will be used up fairly rapidly. Eight hundred million pounds over six months works out at additional costs of just under £4.5 million every day, or £3,000 every minute. We support HS2, but when do the Government intend to get a grip on its costs? Setting up a ministerial task force chaired by the Secretary of State does not sound like much of an answer to that question.
The noble Lord is wrong to extrapolate quite as far as he did. We have a relentless focus on controlling costs. He is right that there are some cost pressures from the preparatory works, but we remain confident that HS2 phase 1 can be built within the target cost of £40.3 billion.
My Lords, I welcome the improvements being made to King’s Cross Station, but does my noble friend accept that on any measure of cost-benefit analysis or impact assessment, HS3, now called Northern Powerhouse Rail, will deliver more in terms of economic benefits to the north of England and the levelling-up programme of this Government that I support? When will it be built?
The Minister mentioned the assessment that happened for HS2, but in Jones Hill Wood there is a protected species of bat; the HS2 organisation does not have a licence and is threatening to cut down the trees anyway. I am sure that the Minister is extremely worried about this breaking of the law. Did all the law-breaking that HS2 is currently doing come into the assessment?
I refer the House to my railway interests declared in the register. Does the Minister agree that electrification has a central part to play in achieving the Government’s value-for-money and decarbonisation agendas, as does the HS2 project? When will the go-ahead be given to completing paused projects, such as the lines to Bristol and Oxford and the Midland main line? What progress is being made in identifying discrete electrification projects on relatively short stretches of main line over hills, where journey times can be saved going uphill and batteries regenerated going downhill?
To answer the first part of the noble Lord’s question, any decision on new or expanded project scopes will be made after the spending review has concluded. On decarbonisation more generally, whether it is uphill or downhill, Network Rail is developing an overarching traction decarbonisation network strategy which will provide strategic advice about which technology—electrification, battery or hydrogen—would be best suited to each section of a decarbonised rail network. This would include individual decisions taking into consideration local conditions and topography, and they would be developed as needed.
My Lords, I want to concentrate on one small scheme that after years of stop and start has reached stage 2, the development stage, of the pipeline: the reinstatement of 11 miles of track between the forlorn single platform and buffer stops at Colne and Skipton. Does this review mean that the Colne-Skipton project has gone back to stock and everything will again be thrown up in the air? When will we be told we can start again?
As the noble Lord has mentioned, that particular project is at stage 2, which is the “develop” stage; it needs to go to “design” and then to “deliver” to be built or reopened. The pipeline is always very ambitious, and it is the case that a project getting into the pipeline does not necessarily mean that it will be delivered—it will depend on the value-for-money and various other considerations over that period. I cannot comment specifically on the Colne-Skipton railway, but it will be reviewed alongside all the other projects. That does not mean that it is going backwards in any process.
My Lords, I declare my interest as a trustee of the Bat Conservation Trust and say to my noble friend on the Front Bench that if she wants more information about the barbastelle bat, I am happy to give it. Does she think, with the benefit of hindsight, that the first phase of HS2 would not have got the green light considering the huge increase in cost and environmental damage in any such review as we are now looking at? [Interruption.]
I am not sure if my noble friend’s dog was asking a question at the same time as him. The Government continually review the value-for-money case for HS2; indeed, it was reviewed fairly recently by Lord Oakervee. The Government are committed to delivering this project.
Pre-trial detention is never considered lightly, my Lords. Numerous safeguards exist to ensure that custody is used appropriately. These safeguards will be maintained and those on remand will still be able to apply for bail even with this extension in place. HMPPS closely monitors prison population forecasts and is committed to always having enough prison places to accommodate those remanded in custody by our courts.
My Lords, the Government tell me that they do not collect data on the number of people held in custody on remand. They now introduce regulations to extend remand to nearly eight months without knowing the numbers. Can the Minister explain how that squares with not knowing how many there are? A key group captured by the new extension is children. Given that about half of them will not get an immediate prison sentence, that 37% of all imprisoned children are on remand, that hardly any education is available to them and that they are in danger of falling into adult criminality, should not the Government make alternative arrangements for this vulnerable group?
My Lords, the latest publicly available data on remand shows that on 30 June this year the remand population was 11,388. All children charged alone should be tried summarily unless the offence is sufficiently grave. Only the most serious youth cases are sent to a Crown Court and therefore involve remand. The department is undertaking a review of the use of custodial remand for children and will look into the drivers for custodial remand and the issues surrounding disproportionality.
My Lords, is the Minister aware that many hundreds of remand prisoners in London prisons are now held for much longer periods than before Covid while waiting for a trial date? Her Majesty’s Prison Pentonville alone has over 400 prisoners waiting for unprecedented periods—of over a year—for their cases to be heard. Can she assure your Lordships’ House that action is being taken to relieve this? If so, what action can we expect?
My Lords, Covid-19 has presented an unprecedented challenge to the criminal justice system. The relevant SI is there exactly to aid the criminal courts during their continued recovery from the pandemic and to help to manage demand while the Crown Court continues to recover.
My Lords, I follow on from the right reverend Prelate’s question. Will the Minister accept that, while aggravated by the Covid crisis, the failure to reduce the trial backlog long predates it? Right now, there are prisoners on remand in custody on serious charges of violence and drug dealing whose trials, which take priority over those on remand on bail, will not happen until late 2021, whereas the trials of those on bail, including on charges of rape, will not take place until late 2022. Rather than go on about the need for more severe sentences, why do we not concentrate on practical measures that get defendants before the courts now so that they can be tried and sentenced on the current law, thus ending the current injustice to both victims and accused?
That is exactly what we are trying to do, and is part of our plan. Court recovery is ongoing. We have opened 200 rooms for jury trials since they were resumed in May, and by the end of October 250 rooms will be open. We have also opened 12 Nightingale courts, with a further four due to open any time now. So far as confidence in the system is concerned—having the right sentences and appeals and court procedures—the sentencing White Paper is looking into those issues.
Many prisoners affected by the increased remand period will be the pawns or modern slaves of drug barons, involved in low-level drug dealing. Will the Minister propose to her colleagues that they adopt the excellent policy of Durham Constabulary and a growing number of other police services which divert such vulnerable individuals to treatment, thus reducing pressure on the courts, saving taxpayers’ money and rescuing lives?
I absolutely agree with the noble Baroness. A lot of what she says is included in the sentencing White Paper. We also have to remember that CTLs are managed very well in magistrates’ courts, which do not have the additional problem of accommodating juries under the current social distancing rules.
My Lords, inevitably, a period of remand is stressful. For some, it is highly stressful and can lead to self-harm. Part of the stress is caused by uncertainty. Many remand periods are already far too long, as other noble Lords have said, and extending remand further by eight weeks will make the uncertainty and mental stress even worse. What planning has been done to minimise self-harm by prisoners held for long periods on remand?
My Lords, the percentage of black youngsters in prison far exceeds their representation in the community. In fact, in some of our women’s prisons it may be as high as 25%. Have the Government undertaken an impact assessment or research to understand how we have created this anomaly?
The impact that the SI will have on the BAME groups—as the noble Lord said, they are disproportionately represented in the remand population—has been carefully considered. To this effect, an equalities impact statement has been undertaken to explore any potential disproportionate effects. This will ensure that the extension is a measured and necessary means of protecting the public and that justice continues to be served.
My Lords, the National Criminal Justice Arts Alliance represents 900 arts organisations that do magnificent work in our prisons and with offenders and ex-offenders. Does my noble friend agree that the pandemic is an opportunity for the Government to engage further with this arts alliance, considering that so many arts organisations are struggling to stay open, and that it could be engaged further to make an impact on some of the issues that noble Lords have already mentioned, such as education and mental health?
My noble friend is absolutely right. I thank him for his work with the National Youth Theatre and Music Masters, which does a lot of work with disadvantaged young people. The alliance has 900 organisations as members, which undertake successful arts projects with both sentenced offenders and those on remand. Covid has curtailed some of its work but we hope that it will get back to working hard in our prisons very soon.
My Lords, all the questions that we have heard put to the Minister reflect the very serious situation that we are seeing in our courts. Both sentenced prisoners and those on remand are spending 23 hours a day in their cells, and noble Lords have drawn attention to an increase in self-harm in both the male and female estates. Does the Minister agree that there should be greater access to telephones and video contact arrangements for prisoners and their families? Of course such arrangements should be appropriately monitored so that no more abuse is perpetuated, but greater contact would help prisoners in their rehabilitation.
My Lords, extended time spent on remand is an inevitable consequence of the extended time in bringing cases to trial due to Covid, which I supported. However, it is a miserable existence, waiting in cells with nothing to do. It is damaging to prisoners’ mental health, especially that of young offenders and, even more especially, young women, as the noble Baroness, Lady Warwick, pointed out. Again, I ask the Minister to say what extra steps are being taken to address their quality of life during these extended periods and to monitor and care for their mental health.
My Lords, I think I have said before that these are very difficult times. We have to look after the health and well-being not only of the staff in our prisons but of the prisoners, whether sentenced or on remand, and we are doing everything we can to keep them safe. However, I absolutely agree that this extended time impacts on some of the extra work that we can do with them because of the need to keep them safe.
EU: Visa-free Short-term Travel Mobility
My Lords, both sides have committed to providing visa-free arrangements for tourists and short-term business visitors. The EU will grant UK nationals visa-free access for short-term visits, subject to reciprocity. This means that UK business visitors and tourists would not need a visa when travelling to the Schengen area for short stays of up to 90 days in every 180-day period. We have announced that we will treat EU citizens as non-visa nationals for the purposes of tourism and holidays after the end of the transition period.
My Lords, this affects not only tourists but those working in the creative industries, including visual artists, writers and musicians who wish to spend informal extended periods abroad. Do the Government agree that it is deeply unfair that British citizens cannot spend a summer or winter in a European country visa-free—indeed, they cannot return for three months—while Europeans can stay in the UK for up to six months at a time? What plans do the Government have to seek a reciprocal agreement on this, considering that the phrase “at least 90 days” in the EU negotiating document is an open door to further negotiation?
My Lords, the noble Earl raises a very important point. The Government certainly recognise the importance of tourism and travel for the creative industries. We set out our position on mode 4 in the approach publication at the start of negotiations and we are committed to seeking protection for exactly the kind of persons the noble Earl refers to.
My Lords, the posted workers’ directive particularly helped our travel business, and some 15,000 UK residents are employed in an EU member state. As the Government will not continue this agreement after December, which risks thousands of jobs, particularly those of young people, will they extend the reciprocal youth mobility scheme, which enables young workers to move between signatory countries to find work for up to two years, and might also help musicians?
My Lords, Michel Barnier has labelled some of the United Kingdom’s proposals as “freedom of movement for service suppliers”. Can the Minister confirm that we are seeking only to lock in, on a reciprocal basis, some arrangements that the United Kingdom already offers to third-country nationals, and that therefore this characterisation is simply wrong?
My Lords, I welcome the noble Baroness to her place. She is exactly right; the comment underlines my point that we are seeking to negotiate arrangements which run very much in the direction that the House is asking for. For example, we are seeking measures on contractual services suppliers who provide services to a client in another jurisdiction. I cannot go through all our mode 4 suggestions, but they are on the table and we very much hope that they will be picked up.
My noble friend the Minister will know that, currently, eligible applicants can work in most jobs under the simplified youth mobility scheme but cannot work as young professional sports coaches unless qualified in the UK. Will he look again at this prohibition so as to encourage young, recently retired international sports men and women to come to this country as coaches to support our elite development pathways after the transition period?
My Lords, according to the government website, UK citizens visiting EU countries from 1 January will have to have at least six months left on their passport, show a return or onward ticket, show they have enough money for their stay, use separate lanes from EU/EEA and Swiss nationals and limit their visit to 90 days in any 180 days. EU citizens travelling to the UK from 1 January do not need to worry about when their passport will expire, show a return or onward ticket, or prove they have enough money for their stay. They can continue to use the e-passport gates at UK airports, as before, and will be able to visit for six months and then come back the next day for another six. Who is really taking back control of our borders, the UK or the EU?
My Lords, conferences and short-term visits as part of international collaboration are engine rooms of scientific discovery. They are vital for exchanging ideas, forming relationships and building careers. I realise that Covid is temporarily suspending some of this activity, but our immigration system must be fit for the future and there is consensus on the long-term benefit of researcher mobility for the UK’s science and innovation sector. So can the Minister please assure me that the Government will seek a light-touch, reciprocal arrangement, allowing researchers in innovations to travel for short, work-related visits, preferably visa free?
Yet again, as other noble Lords in this short exchange have done, my noble friend raises an important point. In negotiations, we are seeking a reciprocal agreement that would bind both parties to agree a list of business activities that could be performed in either party without a work permit on a short-term basis, as she asks. Unfortunately, we are unable to comment on the detail of these arrangements, as discussions are ongoing.
My Lords, the music industry should not be viewed within a silo, nor as a bolt-on afterthought, but as an integral part of traditional business with a Pandora’s box of international engagement needing to be prised open. Given the multidisciplinary importance of performance skills to combine physical presence and future virtual technologies, might a partial approach lie in embracing an innovative online environment to ensure that sectoral infrastructure is developed for this new world in which we find ourselves?
My Lords, the noble Viscount raises an interesting suggestion. The Government recognise the importance of touring for UK musicians, and not only them. I have referred to some areas in which we are continuing efforts to negotiate a better solution, but I assure the noble Viscount and the noble Earl, Lord Clancarty, that musicians are very much in our mind.
My Lords, I am not clear why the Minister’s initial reply was about tourists, because this Question is about people who want to work. The ONS has found that arts, entertainment and recreation, including music, has lost over half its revenue and nearly three in five of its jobs due to Covid. So the hit from Brexit is kicking a sector when it is very down. How are the Government fighting to achieve a multi-entry Schengen visa for people such as musicians, and less bureaucracy for musicians’ instruments than they are set to face—whereas of course they have free movement under existing arrangements?
My Lords, the original Question was about visa-free and short-term travel; tourism is certainly germane to the Question and I am sorry if that was unsatisfactory to the noble Baroness. I have referred to our efforts on short-term visits in relation to business activities. Our offer on mode 4 is extremely generous and we continue to impress on EU negotiators that the agreement we are proposing is very much in their workers’ interests as well as our own.
My Lords, what efforts are Her Majesty’s Government making to ensure that the visa-free short-term travel arrangements will not be used by traffickers to get their victims into the UK, because it looks as though there will be no effective checks at the borders?
My Lords, I draw attention to my registered interests. Does the Minister accept that performing musicians need the facility to travel at short notice to work in other parts of our continent? We are repeatedly told that the soft power of cultural exchanges is the UK’s strongest lever in today’s international world. Why are the Government willing to contemplate a no-deal Brexit which will strangle that influence within the European setting?
My Lords, I have referred more than once to the Government’s efforts to assist short-term activity in the course of the discussions we are having on mode 4. Obviously, movement and activity within different member states is an issue for them and for the EU. I repeat to the House that this is an important area. I believe that we have made generous, important and significant proposals and, as I say, discussions are ongoing.
My Lords, as part of a broad and balanced curriculum, pupils should be taught about how different groups have contributed to the development of Britain. The flexibility within the history curriculum means that there is the opportunity to teach about the United Kingdom’s diverse history across the themes and areas in the curriculum. Events such as Black History Month can support teaching all year round and help schools celebrate the contribution black Britons have made to society.
Does the Minister agree that we can have a truly inclusive 21st-century British patriotism built into our national curriculum, one that is honest about our history: the good—of which there is a lot—the bad and the very ugly? To prepare our children for the global stage and to ensure that they are comfortable with themselves, all students, including those from black, Asian, Roma, Traveller and white working-class communities need to read books with their experiences from our teeming diversity. More than half a million pupils will sit AQA GCSE English literature exams. Sadly, there are no African or Caribbean writers on the syllabus. In Black History Month, will the Minister commit to convening a series of meetings so that we can have an honest dialogue that will review and fantastically reform our national curriculum?
My Lords, I agree with the noble Lord that of course the history and English curricula should reflect the diversity of the population, with teachers being given flexibility in relation to how they teach the curriculum. Obviously, they should take into account the needs of all their pupils. In relation to AQA, for instance, the history curriculum currently includes an option on migration, empires and the people, so there is flexibility for teachers to include texts and periods in modules of history at their discretion.
My Lords, I suspect that the noble Lord, Lord Woolley, was offering something far more radical than the reply we have just received. However, this whole question is like peeling an onion. What plans do the Government have to ensure that those who deliver the national curriculum accurately reflect the diverse population of the land? Secondly, what plans do the Government have to ensure that the training of teachers—taking the noble Lord’s suggestions into the discussion, perhaps—equips them to deliver a properly balanced national curriculum of the kind described by the noble Lord?
My Lords, the requirement is for all schools to deliver a broad and balanced curriculum, and that is what Ofsted inspects against. In order to qualify as a teacher, the person must have satisfied the teaching standard, and the minimum requirement is, obviously, that they understand the needs of the children who they are teaching. However, the noble Lord is correct that the teaching population should reflect the population, and we are pleased that BAME staff increased from 7% to 10% within the teaching staff between 2010 and 2019, but we recognise there is further to go, as, currently, 26% of our students are from black and minority ethnic backgrounds.
