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Grand Committee

Volume 810: debated on Wednesday 10 February 2021

Grand Committee

Wednesday 10 February 2021

The Grand Committee met in a hybrid proceeding.

Arrangement of Business


My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, respecting social distancing, and others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down, and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.

Social Security Benefits Up-rating Order 2021

Considered in Grand Committee

Moved by

My Lords, the draft Social Security Benefits Up-rating Order 2021 and the Guaranteed Minimum Pensions Increase Order 2021 were laid before this House on 18 January. In my view, the provisions in these orders are compatible with the European Convention on Human Rights.

The Guaranteed Minimum Pensions Increase Order is an entirely technical matter that we attend to each year. It provides for formerly contracted-out defined benefit occupational pension schemes to increase their members’ guaranteed minimum pension which built up from April 1988 to April 1997 by 0.5%. This is in line with the increase in the general level of prices as at September 2020.

The Social Security Benefits Up-rating Order reflects the Government’s continuing commitment to support working families and pensioners across the nation, especially during a particularly challenging time for many. It will increase the basic state pension and the new state pension in line with the triple lock; increase the pension credit standard minimum guarantee in line with the cash increase to the basic state pension; increase working-age benefits in line with prices; and increase carer’s benefits and benefits intended to meet additional disability needs in line with prices.

In November, Parliament passed the Social Security (Up-rating of Benefits) Act. Without this legislation, state pensions would have remained at 2020-21 levels, because under the existing legislation there is no power to bring forward an uprating order to increase these rates in the absence of an increase in the level of earnings. The legislation allows for state pension, pension credit and widows’ and widowers’ benefit in industrial death benefit rates to be uprated for the 2021-22 financial year, benefiting millions of pensioners.

Under the Government’s triple lock commitment, the basic state pension will continue to be uprated by the highest out of earnings, prices or 2.5%. This year, the Government will draw on the power in the Social Security (Up-rating of Benefits) Act to maintain this commitment to the triple lock. The triple lock has been an invaluable tool in combating pensioner poverty and demonstrates this Government’s commitment to pensioners. This year, the basic state pension will increase by 2.5%, which is the highest of the triple lock figures. The basic state pension will rise to £137.60 a week for a single person. From April this year, the basic state pension will be over £2,050 a year higher in cash terms than in April 2010.

Five years ago, the Government introduced the new state pension, which provides a transparent and sustainable foundation for private saving and retirement planning for people reaching state pension age from 6 April 2016 onwards. We have also committed to increasing the new state pension by the triple lock. From April 2021 the full rate of the new state pension will increase to £179.60 per week.

Turning to the additional state pension, from April state earnings-related pension schemes and the other state second pensions, as well as protected payments in the new state pension, will rise by 0.5% in line with prices.

We are continuing to take steps to protect the poorest pensioners. This includes the pension credit standard minimum guarantee, the means-tested threshold below which pensioner income should not fall. The pension credit standard minimum guarantee will rise by 1.9% to match the cash increase in the basic state pension. Therefore, from April 2021, the single-person rate of this benefit will rise to £177.10, providing a valuable safety net to pensioners.

Working-age benefits will increase in line with prices—or 0.5%. This includes people receiving jobseeker’s allowance, employment and support allowance, income support, housing benefit and universal credit. Those benefits linked to child tax and working tax credits will also be uprated in line with those benefits. This increase to working-age benefits is in addition to the unprecedented support that this Government have provided to those affected by Covid-19. To support individuals through this challenging time, we have mobilised our welfare system with a wide-ranging package of measures worth more than £7 billion, benefiting millions.

The uprating review did not include a decision on the £20 per week uplift to universal credit and working tax credits, announced by the Chancellor as a temporary measure in March 2020. The uplift was enacted for one year under different legislation to support those facing the most financial disruption as a result of the Covid-19 public health emergency, so it is not referenced in the order. This is still being kept under review in light of the ever changing situation we find ourselves in.

Universal credit work allowances will also rise in line with prices. This means that an individual is able to earn more before their universal credit payment is reduced and directs additional support to some of the most vulnerable low-paid working families.

Finally, I turn to disability benefits. Carers and those who face additional costs as a result of their disability will see their benefits increase in line with prices from April 2021 to ensure that they continue to get the support they need. These benefits are: disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and personal independence payment. In addition, the carer and disability-related premiums paid with pension credit and working-age benefits, the employment and support allowance support group component, and the limited capability for work and work-related activity element of universal credit will also increase by 0.5%. The Government remain committed to protecting the most vulnerable.

To conclude, in this order the Government propose to spend an extra £2.7 billion in 2021-22 on increasing benefit and pension rates. With this spending, we are maintaining the triple lock, increasing spending on pensioner benefits by £2.2 billion and upholding our commitment to the country’s pensioners; helping the poorest pensioners who count on pension credit; and ensuring that working-age benefits maintain their value in relation to prices. This is in addition to the comprehensive support package already put in place to support those affected by the pandemic, providing essential support to disabled people and carers. On this basis, I beg to move.

My Lords, I thank the Minister and welcome the decision to increase the guaranteed pension credit by the value of the cash increase in the basic state pension. Pension credit is targeted at the poorest pensioners, and it has always surprised me that the Government, given their manifesto commitment to the triple lock for the basic and new state pensions, never committed to a protective underpin for our poorest pensioners. Some 1.5 million people receive pension credit, but over a million eligible pensioners do not claim. Now, by not claiming, many will see their annual income reduce by £157.50 when they get their TV licence demand. The BBC, by targeting pensioners in receipt of the pension credit for exemption from the licence fee, perversely excluded over 1 million eligible people for not claiming that credit. Recently there has been radio silence from the Government about how they are progressing and protecting this million, so can the Minister reassure the Committee that they are not walking away from the problem, having handed over policy on pensioners and the licence fee to the BBC?

In the UK, declining levels of household financial resilience were a growing problem before the pandemic and increasingly evident during it, contributing to the easements necessary to create a functioning welfare system. Factors that increase household resilience, such as employment benefits, state benefits, insurance savings and affordable credit, were all weakening. Indeed, only 28% of employers, for example, now provide more than statutory sick pay of £94.25 per week—a reality quickly evident when the virus started to spread. Did the Government give any consideration to increasing the rate of statutory sick pay by more than the 50p in this SI and, if they did, could