For black lives to matter, they need to be reflected in our school curriculum. In the whole of our school history curriculum, there is only one mention of a black person, and that is Mary Seacole in a key stage 2, non-statutory section, where either Mary Seacole and/or Florence Nightingale can be chosen. Can the Minister give an assurance that she will look again at our school syllabus so that it can truly reflect our multicultural country?
My Lords, the suggestions made in the national curriculum are the minimum for schools, and, obviously, we expect them to go beyond that. In relation to key stage 2, it is also suggested that pupils study the experience of Rosa Parks, and, at key stage 3, it is suggested that they learn about the empire. However, of course, there is the flexibility for teachers in the classroom to include all kinds of different people within their teaching.
My Lords, I sympathise very much with what has been said so far, but I have a very specific issue that I wish to raise in the world context. I point to the failure of the national curriculum to include anything about the United Kingdom’s historic links to, and support for, the independence movements throughout South America some 200 years ago. For example and among other things, few people are aware that a British regiment followed Simón Bolívar across the Andes, and I think the name of George Canning, the then Foreign Secretary, is better known in Argentina and, indeed, the wider region, than it is over here. At the time, this led to a lot of British influence and trade and left a legacy of good will.
This becomes important today in the context of links with educational institutions in Latin America and providing a better background for new trade and investment opportunities there. Furthermore, there are now millions of people of Latin American origin living and working in this country, some working here in your Lordships’ House, whose children could benefit from at least an option for Latin American studies, apart from more teaching of the Spanish and Portuguese languages. Can my noble friend give me some hope?
My Lords, I thank my noble friend for her tenacity in raising the profile of Latin America within your Lordships’ House. The flexibility that I have outlined for teachers means that they can include matters surrounding our involvement with Latin America, but, in particular, the suggestion is made at key stage 2 that, when looking at a non-European civilisation, the 10th-century Maya empire should be looked at, so it is included to some extent in the suggestions for the curriculum.
My Lords, if we really want to honour the diverse make-up of our nation, surely we should acknowledge the creative contribution to music, witness pop musicians, rap artists, the Chineke! Orchestra and the Kanneh-Mason family? Most of them could not afford private music lessons and attribute their success to music lessons in schools. Yes, the hubs have done fine work, but they are not a substitute for the ethos of everyday music in schools. Please will the Government consider putting music back on the national curriculum?
My Lords, music is indeed on the national curriculum and is compulsory in maintained schools for children between the ages of five and 14, and they should be offered one subject at GCSE beyond that. However, £500 million has been invested in hubs and other schemes to ensure that young people, particularly from disadvantaged backgrounds, have access to music.
My Lords, is the Minister as shocked as I was that research from Teach First shows that a child can still get through their entire GCSEs without studying a single book by a black author? What is she going to do to change that? Will she consider encouraging a scheme whereby schools get pupils more engaged in selecting books by black authors and topics that reflect black British history?
My Lords, as I have outlined, it is open to teachers, whether they are teaching the national curriculum in maintained schools or in academies, to include literature from a variety of authors. There are suggestions in the national curriculum that they choose authors from black and minority ethnic backgrounds.
My Lords, Black History Month was established 33 years ago, and this year there has been a real desire to find out more about our diverse British history. The year 2020 seems like the beginning of the age of enlightenment, when the shackles were broken and eyes were opened. So how do the Government plan to further that interest? Will they consider broadening exam specification choices to include a wider range of topics that cover our untold history and for exam boards to facilitate this through high-quality resources?
My Lords, yes, as I have outlined, teachers are encouraged to use their flexibility to meet the needs of all the pupils in their classroom and to choose from a diverse range of sources to educate those children in accordance with the context they are living in and the history of this country.
Does the Minister agree that it is essential to understand the genocidal and ecocidal impacts of the British Empire, from the late-Victorian famines, and many others, on the subcontinent, to the destruction of the Australian natural environment and aboriginal societies, recently set out in books such as Dark Emu, if you are to have an understanding of modern economics, ecosystems, societies, international relations—in fact, almost any subject?
My Lords, the value of history in helping us to understand today and to learn from the past is one of the purposes of educating children. The only compulsory element on the national curriculum is the study of the Holocaust but, of course, that leads to teachers being able to talk about wider discrimination and prejudice to avoid such events happening again.
My Lords, I strongly support a curriculum that reflects our diverse history and teaches children our national story, warts and all. But does my noble friend agree that it is profoundly unhistorical to teach and interpret the past entirely through the prism of today’s values, and it is wrong to demonise figures from history simply because they held views which, at the time, were the norm in society?
My Lords, history, of course, is not just events—history can be that of values, principles and mores. I agree with the noble Lord, who I am sure will be reassured that the guidance sent out by DCMS on the controversial issue of statues is to consider those figures in their context and contextualise the involvement of that person in our history.
EU Exit: Negotiations and the Joint Committee
The following Statement was made in the House of Commons on Monday 19 October.
“With your permission, Mr Speaker, I would like to update the House on the Government’s negotiations with the European Union on our future trading relationship and also the work of the UK/EU joint committee established under the withdrawal agreement.
First, on the talks on the new trade agreement, we had hoped to conclude a Canada-style free trade agreement before the transition period ends on 31 December this year but, as things stand, that will not now happen. We remain absolutely committed to securing a Canada-style FTA, but there does need to be a fundamental change in approach from the EU if the process is to get back on track. I have come to the House at the first available opportunity to explain why and how we have reached this point.
We have been clear since the summer that we saw 15 October—last Thursday—as the target date for reaching an agreement with the EU. The Prime Minister and the Commission President Ursula von der Leyen agreed on 3 October that our negotiating team should work intensively to bridge the remaining gaps between us, and we made it clear that we were willing to talk every day. But I have to report to the House that this intensification was not forthcoming. The EU was willing to conduct negotiations only on fewer than half the days available and would not engage on all of the outstanding issues. Moreover, the EU refused to discuss legal texts in any area, as it has done since the summer. Indeed, it is almost incredible to our negotiators that we have reached this point in the negotiations without any common legal texts of any kind.
On 15 October, the EU Heads of State and Government gathered for the European Council. The conclusions of that Council reaffirmed the EU’s original negotiating mandate. They dropped a reference to intensive talks that had been in the draft and they declared that all—all—future moves in the negotiation had to be made by the UK. Although some attempts were made to soften that message by some EU leaders, the European Council reaffirmed those conclusions as authoritative on Friday. That unfortunate sequence of events has, in effect, ended the trade negotiations because it leaves no basis on which we can actually find agreement. There is no point in negotiations proceeding as long as the EU sticks with that position. Such talks would be meaningless and would take us no nearer to finding a workable solution.
That is the situation we now face, and that is why the Prime Minister had to make it clear on 16 October that the EU had refused to negotiate seriously for much of the past month or so. The EU had now, at the European Council, explicitly ruled out a free trade agreement with us, like the one that it has with Canada, and therefore this country should get ready for 1 January 2021 with arrangements that are more like Australia’s, based on simple principles of global free trade.
Now, if the EU wants to change that situation—and I devoutly hope it will—it needs to make a fundamental change in its approach and make clear it has done so. It has to be serious about talking intensively on all issues and trying to reach a conclusion, and I hope it will. But it also needs to accept that it is dealing with an independent and sovereign country now. We have tried to be clear from the start that we would not be able to reach an agreement inconsistent with that status. I do not think that we could be accused of keeping that a secret. Yet the proposals that the EU has discussed with us in recent weeks, which it presents as compromises, are simply not consistent with our new sovereign status—certainly not yet.
While I do not doubt that many on the EU side are well intentioned, we cannot accept the negotiators’ proposals that would require us to provide full, permanent access to our fishing waters, with quotas substantially unchanged to those that were imposed by EU membership. We cannot operate a state aid system which is essentially the same as the EU’s, with great discretion given to the EU to retaliate against us if it thought that we were deviating from it. More broadly, we cannot accept an arrangement that means that we stay in step with laws that have been proposed and adopted by the EU across areas of critical national importance.
In a nutshell, we have been asking for no more than what has been offered in trade agreements to other global trading countries, such as Canada—terms that, of course, the EU said last year it had no difficulty offering to us. We are not even asking for special favours reflecting our 45 years as a member state—during which we paid in every day more than we took out—quite the reverse. But even if this new arrangement is impossible for the EU, I must inform the House that we will be leaving on 31 December on Australian-style terms and trading on the basis of WTO rules.
With just 10 weeks left until the end of the transition period, I have to emphasise that that is not my preferred outcome and nor is it the Prime Minister’s. We recognise that there will be some turbulence, but we have not come so far to falter now, when we are so close to reclaiming our sovereignty. We have to be in control of our own borders and our fishing grounds. We have to set our own laws. We have to be free to thrive as an independent free trading nation, embracing the freedoms that flow as a result. So, it is important that I turn to the preparations that we are now intensifying for the end of the transition period. These apply whether we have a free trade agreement or otherwise, of course.
I am not blithe or blasé about the challenges ahead, particularly given the additional problems that we have dealing with the Covid-19 pandemic. However, leaving the EU on Australian terms is an outcome for which we are increasingly well prepared. Ever since the UK decided it would leave the single market and the customs union on 31 December, Government and businesses alike have been working hard to prepare for the new procedures that were the inevitable result. I congratulate businesses on the resourcefulness they have shown so far. We want to work with them so that they continue responding as energetically, flexibly and imaginatively as possible to the challenges of change. We also want to work with them to prepare for the opportunities ahead, including those stemming from our new free trade deals, such as the agreement with Japan struck by the Secretary of State for International Trade, which, of course, grants us far more favourable access to the world’s third biggest economy than we had as an EU member.
I would like to put on record my particular thanks to the road haulage industry, customs intermediaries and others for their constructive engagement with government, including at our extensive round table last week.
This week, the Prime Minister and I will be speaking again to business leaders to discuss preparations for life outside the EU. We will continue to listen to their concerns, and we will redouble our efforts to help them to adjust and prosper. The XO Cabinet Committee—the EU Exit Operations Committee—meets daily and will intensify its operational focus on business readiness. We continue to work closely with our partners in the devolved Administrations because we want to ensure that every part of the UK is ready for the end of the transition period.
In these final 10 weeks, we are intensifying our public information campaign. Every firm will find the information it needs on new rules which govern trade between Britain and the EU at GOV.UK/transition. Today, HMRC is writing to 200,000 traders that do business with the EU to reinforce their understanding of the new customs and tax rules. We are also putting in place IT systems to help goods flow across borders. We are giving business access to customs professionals to help with new ways of working and we have also planned how to fast-track vital goods in the first few weeks to get around EU bureaucracies. We have already published and indeed updated our border operating model. We have announced £705 million-worth of investment in jobs, infrastructure and technology at the border. We have also strengthened our maritime security to protect our fishing fleets and safeguard our seas.
In addition to the steps we are taking, we are also continuing our work with the EU in the withdrawal agreement joint committee. I would like to update the House on its latest meeting, which took place earlier this morning. Coming only three weeks after the last meeting, I am pleased to report that in this forum the approach from the EU is very constructive. There is a clear imperative on both sides to find solutions and we remain committed to working collaboratively with the EU through the joint committee process.
At our last meeting in Brussels I agreed with my co-chair, Vice-President Šefčovič, that we would intensify discussions to implement the withdrawal agreement, primarily around citizens’ rights and the Northern Ireland protocol. Our officials have since held numerous sessions and today in London I reiterated the UK’s commitment to upholding all our obligations under both the withdrawal agreement and the Belfast agreement. We agreed that we will publish a joint update on citizens’ rights and I am pleased to confirm that almost 4 million EU citizens in the UK have now received status under our scheme. We have also discussed our work to implement the Northern Ireland protocol. We are taking steps to implement new agri-food arrangements. We also acknowledge the EU’s concerns about appropriate monitoring of implementation. We now have a better understanding of its requests and the reasoning behind them. We have confirmed that the specialised committee will work intensively to ensure that we can make progress in this area, and with respect to Gibraltar and the sovereign base issues.
A lot remains to be resolved before the end of December, but we have made substantial progress on implementation. I look forward to further engagement with Vice-President Šefčovič in the weeks ahead. I want to put on record my personal appreciation for the constructive tone and the pragmatic spirit with which he and his team have approached our discussions.
In his statement on Friday, the Prime Minister looked ahead to 2021 as a year of recovery and renewal when this Government will be focused on tackling Covid-19 and building back better. We are getting ready to do now what the British people asked of us: to forge our own path and not to acquiesce to anyone else’s agenda. On the negotiations, our door is not closed. It remains ajar, and I very much hope that the EU will fundamentally change its position, but, come what may, on 31 December, we will take back control. I commend this statement to the House.”
I thank the Minister for returning to the Dispatch Box—apparently unbruised by the government defeat of 226—to defend the Statement and Mr Gove’s words in the other place: that, in any negotiation, both sides have to honour their commitments. Had the Prime Minister done so in respect of the withdrawal agreement, he may not have had to face that defeat.
Yesterday’s headlines were, “Talks break down”. As my right honourable friend Keir Starmer said:
“The collapse of these talks is a sign of Government failure.”
He was in fact responding to the Manchester talks, but it is the story of this Government, who could not negotiate their way out of a paper bag. They boast, threaten and bluster, but fail to reach a consensus with their counterparts. They set deadlines: a deal by July, then September, then mid-October—all missed. They criticise the EU for sticking to its negotiating mandate, but meanwhile boast that they will not move from their own negotiating objectives. It seems it is only the other side, and not ours, that has to move. They criticise the other side for not discussing legal texts, despite the fact that the EU published its 441-page legal text in March but it took until mid-May for us to do the same. Even then, the UK blocked early talks on security co-operation—security: the most important issue on which citizens rely on their Government.
The former Home Secretary and Prime Minister hit the nail on the head on Monday, pointing out that security was not even in the Statement and that, without a deal, law enforcement agencies would have no access to vital databases. I cannot re-enact her mocking response to the extraordinary answer that Mr Gove gave, but I will repeat his words and leave it to your Lordships’ imagination. He claimed that
“we can co-operate more effectively to safeguard our borders outside the European Union than we ever could inside.”—[Official Report, Commons, 19/10/20; col. 761.]
That hardly tallies with the words of the noble Lord, Lord Anderson, who knows a thing or two about security:
“Without the ability to exchange data and intelligence across frontiers, law enforcement will be increasingly unable to cope … Everything from extradition to notification of alerts, crime scene matches and criminal record searches will be much slower, at best.”
Closer to home, Naomi Long, the Northern Ireland Security Minister, stressed the importance of a security partnership with the EU to stop the politicisation of extradition in Northern Ireland, as was the case before the EU arrest warrant.
Mr Gove’s view that we could not possibly, as the price for using EU security systems, also accept its court on the issue of how we use that data seems remarkable for its short-sightedness. Perhaps the Minister can update the House on progress towards a security and data-sharing agreement.
The Government have taken to saying that we had been offered a Canada-style agreement but it is no longer available. In fact, that was never going to happen. The Commission’s February slide on “Geography and trade intensity” never suggested that a carbon copy of CETA was on offer, simply that the same legal form as the FTAs with Canada and South Korea could be used. What is more, the Canada deal contains level playing field measures of the sort the Government now say they will never accept. If they are now willing to go the Canada way, will they also honour the political declaration that the Prime Minister signed and accept a level playing field?
This trade and security deal is too serious for playing games. Last week, 70 business groups, with more than 7 million employees, urged the Government to return to the table to strike a deal. These industries—automotive, aviation, chemicals, farming, pharmaceuticals, tech and financial services—are desperate for their futures and urge a compromise, as this matters greatly for jobs and livelihoods. As they say:
“With compromise and tenacity, a deal can be done.”
Sadly, yesterday’s perfunctory call with Boris Johnson left them disappointed. Some described it as unbelievably disrespectful to the concerns of business. The Prime Minister apparently asked companies to “end the apathy” and get ready, while Mr Gove described our departure as like moving house—a bit of disruption. Of course, it will not be Mr Gove or other Government Ministers who have to cope with a bit of disruption. There will be people losing jobs, consumers paying more for their food, Kent and Anglesey residents finding their roads blocked by lorries and their verges taken up by portaloos, and citizens’ rights at risk. Small business groups have pressed for transition vouchers to pay for extra preparation. I gather that Mr Gove said he would take that back to the Treasury, so perhaps we could know the outcome of that request.
At least they got a meeting. The SMMT did not even get its letter answered. On Monday, there had been no response to its 1 October letter, so perhaps we could be told whether it has now been answered. Meanwhile, the country’s leading transporter of diesel and petrol faces a 4% tariff on the fuel it imports if we do not get a deal. This will affect the industry itself, but it could also mean increased prices at the pumps, possibly up to 3p a litre. The knock-on effects on industry are evident.
Mr Gove was asked by my honourable friend in the other place how much of the £50 million for customs intermediaries had now been drawn down and how many customs agents had been trained. Unfortunately, she got no reply. So, we ask again: how many of the 50,000 will be in place on 1 January?
Finally, what is the status of the Goods Vehicle Movement Service, given that work on its IT system had not even started a few short months ago? The Government stress that businesses need to prepare, but seem unable to demonstrate that they have done their own work. Perhaps we can have an update on that as well.
My Lords, the Chancellor of the Duchy of Lancaster claimed that the UK was “increasingly well prepared” for what he called
“leaving the EU on Australian terms”.—[Official Report, Commons, 19/10/20; col. 756.]
Putting aside the fact that “Australian terms” is just a euphemism for no deal, whereby the UK trades on WTO terms and our exports face tariffs and quotas, the cries of pain from business are audible for all to hear. They are far from having the “high hearts and complete confidence” at the prospect of no deal that the Prime Minister expressed—or indeed at the prospect of the skinny deal that represents the height of government ambition.
The Government have launched a “Time is running out” campaign urging businesses to get ready. But get ready for what? The Government must acknowledge that they are the ones keeping businesses in the dark.
The Road Haulage Association described a meeting with Michael Gove about post-Brexit arrangements last month as “a washout” in which they got “no clarity” on how border checks will operate when the transition period ends. In an interview on Monday, its managing director of policy and public affairs, Rod McKenzie, responding to Mr Gove’s claims, in a Statement, of
“putting in place new IT systems to help goods flow across borders”
“giving business access to customs professionals,”—[Official Report, Commons, 19/10/20; col. 757.]
“It’s a bit of a cheek to say that ... It would be fine to accuse people of having their head in the sand and not having done anything if we knew what we had to do. The problem is the Government has spent not just months, but years, failing to tell the businesses that need to make this work what exactly they have to do…they haven’t prepared the IT systems that will make this work … and they haven’t hired enough customs agents to plough through the mountain of red tape that will be created by this new system.’
Then there is business as a whole. The BBC’s business editor, Simon Jack, tweeted yesterday about how business leaders had described a call with the Prime Minister and Mr Gove as “terrible,”
“unbelievably disrespectful to the concerns of business”
and “more of a lecture”, with the Prime Minister accusing them of “too much apathy”.
There is still no clarity as to what the trading relationship will be. The Government need to acknowledge that business does not have the certainty that it needs. Will the Minster retract the absurd claims that businesses have their head in the sand or are displaying apathy in preparing for Brexit? Will he accept that the Government’s current plan is very far from being “oven ready”, as claimed?
Attentive listeners will detect a bit of a pattern here. It is not just the EU that is getting accused by this Government or their acolytes of being in the wrong. It is business, experts, devolved Governments, mayors, judges, lawyers, the Church, the Civil Service and Parliament—especially, of course, the House of Lords. Gibraltar, Jersey and the Falklands are not exactly brimming with happiness and contentment, either. Perhaps, the Government should examine the mote in their own eye, rather than try to bully, bamboozle and blame everyone else. Their negotiating style has the effect of alienating almost every group they encounter, except, perhaps, rich Tory donors, including Russian ones.
On security, Mr Gove made the truly astonishing claim to the other place on Monday in response to former Prime Minister Theresa May that security would be better outside the EU. Mrs May was seen to mouth “What?” in response to that astonishing and hopelessly untrue claim. The noble Lord, Lord Ricketts, tweeted yesterday:
“If UK loses all access to EU systems from 1 Jan, as looks likely, there is no good Plan B.”
The noble Lord, Lord Anderson of Ipswich, said:
“Without the ability to exchange data and intelligence across frontiers, law enforcement will be increasingly unable to cope. Everything from extradition to notification of alerts, crime scene matches and criminal record searches will be much slower, at best.”
I remind the Minister that these people are experts. Mrs May was the Home Secretary for several years who masterminded the process in 2014 whereby the UK opted to stay in all the important EU law enforcement measures. The noble Lord, Lord Ricketts, is a former National Security Adviser; and the noble Lord, Lord Anderson, is a former independent reviewer of terrorism legislation.
If the Minister wants to tell me now what precisely is the
“variety of methods and arrangements”
whereby the UK
“can co-operate more effectively to safeguard our borders outside the European Union than we ever could inside,”
“can intensify the security that we give to the British people,”—[Official Report, Commons, 19/10/20; col. 761.]
then I am all agog to hear what those measures are. Otherwise, I shall continue to think it is the fantasy it appears to be. The Government need to get real, stop blaming everyone but themselves, stop talking pie in the sky and get on with the negotiations like an adult, not a tiresome toddler.
How does Mr Gove’s claim, in the Statement, of
“the UK’s commitment to upholding all our obligations under both the withdrawal agreement and the Belfast agreement”—[Official Report, Commons, 19/10/20; col. 757.]
sit with the Government’s efforts to get the power to abjure them in the Internal Market Bill, with which this House expressed its severe displeasure yesterday?
Well, My Lords, after listening to the submissions from the noble Baronesses opposite, I must say I warm to the smooth, diplomatic talk of Monsieur Barnier.
I have always respected the Liberal Democrat Party’s consistency and determination to keep, then get back, the UK in the European Union of which they are so fond. But I listened—I strained my ears—to hear some acceptance in the submission from the noble Baroness, Lady Hayter, that the British people had set an objective. She asked what the objective is; it is that set by the British people that the United Kingdom shall be an independent nation, free to set its own laws and proceed with mutual respect alongside our European partners. Not one word in the speeches from the parties opposite recognised that. Instead, I heard a litany of criticism of the stance this Government are taking on behalf of the British people. It was not Project Fear—it was, frankly, project invention. I was immensely disappointed by the tone. I think everybody outside this House should take note of the position of the Labour Party: it supports, in no respect, the efforts of the United Kingdom to secure a good deal, and in every respect, parrots the criticisms that come from the European Union.
This Government are intent on securing a good outcome for the United Kingdom. That outcome is the one I have described. I regret the delays and difficulties that have taken place, which were ascribed by the parties opposite entirely to the United Kingdom. In fact, the European Union was willing to undertake negotiations on fewer than half of the days available, it would not engage on all the outstanding issues and, despite what the noble Baroness, Lady Hayter, said, it has refused to discuss legal text in any area since the summer. It is almost incredible to me that we have reached this point in negotiations without any legal text of any kind. Then, on 15 October, the EU heads of state gathered for the European Council and made the statement they did, and the response from the Prime Minister to that statement was entirely reasonable and predictable in the circumstances.
As my noble friend the Chancellor of the Duchy of Lancaster and others have made clear, this Government are always ready listen to serious approaches, but they have to be serious. This Government will continue to make preparations, as they have done for months, for whichever eventuality arises, whether it is the Australian outcome or, as we would have preferred, the Canada outcome. That work is ongoing. There is engagement with business, as was referred to in the speech of the noble Baroness, Lady Ludford. The Prime Minister and the Chancellor of the Duchy of Lancaster spoke to representatives of business yesterday. Across the board, there are ongoing discussions.
I was asked about the goods vehicle IT; we have discussed that in this House before. We are confident that it is proceeding well. The arrangements for border management have been published and updated.
On security, in the last round, there was discussion of law enforcement, which covered a number of capabilities, including Prüm and mutual legal assistance. Security is of course important, but the whole gamut of relations between us and the European Union is important, and people on both sides have to reflect on how they want to see things go forward. The United Kingdom will adjust to any eventuality.
We note, with interest, that the EU’s negotiator, speaking to the European Parliament this morning, has commented in a significant way on the issues behind the current difficulties in our talks. We are carefully studying what was said, and I can tell the House that my noble friend Lord Frost will discuss the situation when he speaks to Monsieur Barnier later today.
My Lords, we now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief, so that I can call the maximum number of speakers.
My Lords, there is a stark difference between the level of information contained in the statements made by the two sides following the joint committee meeting on Monday. Why is it that this sovereign Parliament gets so much less information than the EU 27 Parliaments and the European Parliament? Will the Minister commit that, going forward, a much greater level of information will be given on meetings of the joint committee and its sub-committees?
My Lords, a Written Ministerial Statement was issued. I am sorry if the noble Earl feels that more could and should be said. I always enjoy my engagements with him. The Statement referred to a number of matters discussed in the joint committee on 19 October. In addition to that, if he wants, I can be more helpful: the committee discussed work on the establishment of a list of individuals to sit on an arbitration panel, as required under the WA. Both parties are progressing work to establish a list of suitable arbitrators. As the noble Earl knows, it was agreed to have a further meeting of the committee in November, and other work will continue in the interim. The discussions are obviously ongoing, and I know that he understands, and I respect that, that there are some constraints on what one can share at a time of active talks.
My Lords, following last week’s EU Council meeting, Angela Merkel said:
“We also acknowledge that the UK would like to have a certain amount of independence”.
I emphasise “a certain amount”. Does the Minister agree that until the EU fully understands and respects the fact that we will have 100% independence, the EU alone will be responsible for the lack of a free trade deal, along with the damage that will do to the economies of many of its member states?
My Lords, of course it is essential that that point is recognised. I have made a practice, since I had the honour of taking on this brief, of not criticising the actions of any EU member state or anybody within the EU, and I shall forbear to comment on what any individual European leader may or may not have said. However, my noble friend is absolutely right that our independence, our right to set our laws, to control our own waters, and all the well-known expectations—not requests or demands—of an independent state need to be recognised by the other party.
My Lords, the Statement very clearly says that this country should get ready for 1 January 2021 on arrangements that are more like Australia’s—in other words, WTO rules. Does the Minister agree with the 71 trade associations and professional bodies—along with the CBI, of which I am president—representing 190,000 businesses and 7 million employees, calling on politicians on both sides to carve a path towards a deal, followed by the European business groups from France, Germany and Italy also calling for smooth trading conditions and a solution? Does he agree that now is the time for compromise and tenacity and that a deal can be done? If there is a deal, there will be a platform on which to build, for security, movement of people and all other parts of our relationship.
Questions and answers should be as brief as possible, please, so that we can get through more people.
My Lords, I apologise to the House if I have infringed. I say then to the noble Lord that, whatever the outcome of the negotiations, the UK is leaving the single market and the customs territory, and everybody will have to make arrangements to act in those circumstances.
My Lords, what a mess we are in. Do the Government accept that they won a large parliamentary majority last December on the basis of an “oven-ready deal” that had two elements? A withdrawal agreement that ditched the Northern Ireland backstop and substituted a customs border in the Irish Sea was the proposal of the British Prime Minister, not the European Union. The second element was a political declaration that set out the terms of the future EU relationship, including clear commitments to a level playing field on state aid, workers’ rights and environmental standards. These inevitably represent constraints on independence. Is it not the case that if we end up with no deal, it is because the Government have gone back on those commitments made in December and put a price on sovereignty that will result in grave economic damage and increased political insecurity for the British people?
No, my Lords, I do not accept the one-sided strictures being heard once again in this House. The Government have proposed arrangements with the European Union that have precedents in agreements that that Union has reached with other countries of the world. The Government have asked for nothing unreasonable.
My Lords, the Government are set on a Canada-style agreement. Have they studied the Canadian network of agreements with the United States, its close neighbour, which cover border controls, aviation, energy, police co-operation, common standards, road haulage and even fishing in the waters along their border? That is because it is a close neighbour. Do the Government have a strategy for somehow increasing the distance between the UK and the European continent? Or do they accept that after 1 January, we will have to start to negotiate on all these other matters as well with our new neighbours?
My Lords, the United Kingdom is a sovereign nation and has relations with every other country in the world. Of course, our relationship with our European neighbours is important and we will continue to negotiate with them, whether in this process or in whatever circumstances we find in the future.
Can my noble friend confirm that EU negotiators have been gently reminded that, if there is no free trade agreement and, regrettably, tariffs are applied to trade in both directions across the channel, the cost to EU exporters will be getting on for three times the cost to UK exporters, because they largely export highly protected goods to us, which we will be able to obtain far more cheaply elsewhere once we are outside the customs union?
[Inaudible.] So can the Minister offer a synopsis of the digital trade outcomes we should expect from negotiations, and confirmation that these are aligned with those in the Japan deal and US negotiations? Can concerns be allayed that many of the just-announced list of trade advisers to the Secretary of State and the DIT are recognised arch-Brexiteers, given the importance of bridge-building to allow continuity in trade with the EU, which is what is urgently required now.
My Lords, I regret that I am not advised on the advisers to DIT; I apologise to the House for that, I was not anticipating that question. I cannot comment on whether they are so-called arch-Brexiteers, but I will respond to the noble Viscount’s question in writing.
My Lords, will my noble friend update the House on what progress has been made in determining who will negotiate with the EU for Northern Ireland, and in what forum, in those circumstances in which the EU proposes changes to the rules of the single market and Northern Ireland is obliged to diverge from the rest of the United Kingdom?
My noble friend asks an important question. Article 15 of the Northern Ireland protocol establishes a joint consultative working group on implementation of the protocol to serve as a forum for the exchange of information and mutual consultation, including the EU informing the UK about planned Union Acts covered by the protocol. The United Kingdom has committed, and I repeat this commitment to my noble friend, to including representatives of the Northern Ireland Executive as part of the UK delegation to that working group.
My Lords, we in this House are trying to help the Government meet their promises to the electorate. In fact, we are doing a “reverse Salisbury”—I thank George Peretz QC for that phrase. I do not understand how a single Tory on the Government Benches can possibly vote against the election manifesto of last year. Can the Minister give details on the issues of environment, animal welfare and workers’ rights? Are we in agreement or disagreement with the EU on them? What are our Government asking for? What is the EU asking for? What blockages are coming from disagreements in the Cabinet?
My Lords, I regret that I found it very difficult to follow the noble Baroness’s question because of the quality of the microphone. I think that at some point she asked about details of the state of play in certain aspects of negotiations, on which I would have to reserve the Government’s position in the normal way. I will examine Hansard, and if there is a way in which I can say anything, I will. I repeat that the Government have been involved in a delicate negotiation; as I told the House, there has been an interesting statement this morning, which we are examining. I reserve the Government’s position.
My Lords, I turn to fishing rights and the rather fraught negotiations surrounding them, where we see President Macron and the French apparently refusing to compromise or give way in any shape or form. Does my noble friend regret, as I do, that some in the media, such as the BBC, and, I regret to say, many politicians who have never reconciled themselves to the vote taken in 2016, are always prepared to side with Monsieur Barnier and the French negotiators on issues such as fishing and are not willing to stand up in any way for British interests as expressed by our negotiators?
My Lords, I agree with my noble friend. I said to the House earlier that I rather heard that in the opening statements from the side opposite. Our position on fishing has been very clear: the waters are the waters of an independent state. We have put propositions on fishing, but the EU has not been prepared to negotiate. Its ask from the start was that life should continue as it was. We are an independent coastal state and whoever it may be—I do not name the BBC—has to recognise that.
My Lords, yesterday’s statement from the Government clearly indicated that it is the intention of the UK and the EU to intensify discussions around the implementation of the withdrawal agreement, particularly around citizens’ rights and the Northern Ireland protocol. How will that happen when it is the Government’s intention to subvert the Northern Ireland protocol through Part 5 of the internal market Bill?
My Lords, that is a false characterisation of Part 5 of the internal market Bill. The Government are not subverting the Northern Ireland protocol; we are acting to implement it. The Government’s proposal, which your Lordships will have to discuss—I do not want to repeat the discussions we had yesterday—is that in certain circumstances we might have to protect our union against interference with free movement in the customs territory. On the joint committee proposals, the statement referred to the meeting that took place recently and the fact that another meeting will take place in November. The record of this Government on citizens’ rights for EU nationals has been outstanding and generous; we and, I understand, the Commission are pressing all member states to reciprocate. I hope very much that that will be the case.
My Lords, as I mentioned at Second Reading of the internal market Bill, people across this country know that we voted to leave and tried to negotiate a mutual and sensible exit in good faith. It seems that the good faith has not been reciprocated. In that regard, does my noble friend share my profound disappointment with the flavour of the EU’s communiqué after last week’s European Council?
My Lords, I stand by the words of the Prime Minister in reaction to that. It was disappointing. I referred to it in my speech yesterday. It seemed to restate the opening position. As we understand it, the communiqué was hardened from the text that was before the Council, which was disappointing. We have expressed our disappointment and set out our position and feelings on the matter. I repeat to the House, because I do not want to make an entirely negative point, that we will carefully study everything that is said by EU representatives. As I have said, there will be further conversations.
My Lords, I turn to customs and tariffs. The definition of goods at risk of onward movement into the EU is a sensitive decision for the joint committee to take. When does my noble friend think it will take that decision? As regards the UK’s listing as an authorised third country for agri-food exports into the EU, what assurances is the EU asking for to proceed with third-country listing of the UK and what assurances have we offered?
My Lords, we are more hopeful. The position on third-country listing was extraordinarily disappointing. The statements and threats made in that respect were unacceptable. Goods at risk is an area of discussion in the appropriate committee. I will not foresee the outcome of those discussions.
My Lords, I congratulate the Minister and noble Lords on all supplementary questions having been asked and answered.
Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020
Motion to Approve
My Lords, I am pleased to introduce the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020 that were laid before the House on 15 September. I am satisfied that the provisions in the regulations are compatible with the European Convention on Human Rights and therefore ask the House to consider these regulations.
The Corporate Insolvency and Governance Act 2020 introduces some important measures, such as a moratorium on creditor action and restructuring tools to give specified corporate entities in financial difficulty the best chance of survival. This is part of a suite of measures to help business weather periods of economic uncertainty. The regulations debated on 14 September ensured that when certain corporate entities obtain a moratorium on creditor action, and the pension scheme trustees or managers are a creditor, the board of the Pension Protection Fund can exercise those creditors’ rights in relation to the moratorium as set out in the regulations, in specified circumstances. The regulations also ensure that when a restructuring is proposed under new measures, in respect of certain corporate entities, and the trustees or managers are a creditor to whom the restructuring is proposed, the board of the Pension Protection Fund can exercise the trustees’ creditors’ rights under the new restructuring measures, that way ensuring that pension schemes are not left without the appropriate protections in the legislation.
The regulations being debated today simply extend the Pension Protection Fund’s creditors’ rights to certain other corporate entities: relevant co-operative and community benefit schemes in the case of the moratorium, and relevant societies in the case of the restructuring provisions. The regulations also revoke a previous set of regulations because of a legal defect caused by an omission in a related statutory instrument. We have expedited the making and laying of these regulations in order to rectify the situation. The “made affirmative” procedure has enabled these regulations to come into force soon after they were laid.
These regulations form part of the corporate insolvency and governance legislative regime. If a relevant co-operative and community benefit society obtains a moratorium from its creditors, or a restructuring is proposed in respect of a relevant society as applicable, the Pension Protection Fund is able to intervene as a creditor to protect its interest in the relevant specified circumstances.
Moratoriums give companies and other relevant corporate entities respite from action that could otherwise cause them to close. During a moratorium, businesses will be more able to plan a beneficial restructure; this will reduce unnecessary business failures, thereby preserving jobs and value in the economy. Restructuring plans enable companies with viable businesses but significant debts to restructure with limited disruption. This will facilitate corporate rescue and reduce formal, value-destructive insolvencies, thereby preserving businesses and saving jobs.
Given the importance of the Pension Protection Fund as the statutory compensation scheme, it is crucial for the Pension Protection Fund to have access to and influence over certain decisions relating to moratoriums and recovery plans in the relevant circumstances. Should a rescue attempt fail, it is the Pension Protection Fund that steps in to pay compensation to eligible pension scheme members. Protecting the fund’s interest should help maintain confidence that the Pension Protection Fund will be able to continue to make compensation payments for as long as they are needed.
I would like to put on record something about the previous PPF regulations that we debated on 14 September: they have no impact, or no effect, on the regulations we are debating today. I am aware that there has been some concern about the legal status of the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020, which were debated on 14 September, in so far as they relate to charitable incorporated organisations. The current legal position in respect of charitable incorporated organisations has been complicated by the making of a separate statutory instrument, the Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020, by the Department for Digital, Culture, Media and Sport. Those regulations disapplied some of the new provisions of the Insolvency Act 1986 in relation to charitable incorporated organisations. One of these provisions, Section A51 of the Corporate Insolvency and Governance Act 2020, was used to make my department’s regulations, the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020, in so far as they applied to charitable incorporated organisations. As a result, the provisions in my department’s regulations have not applied to charitable incorporated organisations since 13 August 2020, that being the date the Department for Digital, Culture, Media and Sport regulations came into force.
The legal position, which is clear from reading both sets of regulations together, is that the Department for Digital, Culture, Media and Sport regulations repeal impliedly those aspects of my department’s regulations, in so far as they apply to charitable incorporated organisations. The Department for Digital, Culture, Media and Sport will restore the position as set out in my department’s regulations at the next available opportunity. The Department for Digital, Culture, Media and Sport regulations do not otherwise affect the validity of my department’s regulations, or the powers that we use to make those regulations. I commend these regulations to the House.
My Lords, I welcome these regulations, because they give the PPF the ability to exercise creditor rights across the full range of employers in moratoriums and restructuring plans where there is a PPF-eligible DB pension scheme.
There have not yet been any cases where a moratorium has been implemented for a business with an eligible scheme, so we have no case studies to judge how these measures are working in practice, including the potential for gaming that the new system introduced under the Corporate Insolvency and Governance Act. The Government did amend the Act to give the Secretary of State powers to amend the regulations in response to the emergence of perverse behaviours, but I want to pursue an issue which I raised at the time and which was never really answered.
The Corporate Insolvency and Governance Act and these regulations sit alongside the Pension Schemes Bill, which is currently in the Commons. Clause 107 of that Bill introduces new criminal offences if the conduct of employers and other persons, and entities such as banks, trustees and advisers, has a detrimental effect on the schemes such as the avoidance of the recovery of the whole or any part of the employer’s debt. That opens up the possibility that what may be considered lawful actions under the Corporate Insolvency and Governance Act could subsequently be considered offences under the Pension Schemes Bill. If a moratorium takes place and a restructuring plan or insolvency follows, the pension scheme’s positions will be weakened relative to some other creditors because the scheme’s full Section 75 debt is not triggered, and unsecured finance debt has super-priority status, outranking the pension fund debt and outranking pension liabilities in subsequent insolvency. That finance debt includes shareholder loans, inter-company loans—including from a director or parent company—as well as arm’s-length regulated activities and bank debts. During a moratorium, those financial debts continue to be payable, but pension deficit contributions do not. Therefore there remains a real risk of novel forms of moral hazard including, as the noble Baroness, Lady Bowles of Berkhamsted, observed in this House on 23 June, when commenting on the poor behaviours that could occur,
“behaviour that is reprehensible but not, in the end, prohibited or even limited to reasonable amounts.”—[Official Report, 23/6/20; col. 138.]
A moratorium will become the point at which discussions about a restructuring deal begin, and will involve trade-offs. If the PPF or the Pensions Regulator considers either at the time or subsequently that an aim of an employer, parent company or other parties in seeking a moratorium and subsequent insolvency or restructuring plan was the avoidance of the employer’s debt, which legislation takes precedence, the Corporate Insolvency and Governance Act or the new Pension Schemes Bill? Would the regulator be able to use its enhanced powers to acquire information over and above that sent out to creditors during a moratorium? What would be the implications for any super-priority status granted or restructuring plan agreed or proposed where such a challenge by the regulator was made? Any clarity the Minister can provide will be helpful.
My Lords, I welcome the new regulations to ensure that the Pension Protection Fund can better protect its interests and those of pension scheme members whose supporting employers unfortunately need to enter a moratorium period or restructuring due to the current crisis. These cover the entities, including charitable organisations, friendly societies, credit unions and so on, which may be particularly vulnerable in the current circumstances.
The Pension Protection Fund is one of our flagship organisations, which has done marvellous work to protect the pensions of millions in this country and has compensated those who would otherwise have faced the potential of losing their pension rights if the employer failed, and possibly of losing their jobs too. It is vital that employers and corporate directors are not allowed to game the PPF or take advantage of financial turmoil to walk away from liabilities on which so many ordinary workers rely, as the noble Baroness, Lady Drake, just said. I congratulate the PPF and put on record that I believe its staff have done brilliant work. I am sure that they will continue to do so with efficient administration and careful stewardship.
These regulations result from new measures passed in the Corporate Insolvency and Governance Act, which potentially weaken the rights of DB scheme members, trustees and managers to funds and assets belonging to the sponsoring employer during a moratorium or restructuring. I thank my noble friend and congratulate her on the way in which she introduced the regulations.
To allow the Pension Protection Fund to represent the trustees and managers in negotiations is an important measure, since it has to safeguard the interests not only of each pension scheme but of all other schemes too, and a moratorium does not trigger a PPF assessment period. If pension sponsors can more easily find ways to walk away from their liabilities without putting extra funds into the schemes in the current crisis, because it ranks only as an ordinary unsecured creditor without super-priority, and financial firms have leap-frogged up the priority order, the Pension Protection Fund could be forced to take on extra liabilities, which will ultimately fall on other sponsors via higher levy payments. As I expressed during the passage of the Act, I am particularly concerned at the ability of the sponsor or its other creditors to ask the courts to release assets that were supposed to have been pledged to the pension scheme as part of previous scheme-specific funding arrangements, leaving the scheme far more underfunded than was ever intended. I understand that the legislation ensures that any restructuring plan must not put creditors in a worse position than on insolvency, but can my noble friend confirm that this also definitely applies to the Pension Protection Fund? If she would like to write to me on my point, that will be fine. In addition, which parts of the previous regulations that she mentioned in her introduction have been revoked by this instrument?
Finally, I will ask a few other questions of which I have given my noble friend prior notice. I note that the Pension Protection Fund will produce guidance for monitors and directors on what information it will need to receive and its general approach to a moratorium or restructuring. When will that happen? Can she confirm the assessment of the noble Baroness, Lady Drake, that no companies have yet gone into moratorium since this legislation was passed, and if any have, how many have done so and how many have a DB scheme attached?
The noble Baroness, Lady Greengross, and the noble Lord, Lord McColl, have withdrawn, so I call the noble Lord, Lord Hain.
My Lords, it is a real pleasure to follow my noble friend Lady Drake and the noble Baroness, Lady Altmann, who speak with tremendous authority on these pensions-related questions.
The Government’s insolvency reforms initially applied only to companies. They have now been extended to cover co-operative societies and community benefit societies such as credit unions, following lobbying, in particular by Co-operatives UK. So far, so good. Co-op retail societies have been doing well, with sales booming and market share rising, but some other smaller co-operatives have had to close for a few months or furlough staff.
In its efforts to modify measures originally designed for companies, Co-operatives UK gave priority to preserving co-operative and community purpose and to retaining democratic member control. I strongly applaud those efforts. I acknowledge too its September 2020 guidance to co-op societies facing financial strife, a 10-page brief on insolvency and financial liquidity that offers advice on how to respond to a crisis and how, in the worst case, to face up to a possible insolvency. However, I fear that those 10 pages of well-intended advice to co-op societies facing financial distress illustrate the shocking way in which workers’ rights are overlooked when businesses in Britain face going bust.
The opening paragraphs on page 1 of the guidance acknowledge that directors of co-op societies facing insolvency have a duty of care to the society’s creditors. When businesses face insolvency, the interests of creditors, especially those with secured debts, often and maybe always override those of employees. Witness what happens when companies in financial distress stay in business but use a “compromise agreement” to avoid meeting their obligations to the firm’s pension scheme. Only later does the Co-operatives UK brief say that only if there is no imminent threat of insolvency should directors
“Put employees and volunteers first”.
Sadly, even then the brief does not suggest consulting employees about the choice between furlough or redundancy. It recommends talking to workers about other options such as reducing pay and working hours only after big decisions have been taken.
The very last point at the foot of the final page of the brief covers good practice with employees. It says that
“looking after employees at a time of crisis is crucial”,
and refers to four pages of further advice, none of which covers possible insolvency. So there is no discussion of the possible threat to employees’ pension rights when businesses face insolvency, no mention of underfunded pension schemes, nothing about redundancy rights or unpaid wages, and nothing about unmet tax and national insurance obligations. That is a perfect illustration, sadly, of where workers stand when businesses face going bust: little more than an afterthought. But I do not blame Co-operatives UK: its brief simply reflects the sad reality of workers’ rights and the unfairnesses of Britain’s insolvency law.
Millions of jobs are in jeopardy today, in every sector of the economy, and it remains all too easy for directors of businesses facing financial distress to sacrifice the interests of the workforce by sidestepping their responsibilities for pay, redundancy, tax, national insurance and pensions. Despite the warm words we had during the passage of the insolvency Bill in the summer, the Government’s reforms have yet to address that fundamental flaw. Can the Minister give me any assurances about that, please?
My Lords, I thank my noble friend for introducing this debate on this corrected statutory instrument, which puts right a defect in its predecessor. It is important that there should be no risk that the Pension Protection Fund might be unable to intervene and protect its rights as a creditor in the event of a co-operative and community benefit society obtaining a moratorium under the Corporate Insolvency and Governance Act.
Since we started to debate the new measures introduced by the CIGA, my noble friend Lady Altmann and others have been assiduous in arguing for the strengthening of the powers and rights of the PPF. I agree that this is highly desirable, so I welcome the Government’s action in closing this loophole. Since entering into a moratorium under the Act is not in itself an insolvency event, without these regulations the PPF would be unable to exercise its rights as a creditor of a defined benefit pension scheme. The trustees might be placed under pressure to agree to the sale of an asset pledged to the pension fund in the knowledge that the PPF would be required to step in without taking account of the wider interests of the members of the scheme or, indeed, the payers of the levy which funds the PPF.
These regulations have been introduced without consultation in the context of the Covid-19 pandemic, so it is welcome that we have the opportunity to discuss them today. While it is not directly the subject of today’s debate, I think it would be appropriate to hear a little more from the Minister on how the new provisions of CIGA are bedding down. My noble friend Lord Leigh of Hurley and others were concerned that a moratorium under the Act could not be applied for in order to rescue a company’s business, rather than the company itself. Further, I think it was unduly restrictive to exclude companies that have issued bonds in the amount of £10 million or more. As of 29 July, my noble friend Lord Callanan told your Lordships’ House that only one company had successfully entered into a moratorium. How many companies and other entities have now used the new moratorium process? I look forward to the contributions of other noble Lords and to the Minister’s reply to the debate.
My Lords, these regulations are necessary to ensure that the Payment Protection Fund can engage fully in a proactive and meaningful way in the conversations and decision-making processes when a company finds itself in difficulty. It is paramount that the PPF has this ability so that hard-earned pensions are safeguarded for their future security, and I fully endorse these regulations.
Turning to the PPF itself, I wish to raise two points. First, concerns were recently raised in the other place about the robustness of the fund at present, given the sadly expected rise in companies needing help and unable to support their pension funds. The fund had a healthy ratio of 118.6% as of March 2019, with 18.6% more in its funds than its obligations to pay out and an actuarial surplus of £6.1 billion. This year, while it is less than in 2019, March 2020 saw a healthy 113.4% ratio, with 13.4% more in its funds than its obligation to pay out. The PPF says:
“Market volatility forces us to remain vigilant and responsive to changes in our external environment which may also require changes in our strategy.”
We are now in uncharted waters as we head into winter, with the daily death toll from the virus rising. More and more restrictions are being placed around the country, and this will inevitably mean more and more businesses struggling to survive. In the current climate, what assurances can the Minister give us that everything is being done to ensure that the PPF is fit for purpose and able to sustain itself in order to support people and their pensions?
My second point concerns the actual amount of pension received. This is set to rise in line with the consumer prices index and capped at either 2.5% or 5%, whichever is the greater. Is this something that needs to be looked into in the light of the pandemic, in the same way that the Government have just done with the state pension uprating Bill?
My Lords, it is a pleasure to follow the noble Lord, Lord Loomba, and I thank him very much for his analytical review, which I found very helpful. I thank my noble friend for setting out the background to these regulations so clearly. I welcome the regulations, which I understand are needed because of an oversight.
My noble friend Lord Trenchard is quite right that a moratorium or restructuring against creditor enforcement is not an insolvency proceeding, which is the reason we need these regulations to facilitate pension protection, and I strongly support that. I have several questions for my noble friend the Minister, of which I have given her some notice, but I understand that she may want to correspond in writing on some of the points and will copy answers to the Library if that is necessary.
First, what is comprehended by “co-operative and community benefit societies”? I strongly agree about the protection for them, and I understand that the term includes credit unions. Do we also need to take special measures to protect the pension schemes of friendly societies, building societies and other mutual societies—and, indeed, trade unions? Are they also covered? Perhaps my noble friend can answer that point.
Paragraph 3.9 of the Explanatory Memorandum talks of an ongoing risk that, during any break in the application of the provisions, a relevant co-operative and community benefit society could obtain a moratorium from its creditors, or a relevant society could propose a plan to restructure its business, without the Pension Protection Fund being able to intervene as a creditor to protect its interests. How real is that break and how much of a danger is there of that eventuality?
How healthy is the position of the Pension Protection Fund? I know that the Minister for Pensions spoke to the chair and chief executive of the fund over the summer and was reassured about its resilience. Indeed, my noble friend also gave us reassurance in September. However, when did a Minister from the department last speak to the chair and chief executive about the standing and resilience of the fund? It would be good to hear about that.
More generally, can my noble friend give an update on the institution of the moratorium, a point that several noble Lords have raised? I believe that it has not been used much since its inception, although there is clearly a difference of opinion between the noble Lord, Lord Callanan, and the noble Baroness, Lady Drake, on whether it has been used at all. Is the Minister in a position to shed some light on this and whether the moratorium is likely to be used much, if it has not yet been used?
Finally, has there been any contact with the Insolvency Practitioners Association to obtain its views on the regulations, regarding the need for more protection for bodies other than those covered? Is there an ongoing dialogue with the association, which would be desirable because it is expert in these areas and steeped in insolvency and related restructuring proceedings? Subject to those considerations, I strongly support the regulations.
My Lords, I welcome the regulations and thank the noble Baroness for introducing them. It is right that they are now extended to cover co-operatives, friendly societies and other community purpose efforts. There will be many more occasions on which we need these regulations. I share the concerns of the noble Lord, Lord Loomba, that the PPF, which is doing a brilliant job so far, will come under increasing strain. As others have said, I would appreciate a reassurance that the PPF has not only the funds but the staffing to cope with the increased demands that are bound to be made on it as more and more companies, community organisations and co-operatives are hit by the difficulties and effects caused by Covid.
More broadly, when companies and organisations start to negotiate a moratorium and then a restructuring, there is always a need for trade-offs, as the noble Baroness, Lady Drake, suggested. My concern is that the trustees in many of those organisations are not sufficiently of a calibre to properly negotiate holding the line against owners and directors of businesses, who tend to drive for a solution that will benefit them and not the pension fund. I should therefore be grateful if the Minister reassured me on what we were doing to enhance the calibre of such trustees. Their responsibilities are great but their training is not.
My Lords, I welcome and support this legislation. I should first refer to my declarations in the register. The speeches so far have been really useful and picked up elements that need attention.
This matter is indirectly about how many SMEs fail to survive the Covid crisis. That will drive the volume of financial support required from the PPF when pension schemes are inadequately financed. I anticipate that there will be sufficient funds to cover the first wave of SME pension deficits. A major wave could require government financial support via the PPF. There is also the issue referred to by others, of levy payers being required to contribute more than they see as fit and fair. The regulations extend the scope of the PPF’s rights as a creditor when moratoriums are in place for relevant community benefit organisations.
The Treasury has widened the cover of the PPF, adding charities, LLPs and virtually all community benefit schemes. The questions here relate to the volume and financial adequacy of their accompanying pension funds and whether these new institutions’ pension schemes are adequately funded long term. We have already had a detailed set of regulations from PPF boards with creditor rights, which have been widened and extended. The PPF is now able to intervene and help with restructuring plans.
The second Covid wave of SME failures could be larger than the first and is likely to be accompanied by high volumes of inadequately financed pension schemes needing to be restructured. I am interested to know the total value of pension fund assets covered by the PPF. The pension situation may require the Government to bring in further support for SMEs to save many from failing.
Down the road, there is the risk of excess investment in gilts, with large losses when inflation and interest rates rise. I am aware of private sector pre-packs that provide speedy and successful reorganisation of SMEs that have failed. The PPF might usefully have its pre-pack investment formula ready to be rolled out for different situations. The question that this raises is on whether the PPF has the necessary skills to organise and manage restructuring of pension assets and schemes, and to help with company restructuring. The reason for the PPF being established in 2005 was to be able to pay compensation to members of defined benefits schemes where the employer had failed and the pension scheme had insufficient assets to cover its liabilities.
It is noteworthy that Karen Buck MP and the previous Minister for Social Security pointed out that the measures in the regulations do not entirely restore the PPF’s powers re corporate insolvency and the Corporate Insolvency and Governance Act; and the position occupied in restoring situations before the Act.
My Lords, I thank the Minister for the explanation of the regulations. My understanding is that they extend the Pension Protection Fund’s rights as a creditor when co-operative and community benefit societies have a moratorium in place to protect them from creditor action.
My first question for the Minister relates to community benefit societies. The Pension Protection Fund is UK-wide and therefore applies to Northern Ireland, credit unions being a type of community benefit society operating there. There are two types of credit unions but the one that is widespread and of which I am most aware is the Irish League of Credit Unions, which operates in two jurisdictions. Given that it is headquartered in Dublin, would it benefit from the rights outlined in the regulations? Maybe the Minister could write to me if she did not have the answer to hand.
I take note of the remarks of the noble Baroness, Lady Altmann, when she said that the Pension Protection Fund, set up by statute in 2004, exist to protect people and provide compensation when required. As a former Minister for Benefits and Welfare in Northern Ireland, I am fully aware that we have a system there of parity with London, particularly on social security and pension issues.
The Northern Ireland Assembly and the Executive bring forward their own legislation which is exactly the same as that which exists in London. In fact, these regulations were enacted back in August. Can the Minister say what discussions have taken place with the Northern Ireland Executive on the potential impact of these regulations, taking into consideration that the pandemic will perhaps result in some insolvencies? Many people have already lost their jobs, so this is really about the ability of the Pension Protection Fund to discharge its responsibilities, particularly in a place such as Northern Ireland which does not have the inbuilt financial capacity and resilience to do that. That is particularly the case when confronted with an issue such as the pandemic, which brings its own financial pressures.
The issue of financial resilience was raised in the other place, so on a more general basis, I will ask the Minister this: is the Pension Protection Fund resilient enough? Other noble Lords who have already spoken have referred to that. Does it have the necessary resources to address the extraordinary potential problems that could ensue around insolvencies as a result of the pandemic? What measures will be taken to ensure that the fund is ready and capable of absorbing what could be potentially thousands more pension scheme members who will require security over the coming year? Perhaps the Minister could advise me in writing about what meetings have taken place between the Department for Work and Pensions and the Pension Protection Fund to review its performance.
My Lords, I thank my noble friend for bringing forward this statutory instrument. I also congratulate her and the Secretary of State on the quiet way in which they have handled the Covid virus fallout, in particular by adding thousands of those who have lost their jobs on to universal credit. I pay tribute to her and her team in that regard.
I join with my noble friend Lady Altmann in recognising the work and the contribution of the Pension Protection Fund, particularly at this very difficult time. I want very much to lend my support to the regulations before us, extending as they do the provisions to co-operative societies and benefit societies. Perhaps I may put a couple of questions to my noble friend.
I notice that it has not been deemed necessary to prepare an impact assessment when bringing forward these regulations, but as was noted in the House of Commons and as others have mentioned today, there is increasing concern about the resources that will be at the disposal of the PPF. Can my noble friend say what the take-up has been, to date, since these regulations came into effect?
I turn now to the Explanatory Memorandum, in particular Paragraph 7.5. It states:
“Whilst a moratorium is not in itself a procedure for a business to shed its liabilities, it will become the point at which discussions about a restructuring deal begin.”
In my noble friend’s view, who will be best placed to advise co-operative and community benefit societies if they wish to exercise their right to restructure under the provisions of the regulations? Does she share my concern, as well as the increasing unhappiness in the country, about something that perhaps might not occur in this instance but would do so in other cases where restructuring has taken place to try, as she put it, to prevent the unnecessary closure of firms in these circumstances? The big accountancy firms—I shall call them the “Group of Four”—while no doubt playing a great role, are charging huge fees for the privilege of advising these firms, and that very process may actually tip some firms over the edge into administration and closure.
Those are my two questions, but I broadly welcome the chance to debate and support these regulations. I echo how much we owe the Pension Protection Fund for the work that it is doing at this very difficult time. I also pay tribute to my noble friend, her team and the department.
My Lords, these regulations are connected to powers recently introduced by the Corporate Insolvency and Governance Act 2020 to aid certain co-operative entities that are in financial difficulty. They will enable them to obtain a moratorium and thus give them respite from their creditors, or to be able to propose restructuring plans, including compromise arrangements to facilitate the rescue of their businesses. The regulations have been welcomed by the Labour shadow Minister for social security, who stressed the importance of the PPF.
As we know, the country is facing a dire economic outlook, with severe shocks being inflicted on many employers and on many pension schemes. The department responsible for social security must ensure that the PPF is ready and capable when it comes to absorbing the potentially thousands more pension scheme members who will require security over the coming year. It is imperative that the fund is in a good position to continue to provide compensation to those who need it.
The country is currently living with the health issues caused by the coronavirus. Under the three-tier scheme, thousands of businesses are going bankrupt, causing unprecedented levels of redundancies. Families are suffering due to a lack of income and are becoming increasingly dependent on food banks and charities. It is therefore vital that their pensions are protected.
It is pleasing to know that the Opposition has not objected to these regulations, but at the same time they have rightly raised questions in order to get the right levels of protection for employees.
My Lords, I declare my interest as a trustee, for more than a decade now, of the Parliamentary Contributory Pension Fund, and as having previously been the chairman of the Tunbridge Wells Equitable Friendly Society, again for about 10 years.
Like my noble friend Lord Bourne, I notice that no mention is made of friendly societies or mutual building societies. Indeed, I am slightly confused about the terminology of “community benefit society” being used, other than in relation only to Northern Ireland. Is that phrase now in common use for all mutuals? Bearing in mind that in today’s world, with the blessing of our Government, the number of mutuals is increasing across a whole spectrum of activities, I wonder whether they are being treated any differently from plcs as far as the PPF is concerned.
My second point arises from the High Court ruling on 22 June of this year about the compensation cap amazingly being unlawful. From a note I have received, I understand that the court is comfortable with the PPF’s approach to making a one-off calculation, saying that it is permissible
“provided it made sure that each individual, and separately each survivor, over the course of their lifetime received at least 50% on a cumulative basis of the actual value of the benefits that their scheme would have provided.”
I ask my noble friend on the Front Bench this: is everybody happy with that as a workable solution for the rather strange ruling that it is unlawful on the grounds of age discrimination?
Several of my colleagues have rightly raised the impending problems that are likely to arise from the pandemic. The PPF’s budget this year is based on raising £620 million. Can I assume that that figure is still the current levy? Will the PPF review its requirements against the target of being self-sufficient by 2030, because of the anticipated corporate failures arising from the pandemic?
I will raise one final point. I accept it is tangential to the SI, but my noble friend will probably be aware that the Local Authority Pension Fund Forum, commonly known as LAPFF, which is an association of 87 local authority pension funds, has accused the Financial Reporting Council of supporting the revised international accounting standards, claiming that they are less than those required by UK law. Will this have an impact on the Pension Protection Fund? I quite understand that, while I informed my noble friend of some of my earlier questions, I did not inform her of that one, so I am more than happy to have an answer in writing.
My Lords, I thank the Minister for her clear presentation of complex material and her willingness to provide us with information about these regulations. We support this important measure, which gives powers to the Pension Protection Fund in the event of certain community companies being in financial difficulty under the new provisions brought in under the Corporate Insolvency and Governance Act 2020. As other noble Lords have said, it would be helpful to know just how far this extends and what other types of community companies might be included.
As the Minister explained, these regulations give the board of the Pension Protection Fund rights normally exercised by pension schemes’ trustees and managers. Under the new provisions, the Pension Protection Fund can end up picking up liabilities—for example, if the pension is underfunded. It is therefore reasonable that it should have a seat at the table, as it does for insolvencies. Given that these regulations will give the board of the PPF rights normally exercised by pension schemes’ trustees or managers, it is good to know that the PPF is required to consult with the trustees and managers who will lose their rights as a result.
The regulations give the PPF new rights relating to other community businesses, in addition to the limited liability partnerships and charitable incorporated organisations dealt with in the original measure. The new arrangements are welcome and timely, particularly in the light of the predicted economic impact of the pandemic and the further economic impact of Brexit on UK companies. However, there are still some outstanding questions that I hope the Minister will be able to answer. I apologise for not giving her notice of them. Obviously, if she would prefer to write that is perfectly acceptable too.
What specific powers are given to the PPF? Can these override the views of the trustees should, for example, a course of action proposed by them seem unduly risky? What arrangements are in place to monitor the implications of the moratorium restructuring arrangements? When this issue was raised before, the Minister said that as yet, there were no occasions when the new arrangements had been used. Other noble Lords asked whether this is still the case. Nevertheless, if it is not, I am sure it will be very important to monitor the impact and effectiveness of the new arrangements.
Have the Government also assessed the capacity and sustainability of the PPF, particularly in terms of its expected future workload? Other noble Lords raised this issue as well. As other noble Lords have also asked, what protection will the Government provide the PPF in the event of high additional financial demands that might suggest increased levy payments or potential reductions in pension compensation? I hope the Minister will be able to answer these questions but, as I said, I am more than happy to have a written response.
My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords for their interesting contributions. I was also pleased to hear the Minister clarify the situation regarding the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020—I will call them PPF No. 1, if that is okay—which we debated on 14 September. I understood from the Minister that the problem was that DCMS made regulations in August that, in effect, meant that the PPF No. 1 regulations no longer applied to charitable incorporated organisations.
I have just gone back to the proceedings of 9 October, when we debated the Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020. When she introduced them, the noble Baroness, Lady Barran, explained that her department had decided that it would simplify the moratorium regime, so it disapplied provisions that it felt were unnecessary, including Section A51 of the Insolvency Act 1986, which gives the power to make provision for regulations relating to pension schemes. Unfortunately, those were the very powers that the DWP had used to extend the PPF moratorium provisions to CIOs.
The noble Baroness, Lady Barran, went on to say that
“DCMS will bring forward legislation, when parliamentary time allows, to enable these provisions to apply to CIOs. In the meantime, we do not anticipate there being any practical impacts on stakeholders whatever.”—[Official Report, 9/10/20; col. 847.]
Were those the regulations that had the effect of excluding CIOs from some of the provisions of the PPF No. 1 regulations? If so, why did DCMS press on and let Parliament debate them 12 days ago, rather than repealing and replacing them? After all, the noble Baroness, Lady Barran, said that it already had to reissue them once, owing to a mistake in the version that was laid, so it presumably could have done so again. I realise the Minister might need to ask DCMS, but I would be grateful if she did. Could she then write to me? Also, where are we now? Is it the case that, right now, the provisions of PPF No. 1 do not apply to CIOs? How long will that last? What are the consequences of that gap?
However, we are debating the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020—or PPF No. 2 for my purposes. I understand that the PPF No. 2 regs are needed not because of that earlier difficulty, but because the Treasury has extended the remit of the Corporate Insolvency and Governance Act to apply to most co-operative and community benefit societies, and to credit unions, so the regulations ensure that the PPF covers those bodies that are now within the scope of the moratorium provisions of the Insolvency Act. This is complicated further by the fact that the original version of the PPF No. 2 regulations contained an error due to an omission in the Treasury regulations, so this is now in fact PPF No. 2, version two.
I am grateful that I got to the bottom of these complications. I will not make an issue of it, but I wanted to get it on the record because it feels important to have an audit trail of how we ended up here. However, these episodes reveal, first, three steps of drafting problems, and secondly, a failure in interdepartmental communication. What steps can be taken to ensure that DWP, or indeed other departments, find out in good time if another department is laying legislation that impacts on their own powers or provisions? Have the Government reflected on whether they are investing adequately in ensuring that departments have the resources needed for the process of drafting and cross-checking secondary legislation, or indeed primary legislation?
However, we are happy to support these regulations, since it is of course important that the PPF can step in and use its powers in the interests of the pension schemes of co-ops, community benefit societies and credit unions. But I will ask a couple of questions, including on an issue that I think other noble Lords have touched on. The moratorium provisions and, therefore, the scope of the PPF, will apply to co-op and community benefit societies, with some exceptions. Could the Minister clarify what the exceptions are? How confident is she that all the bodies to which the moratorium provisions of the Insolvency Act apply are now definitely within the PPF’s scope? If any are not, or are found later not to be, what is their legal status?
Turning to broader questions, I will be very interested to hear the answer to the question raised by my noble friend Lady Drake. This is potentially a very serious issue. We need clarity as to how the regulator could act and which legislation takes precedence in the circumstances she described. It is essential that pension funds and pensioners can always benefit from the protection that Parliament thought it had afforded them.
The PPF’s position was raised by several noble Lords, including the noble Baronesses, Lady Ritchie and Lady McIntosh. Given the state of the economy and the risks to so many employers, what assessment has the department made of the strength and stability of the PPF and its ability to deal with what is coming down the track? What mechanisms are there for keeping that under careful and constant review? How will Parliament be kept informed? Noble Lords have asked about this whenever we have had the opportunity. Can the Minister think about how best she can give Parliament the ongoing assurance needed that the PPF will be able to do its job? It is incredibly important to pension funds and pensioners across the land that this agency works, and Parliament needs some assurance on that. I look forward to her reply.
My Lords, I am grateful to noble Lords for this helpful debate and their interventions. I hope that I have been able to establish why these amending regulations are required. Extending the Pension Protection Fund rights as creditor to relevant co-operative and community benefit societies and relevant societies, as applicable, will help to ensure, if those entities are also sponsoring employers of a Pension Protection Fund eligible pension scheme, that the interests of the scheme and the Pension Protection Fund are protected during a moratorium, or where a restructure of the business is proposed under the new corporate insolvency and governance legislation, as applicable.
I will do my very best to answer all questions; where that is not possible, I will write to the noble Lords concerned and place a copy of the letter in the Library. The noble Baroness, Lady Drake, asked whether trustees agreeing to a corporate rescue will be within the scope of the new criminal sanctions in the Pension Schemes Bill, and which has precedence. We do not think that there is a conflict between the provisions in the Corporate Insolvency and Governance Act 2020 and measures in the Pension Schemes Bill. The new criminal offences proposed in the Bill make it clear that an offence is committed only if the person did not have a reasonable excuse for committing the act or engaging in a course of action. The aim of the powers in the Pension Schemes Bill is to target individuals who intentionally or knowingly mishandle pension schemes or put workers’ pensions at risk by behaviour such as chronic mismanagement of a business or avoiding pension liabilities. There is no intention to frustrate the legitimate business activities where they are conducted in good faith.
The noble Baroness, Lady Drake, also asked whether the Pension Protection Fund has the power to demand detailed information or conduct its own investigation into the financial position of the company. There are requirements in the Corporate Insolvency and Governance Act to provide information to the board of the PPF in relevant specified circumstances in respect of the moratorium and the restructuring measure. The Pension Protection Fund may also be able to use existing powers to request information from the company when it is relevant to the exercise of its functions in relation to an occupational pension scheme—in this case, the exercise of creditor rights. If the company refuses or neglects to provide the information without reasonable excuse, the company would then be guilty of an offence. However, a company could argue that the standard information provided to all creditors is enough to enable the board of the Pension Protection Fund to exercise its creditor rights, so it does not require any further information to exercise those rights above and beyond what other creditors get.
My noble friend Lady Altmann asked why these regulations revoke a previous set of regulations, and which parts were revoked. An omission in HMT’s order meant that there was no power to make provision for the Pension Protection Fund to exercise creditor rights in relation to relevant societies in my department’s regulations. As a result, certain provisions of those regulations were ultra vires. The entirety of our further set of regulations has been revoked and replaced with the regulations being debated today.
My noble friends Lord Trenchard, Lady Altmann and Lord Bourne, asked how many entities have gone into a moratorium since the legislation was passed. The Insolvency Act publishes insolvency statistics monthly, and the 14 October publication included the new moratorium for the first time. Two moratoriums have been entered into since the Act came into force on 30 September.
The noble Lord, Lord Loomba, the noble Baronesses, Lady Wheatcroft and Lady Janke, and my noble friend Lord Bourne, raised the issue of the sustainability of the PPF’s funds as a result of Covid-19. The Pension Protection Fund is confident that its long-term funding strategy and diverse investment approach position it well to weather the current market volatility and future challenges. The Pension Protection Fund’s latest modelling shows that the fund is well placed to achieve its self-sufficiency target: the ability to pay Pension Protection Fund compensation in full, with a 10% buffer.
The noble Baroness, Lady Janke, and my noble friends Lord Naseby and Lord Bourne, raised the issue of why our co-operative and community benefit societies need to be included. Mutuals are organisations owned and controlled by their members rather than by shareholders. They operate on a “one member one vote” structure, and include co-operatives, community benefit societies and financial services providers, such as building societies, credit unions and friendly societies.
The noble Baronesses, Lady Wheatcroft and Lady Ritchie, asked about the Pension Protection Fund’s resources to intervene in moratoriums and restructuring in the current economic climate. The Pension Protection Fund has an in-house restructuring and insolvency team, and the ability to call on third-party advisers to support its work. The PPF keeps its level of resourcing under review, but at present is confident that it can engage in moratoriums and restructuring plans as necessary. The noble Baroness, Lady Wheatcroft, asked what we were doing to enhance the ability of trustees. The Pensions Regulator has guidance on its website for trustees.
My noble friend Lord Flight, the noble Baroness, Lady Wheatcroft, and other noble Lords, raised the question of the skills of PPF in restructuring arrangements. The PPF has a dedicated in-house insolvency and restructuring team, and, as I have said, can also draw on a large range of third-party advisers. It is important to recognise that the PPF has been involved in restructuring arrangements since its launch in 2005. My noble friend Lord Flight also asked about the value of PPF pension schemes assets. The total assets in the October 2020 PPF 7800 Index were £1771.4 billion.
The noble Baroness, Lady Ritchie, quite rightly and understandably, asked what engagement there has been with the devolved Administrations. We have worked with Northern Ireland on some of the detail of the policy and helped Northern Ireland in the preparation of its regulations, which have now been published. There was engagement with the devolved Administrations during the development of the measures included in the Corporate Insolvency and Governance Act. Northern Ireland has introduced its own regulations to ensure parity, as relevant. The noble Baroness also raised the issue of the credit union in Northern Ireland. I will write to her about that, as I will on the question about meetings between the DWP and the PPF regarding their performance.
My noble friend Lord Naseby asked what we are doing now that the courts have declared the PPF compensation cap as unlawful. The PPF compensation cap is still a live issue before the courts, and therefore I cannot comment further on it.
My noble friend Lady McIntosh raised the issue of an impact assessment. One has not been prepared for these regulations because the measures do not impose any regulations on business or lift any regulations from it so there is no direct regulatory impact.
My noble friend also asked whether we can seek to reduce reliance on the big four accountancy firms. The Competition and Markets Authority market study on the statutory audit market was published on 18 April 2019. The report made a series of wide-reaching and ambitious recommendations, including proposals for the joint audit and an operational split between audit and non-audit services.
The noble Lord, Lord Hain, rightly mentioned workers, how they are looked after and their rights in relation to both these regulations and pension schemes. I am interested in the book that he referred to; if it is acceptable to the noble Lord, I will write to him with a more specific response to his questions.
The noble Baroness, Lady Janke, asked what happens if scheme trustees or managers and the Pension Protection Fund do not agree on a course of action. We expect PPF and scheme trustees or managers to work together in the common interest of the pension scheme. For example, when a restructuring plan is proposed, in the circumstances specified in the regulations, both the scheme trustees and managers will be able to make an application to the court and participate in meetings ordered by the court.
My noble friend Lord Naseby asked in what circumstances the Pension Protection Fund would increase its levy. The PPF entered the pandemic in a strong financial position, as I said. Its latest annual report showed that it has significant reserves and it was clear that it monitors the position regularly.
My noble friend Lady McIntosh asked who will advise community and mutual organisations. Again, I will need to write to her on that.
The noble Baroness, Lady Sherlock, asked why DCMS still brought forward its regulations when they affected ours. I will write to consult my DCMS colleagues on her questions. I can confirm that CIOs are currently not covered by our regulations; DCMS will resolve this at the next possible opportunity.
I hope that I have answered the majority of noble Lords’ questions. As I have committed before, if I have not done so, I will write to noble Lords and place a copy in the Library. I commend the regulations to the House.
Arrangement of Business
My Lords, the hybrid proceeding will now resume. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
Proceedings on the consideration of Commons Reasons on the Immigration and Social Security Co-ordination (EU Withdrawal) Bill will follow guidance issued by the Procedure and Privileges Committee. When there are counterpropositions, any Member in the Chamber may speak, subject to the usual seating arrangements and the capacity of the Chamber. Anyone intending to do so should catch my eye or email the clerk—it is probably better to email the clerk. Members not intending to speak on a group should make room for Members who do. All speakers will be called by the Chair.
Short questions of elucidation after the Minister’s response are permitted but discouraged. A Member wishing to ask such a question, including Members in the Chamber, must email the clerk. The groupings are binding. Leave should be given to withdraw.
When putting the Question, I will collect voices in the Chamber only. Where there is no counterproposition, the Minister’s Motion may not be opposed. If a Member speaking remotely intends to trigger a Division, they should make this clear when speaking on the group. Noble Lords following proceedings remotely but not speaking may submit their voice, Content or Not-Content, to the collection of the voices by emailing the clerk during the debate. Members cannot vote by email; the way to vote will be via the remote voting system.
Immigration and Social Security Co-ordination (EU Withdrawal) Bill
1A: Because Skills for Care and the Migration Advisory Committee already have the remit to report on matters relating to social care and the immigration system.
I call the noble Lord, Lord Rosser, to move Motion A1.
In the Commons on Monday, the Government chose to describe your Lordships’ amendment calling for an independent report on the impact of the end of free movement on the social care sector as “well intentioned”, but went on to claim that it was “unnecessary”—
My Lords, if I may intervene, I was going to give a speech. Would the noble Lord bear with me while I speak?
I did call the Minister, but she sat down, so I presumed she had finished. No? Baroness Williams of Trafford.
I was very politely waiting to be asked, then the noble Lord, Lord Rosser, came in. Shall we start again?
My Lords, with the leave of the House, I will turn to Motion A, Amendment 1, and Amendment 1B in lieu, proposed by the noble Lord, Lord Rosser, which would require the Secretary of State to publish an independent report on the impacts of ending free movement on the social care sector. I start by acknowledging the work of noble Lords in the scrutiny of this important Bill, which ends free movement between the EU and the UK, and the passion and commitment with which your Lordships have spoken on a number of issues. We have debated many issues, and although there are some areas on which we may still disagree, I always come back to the focus of this Bill: ending free movement and delivering on the Government’s manifesto commitment to introduce a firmer, fairer points-based immigration system.
Amendment 1B requires the Secretary of State to publish the response to the independent assessment within two months of publication and make a statement to Parliament within seven sitting days of publishing the response. I recognise the good intentions behind Amendment 1, but the other place disagreed to it because independent reporting already exists in this area through Skills for Care and the Migration Advisory Committee. The Government remain committed to improving social care, focusing on increased funding and training opportunities and improved recruitment practices. I will reflect further on a few related points.
The Department of Health and Social Care funds Skills for Care to deliver a wide range of activity to support the Government’s priorities for the social care sector. This includes programmes to support employers and the workforce with skills development, promote and support recruitment into the sector and support leadership development. The DHSC’s funding also supports the development of Skills for Care’s adult social care workforce data system, which forms the national minimum dataset for social care. Skills for Care publishes two annual reports: on the size and structure of the adult social care sector and workforce in England, and the state of the adult social care sector and workforce in England. In addition, Skills for Care makes available national and regional data through its website. The DHSC uses the data produced by Skills for Care, and the trends identified, to inform its policy development to support the adult social care sector to recruit, train and develop its workforce.
As I have said, the independent Migration Advisory Committee now has an expanded remit to examine any aspect of the immigration system and provide annual reports. The Government continue to reiterate their continued commitment to keeping all policies, including the skilled worker route, under review. The MAC is a world-class independent body and has the means and the will to ensure that the views of interested stakeholders and users of the system are fully considered. In doing so, the MAC’s consideration always goes beyond its core economic expertise.
Noble Lords will have heard me say a number of times during the passage of this Bill that the immigration system is not the solution to all issues in the social care sector and we must not continue to rely on migrants coming to the UK when the domestic workforce can help to address shortages. Training, recruitment, and retention of staff are the key; we must ensure that these essential workers feel valued. That is why the Government are focused on working alongside the sector, including through Skills for Care, to develop new career pathways within the sector and ensure that the workforce can meet the increasing demands and continue to deliver quality compassionate care. It is also why the Government are committing record funding and investment.
Under the UK’s new points-based system, as is now the case, there will be routes for people with general work rights, such as dependants, those joining family or those on youth mobility visas, who may choose to work in the social care sector. I have made this point before, but even with free movement between the EU and the UK, the majority of workers in the social care sector are British citizens, which we must continue to encourage, and non-EEA citizens outnumber EEA citizens, without a specific immigration route. We also intend to review which occupations are eligible for the health and care visa, expanding its remit and benefiting more main applicants and their family members.
Noble Lords will see from what I have said that there is already independent reporting on social care. However, I am prepared to go further and commit today that we will agree to publish an independent assessment of the impact of ending free movement, which will comprehensively cover the impact on the social care sector, within six months of this Bill being passed. We therefore believe that Amendment 1B is unnecessary, although it is very well intentioned. However, I would like to discuss with the noble Lord, Lord Rosser, how we take this forward to ensure that we get the detail right, strike the correct level of scrutiny and clarify some of the definitions that he uses. As the noble Lord has requested, I am happy to give a commitment to carry out the terms of his amendment. I hope that, on that basis, the noble Lord will not insist on his amendment or divide the House on Motion A1.
Motion A1 (as an amendment to Motion A)
1B: Insert the following new Clause—
“Impact of section 1 on the social care sector
(1) The Secretary of State must commission and publish an independent assessment of the impact of section 1, and Schedule 1, on the social care sector within six months of this Act being passed.
(2) The Secretary of State must appoint an independent Chair to conduct the assessment.
(3) The assessment must consider the impact of provisions in section 1, and Schedule 1, on—
(a) the social care workforce
(b) available visa routes for social care workers;
(c) long-term consequences for workforce recruitment, training and employee terms and conditions; and
(d) such other relevant matters as the independent Chair deems appropri-ate.
(4) A copy of the independent assessment must be laid before both Houses of Parliament within fourteen days of its publishing date.
(5) The Secretary of State must publish a response to the independent assessment within two months of its publishing date.
(6) The Secretary of State must make a statement to Parliament within seven sitting days of publishing the response under subsection (5).””
I thank the Minister for what she has just said about my amendment, which started off life in Committee, being moved by my noble friend Lord Hunt of Kings Heath, albeit not with exactly the same words. As I understand it from what the Minister has just said, the Government are not prepared to accept the amendment to the Bill but are giving a commitment to carry out the terms of the amendment in full, and that must, therefore, include the timescales laid down in it. If that is the case—and the Minister gave a commitment to carry out the terms of my amendment—then I will not seek pursue my Motion to a vote.
I note that the Minister said that she wished to discuss with me how we ensure—I I think that was what she said—that we get the detail right, and, of course, I am happy to do that within the context of the Government having committed to carry out the terms of my amendment in full, including the timescales laid down in it. I do not think I misheard what the Minister said: I certainly heard the phrase “give a commitment to carry out the terms of his amendment” being used with no caveats added. Therefore, on the basis that the Government are committing themselves to carry out the terms of my amendment in full, then I would be prepared to withdraw my Motion when the time comes.
However, I would like to add one further comment. Within the terms of the amendment, it is, of course, left to the Government to decide who will undertake the
“independent assessment of the impact of section 1, and Schedule 1, on the social care sector”.
These relate to the ending of free movement. From what the Minister has said, I suspect that a candidate will be the Migration Advisory Committee, whose views on even the single issue of funding social care for higher wages have been ignored “for some years”, to use the MAC’s words. That does not suggest that it is a body whose views on that issue carry much weight with the Government. It will be vital for the independent assessment to have a significant and meaningful input from people of influence who understand fully the way in which the social care sector functions and the constraints under which it operates. Although it is a matter for the Government, I hope they will ensure that that vital, significant and meaningful input occurs.
On the basis that I have understood clearly what the Minister has said on behalf of the Government—namely, that she has made a commitment to carry out the terms of my amendment, and that this must be in full because there were no caveats added—then I would be prepared not seek to pursue the matter to get it written into the Bill. I beg to move.
The following Member in the Chamber has indicated that he wishes to speak: the noble Lord, Lord Hunt of Kings Heath.
I thank the Minister for her response this afternoon and her agreement that an independent assessment would be undertaken. I endorse the remarks of my noble friend Lord Rosser. At the end of the day, whatever the worthy work of Skills for Care has been and whatever the recommendations made by the Migration Advisory Committee, we have a big problem with the social care sector in relation to the workforce challenges. The intention that, basically, most care workers cannot meet the criteria in the new health and care visa means that, from the beginning of next year, further pressure will be leant upon the sector.
Given that the sector is almost totally dependent either on government funding or on self-funders—who are already hugely overstretched because they sometimes pay more than £1,000 a week for their care—this will not be solved simply by saying that we can rely on the UK population. There will have to be an injection of resources; this is inescapable. In thanking the Minister, which I do very much, for her response this afternoon, I remind the House that the social care sector faces many huge challenges, and, in the end, the Government are going to have to come up with the necessary if we are going to get it out of the problems that it now faces.
Does anyone in the Chamber wish to speak? We have not received any requests as yet. Does the Minister wish to reply to the noble Lord, Lord Hunt? No? Then I call the noble Baroness, Lady Hamwee.
I am, of course, pleased to hear the Government’s decision on this. From and on behalf of our Benches, I added my name to the previous versions of this amendment. The point has been made throughout the Bill that the amendment is unnecessary, but, given that its proposers have kept on pressing, clearly they have not been satisfied. This is good news, but one always has to think around the subject, and I wonder what the correct level of scrutiny is. To me, it involves stakeholders very widely and the context for consideration of a proposal, which, in this case has to be more than just the immigration provisions which may apply. One thing on which I agreed with the Commons and with others who have spoken is that the social care crisis cannot be solved through immigration alone: it is much wider than that.
The correct level of scrutiny involves the organisation being scrutinised—in this case, the Government and their proposals—not being committed to its initial proposition but being prepared to listen to the responses. We are always faced with statutory instruments where there is no possibility of making a change. It would be tragic—I do not think that is putting it too highly—if the opportunity is not taken on this occasion to adopt a much more open-minded practice. Having said that, I welcome what the Minister has said.
I apologise to noble Lords; I keep wanting to pop up at the wrong time during this debate. However, I thank all noble Lords who have spoken in this part. First, I come to the noble Lord, Lord Rosser, and absolutely commit to the timescales set out in his amendment. He asked, with a certain degree of cynicism, I think, who will carry it out and suggested the Migration Advisory Committee. It must be a hot contender for it, but I take his point about the skills of the people who carry it out.
When settling on the proposals for the new points-based system, we did not do it in isolation; we conducted an extensive programme of engagement with stakeholders— as the noble Baroness, Lady Hamwee, and the noble Lord, Lord Hunt of Kings Heath, alluded to—across the whole of the UK, including in the social care sector, listening to people’s concerns and hearing about the unique challenges they face.
Both the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Hamwee, have in different ways pinpointed that the workforce challenges are not single silver-bullet issues—they will not be solved by continuing along the trajectory of low pay. It is incumbent on employers in what has been, throughout the last few months and years, a very valued occupation not to continue to rely on low-paid workers. As the noble Baroness, Lady Hamwee, said, social care cannot be solved just by immigration; progress needs to be made with a whole plethora of interventions in this area of a much-needed, well-respected and very much appreciated workforce.
In the light of what the Minister has said, which I appreciate and welcome, I shall withdraw my Motion. Obviously, I do so on the basis of the Government having given a commitment to carry out the terms of my Amendment 1B in full. I am happy to participate in the further discussions which the Minister has said she wishes to have with me, and I therefore beg leave to withdraw the Motion.
Motion A1 (as an amendment to Motion A) withdrawn.
Motion A agreed.
2A: Because the Commons consider it appropriate to ensure equal treatment of family members of all UK nationals under the immigration system.
My Lords, Amendment 2, in its previous form, was also disagreed to in the other place. It seeks to continue certain family reunion arrangements provided by EU law—the so-called Surinder Singh route.
Amendment 2B, tabled in lieu by the noble Baroness, Lady Hamwee, would require the Government to provide the right for British citizens resident in the EEA or Switzerland by the end of the transition period to return to the UK accompanied, or joined, by their non-British close family members on current EU free movement law terms until 31 December 2040—that is, for a period of 20 years from the end of the transition period. They would retain preferential family reunion rights for that period. For the next 20 years, family members of British citizens living in the EEA or Switzerland would continue not to be subject to the same Immigration Rules as family members of other British citizens. This would perpetuate a lack of parity, which the Government cannot accept.
Family members of British citizens resident in the EEA or Switzerland at the end of the transition period are not protected by the withdrawal agreements in terms of returning to the UK, but we have made reasonable transitional arrangements for them. British citizens living in the EEA or Switzerland will have until 29 March 2022 to bring their existing close family members—a spouse, civil partner, unmarried partner in a long-term relationship, child or dependent parent—to the UK on EU law terms. The family relationship must have existed before the UK left the EU on 31 January 2020, unless the child was born or adopted after that date, and must continue to exist when the family member seeks to come to the UK. Those family members will also then be eligible to apply to remain in the UK under the EU settlement scheme.
Family members will be able to come to the UK after 29 March 2022 but will then need to meet the requirements of the family Immigration Rules. Those rules apply to the family members of other British citizens, irrespective of where they come from, and reflect the public interest in preventing burdens on the taxpayer and promoting integration. This is a fair and balanced policy. It was announced on 4 April 2019, so those affected will have had almost three years to decide whether they wish to return to the UK by 29 March 2022 on current EU law terms and, if they do, to make plans to do so.
The Government’s approach strikes the right balance between providing sufficient time for British citizens and their family members living in the EEA or Switzerland to make decisions and plans for returning to the UK, and ensuring equal treatment of the family members of British citizens under the Immigration Rules as soon as is reasonably possible once free movement has ended. We must be fair to other British citizens, whether they are living overseas or in the UK. The same rules should apply to all, not continue for the next 20 years to give preferential treatment to those relying on past free movement rights, which will have been abolished. That is what a fair global immigration system means.
I hope that noble Lords will not insist on their Amendment 2 or agree to Amendment 2B in lieu. I beg to move.
Motion B1 (as an amendment to Motion B)
2B: Page 3, line 8, at end insert—
“(5A) Regulations made under subsection (1) must make provision to enable UK citizens falling within the personal scope of—
(a) the Withdrawal Agreement,
(b) the EEA EFTA separation agreement, or
(c) the Swiss citizens’ rights agreement,
to return to the United Kingdom before 31 December 2040 accompanied by, or to be joined in the United Kingdom before 31 December 2040 by, close family members.
(5B) Regulations under subsection (1) may not impose any conditions on the entry or residence of close family members of UK citizens which could not have been imposed under EU law relating to free movement, as on the day on which this Act comes into force.
(5C) For the purposes of subsection (5A)—“close family members” means—
(a) children (including adopted children), and
(b) other close family members where that relation subsisted on or before 31 January 2020 and has continued to subsist;
“Withdrawal Agreement”, “EEA EFTA separation agreement” and “Swiss citizens’ rights agreement” have the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020 (interpretation).””
My Lords, I am moving an amendment similar to that moved at a previous stage but with a change to meet one of the points made against it.
It came as a shock to me to learn that there will be restrictions on, and conditions applying to, a UK citizen wishing to return to the UK with a non-British family. In Committee, I asked what the Minister would advise a couple with elderly parents in both countries, for both of whom they wanted to care. This rather follows on from the previous amendment. Following that, I received many emails describing many, varied families affected. They all explained the anxiety they felt.
The minimum income requirement will apply, as the noble Baroness said, after March 2022 as it applies now to a UK citizen wishing to bring a non-UK—currently non-EEA—family to this country. I have always felt that the MIR is very harsh. It presents real difficulties, including as regards the spouse’s contribution to the household income. In the 21st century, most households are necessarily two-income households. In response to the point that these families should be treated the same as families that include non-EEA citizens, I say that it should not apply to them either, but that would not be within the scope of this Bill—although I would have liked to have taken that opportunity. Those families will, in very many cases, have been aware of the situation when the family unit was created.
I understand the Government’s concern that EEA citizens should be treated the same as citizens in the rest of the world after the end of free movement, but the situations are not exactly the same. When marriages were made and families created after we had acquired rights of free movement, who would have given a thought to what might happen if those rights ended, or indeed given thought to whether those rights might end? And who in the British military who met their spouse when they were serving abroad would have contemplated this situation? I do hope that the Secretary of State has read their letters.
The provision may not be retrospective in a technical sense, but in an everyday sense it is. This is not something that is widely understood, even now. The Government’s original proposal in June 2017 did not deal with the issue. As the noble Baroness said, the public announcement of the 2022 date came out in a paper in April 2019 and was presented as a concession. The paper said that the Government recognised that UK nationals needed certainty—this was after we were supposed to have left the EU.
I wondered whether I had missed something here, so I checked on what had been done, and when, to make people aware of the position. Had the Foreign and Commonwealth Office attempted to draw this to people’s attention? Had our embassies raised it in local town hall meetings abroad? One, rather dry, comment made to me was that, if these citizens had voting rights, the embassies would have been able to make direct contact with them. I understand that the targeted FCO campaigns have focused largely on rights in the host country, advising people to register and to change their driving licence, for instance.
On the “Living in France” and “Living in Italy” pages on GOV.UK, I clicked on “Ending your time living abroad” and, after a couple more clicks, found—because I was looking for it—“bringing your family”, which told me that a visa would be needed for them. One might easily stop there. Immigration rules required further clicks, and so on. I understand that all this is still coming as a surprise, and of course a shock, to those who happen to trip over it.
An EU citizen here now or by the end of this year can bring in family members—and quite right too. But is it not right for our own compatriots? This is discrimination against UK citizens. It is not as if what we propose would open any floodgates. It is self-limiting: no-one would qualify after free movement had ended; it is not a “perpetual” or “for ever” right, as it has been badged.
Criticism was made on Report that there was no cut-off date by which a UK national must return to the UK. Ministers say that three years gives a reasonable period to plan. This version of the amendment includes a cut-off date—deliberately long—of 20 years after the end of the transition period. By then, most of those affected, who will have formed settled relationships and families, are likely to be over 50 with parents of 70 or 80, so their families would be in a better position to know whether returning to the UK was likely to be necessary. The Minister in the Commons presented the 2022 date as reflecting a need
“to be fair to other British citizens”—[Official Report, Commons, 19/10/20; col. 804.]
as if there is something “other” about UK people who have married people from the EEA. He also said that the Government would keep the policy “under review”, so I would be grateful if the noble Baroness the Minister could expand on that today: when, how, with whom? She has described the policy as simple fairness. We disagree. What we are proposing is what I would describe as fair, and I will wish to test opinion of the House.
The following Members in the Chamber have indicated a wish to speak: the noble Baroness, Lady Ludford, and the noble Lord, Lord Oates. I now call the noble Baroness, Lady Ludford.
My Lords, I agree with everything that my noble friend Lady Hamwee has said. The Minister said that the arrangements that the Government have made are “reasonable”, but one has also to think of the reasonable expectation of British citizens who may have moved abroad, married, set up partnerships and had families with citizens from elsewhere in the EEA. They would have had no reason to suppose that the conditions and rules under which they did that would change—after all, the promise of a referendum in 2015 came somewhat out of the blue; it really was not expected. My noble friend’s amendment would accommodate fairly those reasonable expectations while meeting the Government’s apparent objection that they do not want a period which is unlimited.
The Conservative manifesto for the 2017 general election promised to legislate for “votes for life” for Britons living abroad. That has not happened, but, at the time, the Conservatives rejoiced at scrapping what they called the previous Labour Government’s “arbitrary” 15-year rule. I think that one could also describe the Government’s three-year rule in this scenario for UK citizens living in the EU as arbitrary.
Mr Chris Skidmore, who at the time was Minister for the Constitution, said:
“British citizens who move abroad remain a part of our democracy and it is important they have the ability to participate … Our expat community has an important role to play.”
One can deploy that statement in this context. These were valuable sentiments about Britons living abroad. I would transfer them to say that British citizens residing elsewhere in the EEA should have the right to participate not only politically but economically and socially in this country. To put them now in a quandary of having to decide by March 2022 what their family circumstances with parents and children could be in the decades ahead is an unnecessary, arbitrary and unreasonable imposition. Twenty years is a highly reasonable proposition.
The Conservative Party has long claimed to be the party of the family. Please can it demonstrate that it is the party of families of UK citizens who chose, in reasonable expectation of free movement rights continuing, to live and set up home and families with citizens from the rest of the EEA. They are now placed in extremely difficult and worrying circumstances. It is not fair play to them to do that. My noble friend has given the Government an opportunity to find a way a through this which preserves honour and fairness all round.
My Lords, I shall speak only briefly because my noble friends Lady Hamwee and Lady Ludford have comprehensively set out the injustices that will be visited on thousands of British citizens and their families if the Government’s policy stands. I shall make just two points.
First, the argument that to retain the existing rights of UK citizens with EEA spouses or families is somehow discriminatory or unfair as against UK citizens with non-EEA spouses has no merit. I speak as a UK citizen with a non-EEA spouse. When we made decisions about our lives, we did so in the knowledge and understanding of the rules at the time, just as UK citizens with EEA spouses made decisions about their lives on the basis of the rules at the time, which they could have had no reasonable expectation would change. The only way in which one could say that discrimination would occur would be if this amendment suggested that UK citizens forming relationships with EEA citizens going forward should be afforded different rights, but that is not what it says.
Secondly, yesterday, your Lordships’ House passed two amendments in lieu on agri-food standards. They were important and I was pleased to support them, but this amendment, I venture, is much more important, because it is about people’s lives. If it is not passed, huge misery will be inflicted on a large number of people. I do not think that we have really understood the level of suffering that will be inflicted. Frankly, it is wrong and heartless, and we should not allow it to stand.
We do not minimise the importance of this issue any more than we minimise the importance of any of the amendments and the issues they covered which this House sent to the Commons and which the Commons rejected. As has been said, British citizens who moved to other EU countries will lose the right they had to return to this country of birth with a non-British partner or child, perhaps to look after an ageing parent, unless they can meet financial conditions that will be beyond the reach of many. While British citizens who have moved to the EU or EEA before the end of 2020 will face these restrictions, EU citizens who have moved to the UK before the end of 2020 will not.
However, while this issue of the right for UK citizens to return with their family was referred to by some speakers during the Commons proceedings on Monday, it was not taken to a Division. This rather indicates that we have now taken this matter as far as we can at present, having sent it to the Commons once. For that reason we will abstain if Amendment 2B in lieu is taken to a vote. In the Commons on Monday, the Government said they would
“continue to keep this area under review”.—[Official Report, Commons, 19/10/20; col. 804.]
We call on it to continue to look further at this issue, in which I declare a personal family interest, outside the Bill and well before the deadline date of 29 March 2022 for bringing existing close family members to the UK on current EU law terms.
I thank all noble Lords who have spoken. I start with the noble Lord, Lord Rosser, who rightly points out that the Commons did not divide on this matter on Monday. We should remind ourselves that the British people voted to leave the EU in 2016; we are now four years on from that point.
I will answer the noble Baroness, Lady Hamwee: of course we keep all legislation and policy under review, and we are assisted by MAC in that endeavour. We recognise that UK nationals who moved to the EU expected free movement rights to continue. That is why we have provided for these transitional arrangements, but we have to be fair to other UK nationals whether they live overseas, beyond the EU, or in the UK. The UK family Immigration Rules reflect the public interest in preventing burdens on the taxpayer and promoting integration. UK nationals protected by the withdrawal agreement because they are living in the EEA before the end of the transition period do, of course, have lifetime rights to be joined in their host state by existing close family members. This mirrors the rights of EEA citizens living in the UK by then.
The noble Baroness, Lady Ludford, challenged me about the date of 29 March 2022 being arbitrary. It represents three years after the date when the UK was originally supposed to leave the EU. For me, it strikes the right balance between providing sufficient time for UK nationals and their family members living in the EEA or Switzerland to make decisions and plans for returning to the UK, and ensuring equal treatment of the family members of UK nationals under the Immigration Rules as soon as reasonably possible, once free movement to the UK has ended.
I am of course grateful to my noble friends who supported this amendment. I hope that I never give my noble friend Lady Ludford cause to look up what I have said in the past. I am particularly grateful to my noble friend Lord Oates, who—if you will—embodies the point I was making about the differences between those who married EU citizens, not knowing what was coming down the road, and those in his position.
I am disappointed in Labour’s response to this because it is a legislative opportunity to get this sorted quickly. The noble Lord, Lord Rosser, and I asked about keeping the policy under review, but it sounds from the Minister as if this is no more than the normal keeping of a policy under review: no detail, no particular plan, no timetable. What she said is not a reason not to pursue this amendment. As my noble friend says, this is not fair and I beg to test the opinion of the House.
Motion B agreed.
3A: Because local authorities are supporting children in care and those entitled to care leaving support to obtain UK immigration status under the EU Settlement Scheme.
I ask that this House do not insist on its Amendments 3, 6, 7, 8 and 10, as set out in Motions C, F, G, H and K respectively, to which the Commons have disagreed for their Reasons 3A, 6A, 7A, 8A and 10A.
I will speak to Motion C on Lords Amendment 3, which provides for children in care and care leavers who lose their free movement rights under the Bill to obtain indefinite leave to remain—or settled status—under the EU settlement scheme where they apply to the scheme or a local authority does so on their behalf. This would be regardless of how long the child or young person had been in the UK. I will also address Motions F, G, H and K, covering Lords Amendments 6, 7, 8 and 10, which cover a time limit on detention.
I know that the noble Lord, Lord Dubs, will be disappointed with me on the position taken by the other place on Lords Amendment 3, but I reassure him that the Government agree as to the importance of protecting the rights of children in care and care leavers and other vulnerable groups as we end free movement. The Home Office continues to provide extensive support to local authorities, which have relevant statutory responsibilities for this cohort, to ensure that these children and young people, like other vulnerable groups, get UK immigration status under the EU settlement scheme. This includes the Settlement Resolution Centre, which is open seven days a week to assist local authorities with this work. It also includes grant funding over last year and this year of up to £17 million to organisations across the UK to support vulnerable groups in applying to the scheme. The number of organisations funded for this work has now been increased from 57 to 72.
A recent survey of local authorities by the Home Office has so far identified fewer than 4,000 children in care and care leavers eligible for the EU settlement scheme, with over 40% of these having already applied for status under the scheme. Most of those who have applied have already received an outcome of settled status. Local authorities are making good progress to identify and support relevant cases.
The Government have made it clear that, in line with the withdrawal agreements, where a person eligible for status under the EU settlement scheme has reasonable grounds for missing the 30 June 2021 deadline, they will be given a further opportunity to apply. We have also made it clear that those reasonable grounds will include where a parent, guardian or local authority does not apply on behalf of a child. Therefore, if a child in care or a care leaver misses the deadline, they will still be able to obtain lawful status in the UK.
The Government are not therefore persuaded of the need for this amendment, which also presents some technical problems that the Government cannot accept. It effectively exempts this cohort from the suitability requirements of the scheme when there is absolutely no reason to do so. It also seeks to backdate the settled status granted following an application made after the 30 June 2021 deadline. This runs completely counter to the general operation of the Immigration Rules made under the Immigration Act 1971, under which status has effect from the date on which it is granted.
I hope noble Lords will agree that, while understanding and supporting the motivation behind this amendment, the House should not insist on this amendment.
I shall now address Motions F, G, H and K on Lords Amendments 6, 7, 8 and 10, which relate to introducing a detention time limit on EEA and Swiss citizens. Detention is a very important issue that merits debate, but it is not directly relevant to the purpose of this Bill, which is to end free movement. The central point of the Bill is a commitment to a global immigration system, and equal treatment of immigrants from all nationalities as we exit the transition period. These amendments seek to impose a time limit on detention only for EEA and Swiss citizens, which would lead to a discriminatory position for those who are not. It is important to acknowledge that the other place disagreed to the amendment for these reasons.
On the substance of the amendment, to impose a 28-day time limit on detention is not practical and would encourage and reward abuse. No European country has adopted anything close to a time limit as short as that which is proposed in these amendments, and countries such as Australia and Canada have not gone down this route at all. We need an immigration system which encourages compliance but, where people refuse to leave voluntarily, we must have the ability to enforce that removal. We do not detain indefinitely; there must always be a realistic prospect of removal within a reasonable timescale, and this is a complex process that requires a case-specific assessment to be made for every single person for whom detention is considered.
A time limit would allow those who wish to frustrate the removal process to deliberately run down the clock until the time limit is reached and release is guaranteed. Under these amendments, any person in scope who is detained for 28 days will automatically be released, regardless of the facts of their case, including some foreign national offenders who present a genuine threat to public safety.
The Home Office operates a number of safeguards to review detention and prevent anyone entering detention who would otherwise comply with a removal from the community. Some 95% of people who are liable for removal from the UK are managed in the community while their cases are progressed. The detention gatekeeper and case progression panels are key operational safeguards. Where detention is deemed necessary, there is judicial oversight through bail applications to the tribunal, and the continuing detention of any individual remains under regular review by the Home Office.
Everyone in immigration detention is protected by these safeguards, which entitle them to apply for bail hearings at any point, to appeal against any refusal of asylum and to have access to legal representation. If we accept a 28-day time limit, it will enable these people to exploit the immigration system, making unmeritorious claims to avoid their removal. In the current immigration system, it is only in the most complex cases that detention exceeds 29 days. A time limit would cripple the function of the detention system, exposing it to abuse, undermining our capacity to enforce removals and potentially endangering public safety. I hope that noble Lords will agree that this amendment is not only unconnected with the main purpose of this Bill but unsupportable, and I urge them not to insist on this amendment, which would lead to unfair treatment between EEA and non-EEA citizens. I beg to move.
My Lords, I very much regret the rejection of the clause to which your Lordships had agreed regarding children in care. The Minister said on a previous occasion that we were united on children in local authority care needing a secure status. But insisting on this being achieved for this cohort—and we all understand the difficulties—through the EU settled status scheme rather than on a declaratory basis seems to indicate that the Government are more concerned not to acknowledge that the scheme cannot perfectly deal with every situation rather than to acknowledge the special situation of these children and young people.
The Commons formal reason is that local authorities are supporting this cohort, and the Government are funding support. Well, good—but what do the Government have to lose? The Minister in the Commons said that the idea of applying such a provision retrospectively runs counter to the general operation of the Immigration Rules. But when it is not a tightening of the rules, I do not understand the comment—but there it is.
I also of course regret the rejection of applying a time limit to the detention of asylum seekers and others. The suite of amendments applies clear criteria for detention, and national security would disqualify a detainee from the time-limit provisions. I do not think that it is right to use the position of foreign national offenders as if all detainees were offenders. The amendments would also prevent cat-and-mouse redetention.
The great majority of detainees are released eventually into the community, but they do not know when this will be. Again, the Commons Minister said that it was not possible just to detain someone indefinitely “as such”. That misses the point that there is no time limit, and that means a loss of hope. For months, people in the UK whose lives are restricted to some extent have been saying that they need to know when all this will end, which is understandable—and there is something of a read-across.
The Commons formal reason is that there are already procedural safeguards to ensure the lawfulness of the period of detention. They work so well that, as my right honourable friend Alistair Carmichael observed, £7 million in compensation was paid out last year for 272 cases of wrongful detention.
But I can at least use this opportunity to say how much we welcome the Court of Appeal’s judgment today quashing the judicial review and injunctions policy on the application of medical justice, with the intervention of the Equality and Human Rights Commission and the good work of the Public Law Project—not, if I have the Minister’s word correctly, an “unmeritorious” application.
We shall not pursue this matter today, but we will be back soon on the issue, because it is a matter of fairness and humanity.
My Lords, the decisions taken by the other place on all these issues are most disappointing. I thought my noble friend Lord Dubs made a convincing case, but sadly it was not listened to in the other place, as is so often the case now. I hope the Government will take a constructive attitude in working with local authorities to protect vulnerable children. Many local authorities have considerable pressures on them in terms of looking after children in care, and I hope the noble Baroness will confirm that there is a positive attitude from the Government to address these concerns, even if they are not prepared to accept my noble friend’s amendment today.
I note the comment—the noble Baroness, Lady Hamwee, also made the point—that the other Motions in this group make reference to all these dangerous criminals who would potentially be released into the public. I think we have to accept that the people we are talking about here are vulnerable people, and that if there are people who are dangerous criminals, there are other procedures to deal with them. We should not be wrapping people up like that: these are vulnerable people who need our help and support. There is an issue about people being locked up in detention when they have done nothing wrong and not knowing when they will get their release date.
The noble Baroness may well say that they are normally released into the community. That is obviously really good news, but if you are locked up in a cell or in a detention centre and you do not know when you will be released, the fact that you will be released at some point in the future may not be a huge comfort to you. Again, we are not going to pursue these issues any further today, but the fact that the Government rely on those arguments underlines the weakness of their case in this respect. The noble Baroness, Lady Hamwee, said that we will return to these issues at a later date, but we will not be pressing any of them today.
I thank noble Lords for their comments. The noble Baroness, Lady Hamwee, initially challenged me on what the Government have to lose. It is not really about what the Government have to lose; it is a demonstration that, throughout this process, we have constantly articulated just what the Government are doing to ensure that children in care, or other vulnerable people, are able to register for the EU settlement scheme. We have put in quite a lot of resource to ensure that that happens. We have increased the number of organisations helping in this regard from 57 to 72 and we will put significant funding in place to ensure that people eligible to apply do so.
The noble Baroness, Lady Hamwee, said that we are acting as though all detainees are offenders, and the noble Lord, Lord Kennedy, talked about the number of people detained who are vulnerable. In fact, a snapshot of offenders from the EU detained at the end of March 2020 found that if a 28-day time limit were in place, we would have been required to release into the community 166 foreign national offenders being held under immigration powers to effect their deportation. Of these offenders, 35 had committed very serious crimes, including murder, rape, offences against children and other serious sexual or violent offences. There is no indefinite detention, but it is necessary sometimes to keep people detained, particularly serious offenders and those frustrating their removal.
My Lords, I have received no requests to speak after the Minister, so I shall put the question.
Motion C agreed.
4A: Because it would involve a charge on public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
My Lords, Lords Amendment 4 and Amendment 4B in lieu, tabled by the noble Lord, Lord Dubs, relate to family reunion and unaccompanied asylum-seeking children. I ask noble Lords to note that the other place highlighted that Lords Amendment 4 would engage financial privilege. Amendment 4B in lieu would remove the previous restriction on charging a fee for applications for leave to enter under the proposed new route; however, there remain a number of costs with this amendment. These relate to family reunion applications—not just the cost of processing the application but the cost of providing asylum support and accommodation for asylum seekers awaiting a decision on their claim. Clearly those costs could not and should not be recouped via an application fee.
Turning to the substance of the amendment, we had many interventions on this issue on Report and I confirm the Government’s commitment to the principle of family unity and to supporting vulnerable children—we take their well-being very seriously. We have a proud record of providing safety to those who need it, through our asylum system and world-leading resettlement schemes. We have granted protection and other leave to more than 44,000 children seeking protection since 2010. The UK continues to be one of the highest recipients of asylum claims from unaccompanied children across Europe: we received more claims than any EU member state in 2019, and 20% of all claims made in the EU and UK.
We have made a credible and serious offer to the EU on new arrangements for the family reunion of unaccompanied asylum-seeking children. It remains our goal to negotiate such an arrangement. I reaffirm my commitment to further constructive engagement to identify ways to level up access to safe and legal work pathways for talented displaced persons. I once again thank the right reverend Prelate the Bishop of Durham and Talent Beyond Borders for discussing this with us and I look forward to continuing to work together to attract the best and brightest talent to the UK, regardless of background. Furthermore, as the Home Secretary made clear in her speech at the Conservative Party conference, safe and legal routes are a core part of our proposed reforms to the asylum system to ensure that it is both fair and firm.
I therefore ask the noble Lord, Lord Dubs, not to insist on his amendment, or to divide the House on Amendment 4B in lieu. I beg to move.
Motion D1 (as an amendment to Motion D)
4B: Insert the following new Clause—
“Leave to enter: family unity and claims for asylum
(1) For at least such time as a relevant agreement has not been concluded and implemented, a person to whom this section applies must be granted leave to enter the United Kingdom for the purpose of making a claim for asylum.
(2) This section applies to a person who—
(a) is on the territory of any relevant Member State;
(b) makes an application for leave to enter for the purpose of making a claim for asylum; and
(c) would, had that person made an application for international protection in that Member State, have been eligible for transfer to the United Kingdom under Regulation (EU) No. 604/2013 by reason of a relevant provision if the United Kingdom remained a party to that Regulation.
(3) The Secretary of State shall make arrangements to ensure that applicants receive a decision regarding their application under subsection (2)(b) no later than two months from the date of submission of the application.
(4) A claim for asylum made under subsection (2)(b) must remain pending throughout such time as no decision has been made on it or during which an appeal could be brought within such time as may be prescribed for the bringing of any appeal against a decision made on a claim or during which any such appeal remains pending for the purposes of section 104 of the Nationality, Immigration and Asylum Act 2002 (pending appeal); and a claim for asylum remains one on which no decision has been made during such time as the claim has been made to the Secretary of State and has not been granted, refused, abandoned or withdrawn.
(5) The Secretary of State must, within six months of the day on which this Act is passed, lay before both Houses of Parliament a strategy for ensuring that unaccompanied children on the territory of a relevant Member State continue to be relocated to the United Kingdom, if it is in the child’s best interests.
(6) For the purposes of this section—
“applicant” means a person who makes an application for leave to enter under this section;
“claim for asylum” means a claim for leave to enter or remain as a refugee or as a person eligible for a grant of humanitarian protection;
“Regulation (EU) No. 604/2013” means Regulation (EU) No. 604/2013 of the European Parliament and of the Council including the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (recast);
“relevant agreement” means an agreement negotiated by a Minister of the Crown, on behalf of the United Kingdom, with the European Union in accordance with which there is provision for the transfer of a person who has made an application for asylum in a Member State of the European Union to the United Kingdom which is no less extensive than Regulation (EU) No. 604/2013 insofar as that regulation operated to enable the transfer of a person to join a child, sibling, parent or other family member or relative in the United Kingdom before exit day;
“relevant Member State” means a Member State for the purposes of Regulation (EU) No. 604/2013;
“relevant provision” means any of the following articles of Regulation (EU) No. 604/2013—
(a) Article 8;
(b) Article 9;
(c) Article 10;
(d) Article 16;
(e) Article 17.””
My Lords, in moving the amendment in my name, I shall comment on the Commons reason for rejecting an amendment from this House, which states:
“Because it would involve a charge on public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.”
Given the time we spent on the issue and its importance, to say that the technicality of financial privilege is sufficient to dispose of it in the eyes of the Commons, I think falls short of being humanitarian and falls short of respecting the opinions of this House.
When I was in the Commons, there were some colleagues who made themselves experts on parliamentary procedure and were virtually walking Erskine Mays. I have no wish to follow them down that path, but I note the issue of financial privilege seems to occur only when the Government do not like something to do with child refugees. If I can take the House back to 2016, we passed an amendment to the then Immigration Bill; when it got to the Commons the Government used financial privilege as a technical reason, so when it came back to this House we changed the wording and eventually it passed again and the Government accepted it.
Financial privilege, as defined in relation to this amendment, is merely a footnote to Erskine May. Still, it may be important to the Government. However, normally when an amendment involves some financial expenditure, a charge on public funds, the Government waive the issue of financial privilege. But they did not do so for this amendment or the one in 2016. I would contend that the majority of amendments passed by this House are inevitably bound to involve some charge on public funds. As I said, the Government normally waive this argument, but have not done so in this case.
However, with colleagues from Safe Passage and other NGOs who have been helping me with this, we looked at the amendment that the Government took exception to on the grounds of charge to public funds and removed from it the reference that there should be no fee for the making of a particular application. That has been removed, so there will be a fee.
Furthermore, the Government have said that they put forward a proposal—which we considered very weak and would exclude most of the children who ought to be eligible—which would itself involve some recourse to public funds. The Government must have been prepared for this. Frankly, I am not persuaded by this argument. The merits of the case are much too important to be sidelined on what I regard as a bit of a technicality.
I turn very briefly to the substance of the amendment, as a lot of the arguments have already been well rehearsed in this House in Committee and on Report. The Government are keen to say that the Immigration Rules might be sufficient. I contend that that will not do. The Immigration Rules are a blunt instrument; they are not susceptible to amendment by this House, and when changes are put forward again, they are on a “take it or leave it” basis. The Immigration Rules are not a sufficient excuse for saying this amendment is unnecessary.
It is also possible to apply for family reunion outside the Immigration Rules. This is a highly exceptional procedure that does not often happen. It is not a reason for rejecting the rights of a number of children who are desperate for safety.
We have only 10 weeks to go before the end of the transition period, and it does not look as if there will be any agreement on child refugees, even on the basis of the Government’s rather weak proposals, which I understand are not under discussion. The last chance we have before 1 January next year is to pass this amendment. We have seen and know of the difficulties facing young people who are sleeping rough under the trees in Calais or in the camps on the Greek islands. We have seen the terrible tragedy that befell the Moria camp when it was burned down. What will happen to the children and other people there? It seems to me that when other EU countries are willing to offer safety to some of the children in the camps on the Greek islands, the least we can do is to do likewise.
We are talking about a small number of young people, many of whom in the end make their way here across the dangers of the channel, either on the back of a lorry or in rubber dinghies. For some, there are tragic consequences—maybe they drown in the channel—but others manage to make it here. If we keep safe and legal routes open, there is at least a chance of having an orderly process which is fair to the young people involved—and to this country as well, because it means the process can be managed and they do not all arrive in Kent, putting a lot of pressure on the local authority there.
This is a really important issue. How we deal with family reunion for unaccompanied child refugees is crucial to whether we are a humanitarian country or not. I believe we are. I also believe, although not all people in this country will agree, that if the argument is put the majority will still say, “Yes, we should do the right thing by unaccompanied child refugees.” If passed, this amendment will give hope to a small number of very vulnerable children. I beg to move, and will wish to test the opinion of the House unless the Government agree to the amendment.
My Lords, I have not received any indication that any Member wishes to speak who is not listed. Does any noble Lord in the Chamber wish to speak at this point before I move on? In that case, I call the next speaker, the noble Baroness, Lady Meacher.
My Lords, I support most strongly the amendment of the noble Lord, Lord Dubs, which provides for refugee children to come to the UK from EU countries if they have family here with whom they can reunite.
The Government say they have proposals to deal with family reunion, but as the noble Lord has pointed out—I will not repeat his explanation—those proposals would not provide a secure route for child refugees to join their families here in the UK. Why is this country so much less willing than our neighbours in Europe to accept these vulnerable children? Germany stands out as the most generous and morally correct European country on this issue, having taken 71,000 children in 2019, but we do not even measure up to France, Greece or Spain—and two of those countries are a great deal less well off than we are.
It is important to note that local authorities, if adequately funded, are willing to welcome refugee children from Europe and, as my noble friend Lord Kerr pointed out on Report, the Government will have public support if they accept the amendment of the noble Lord, Lord Dubs. Surely the Government want some public support, do they not? They have enough problems on other issues at the moment. The British public understand the importance of refugee children being able to join their families, whatever the reason they became separated in the first place.
In her introductory remarks, the Minister referred to the costs of housing asylum seekers. Will she clarify that the Government would not have to fund the housing of unaccompanied children who come over here to live with their relatives? It is quite important that there is not that financial hit for the Government.
If the Government reject this amendment and children are not able to join their families under the Government’s proposals, many will inevitably resort to the traffickers and the rubber dinghies, with inevitable loss of life. Surely, it is only a matter of time before the Government are challenged under the Human Rights Act, in particular Article 8, on the right to respect for your family life. I would be grateful if the Minister responded to that point.
As the Minister will recognise, this amendment has huge cross-party support and public support across the country. I hope she can persuade her colleagues to accept it.
My Lords, at every stage, tributes have been paid to the noble Lord, Lord Dubs—rightly so, but I imagine he must sometimes be shouting at his screen, while on mute, “Forget the tributes, just accept the amendment.”
The Commons reason is that leave to enter to make an asylum claim, and a strategy to ensure that an unaccompanied child can be relocated in the UK if it is in the child’s best interests, would be, in their words, as the noble Lord said, a “charge on public funds”. Like him, I appreciate that this is a standard response, but it in no way reflects the debate. They trust that we will regard it as sufficient; it is not a sufficient reason.
We were told that it would not be right to undermine negotiations with the EU, with which, it must be said, agreement on this issue shows no sign of life at all. Domestic legislation must be the least threat in this context. It is still not too late to do the right thing.
Our Immigration Rules are inadequate, and applications outside them rarely successful. The Government have announced that they are looking at safe and legal routes for those seeking sanctuary next year. We on these Benches will not subscribe to the notion that this is an issue for next year. The routes are unsafe now, and we could make them considerably safer. We support the amendment.
Currently, the only legal way to reach this country from the EU in order to claim asylum, including for unaccompanied children, is through the Dublin III regulation on family reunion. That route, as we know, will cease to be available at the end of the transition period in a few weeks’ time. The Government have no comparable proposals to replace Dublin III, since their alternative removes the mandatory requirement to facilitate family reunion, removes a child’s right to appeal against refusal and further narrows the definition of “family”, since a child or teenager would no longer be able to join, for example, an aunt, an older sister or someone who could look after them when they have been separated from their parents
Safe Passage, to which reference has already been made, which supports child refugees, has said, I believe, that more than 90% of the young people and children it has supported through the Dublin III legal pathway would be unlikely to qualify under the Government’s alternative system. The numbers involved are not large and are very small indeed compared with the numbers of those from outside the EU whom the Government, by choice, each year, have enabled to come to this country. Before the mandatory Dublin III provisions came into effect, about 10 or 11 children per year came to this country under the scheme. Since 2016, when it became mandatory, the average number of children per year has been just over 500.
We support the amendment in lieu, Amendment D1, moved by my indefatigable noble friend Lord Dubs, which represents the guaranteed continuation of a decent and humane approach, particularly to children and young people in real need, including in real need of a safe and legal route to safety.
My Lords, I thank all noble Lords who have spoken in this debate and particularly the noble Lord, Lord Dubs, who makes this plea so genuinely and passionately. I hope, at this late stage, he might consider withdrawing his amendment to the Motion when he hears what I am going to say. First of all, we do not just use financial privilege for child refugees. That is not the case at all, but I think he knows that. The wording—
“trusting that this Reason may be deemed sufficient”—
is standard parlance.
I say to the noble Baroness, Lady Meacher, in response to her question, that it is true that the state does not have to fund children who are living with r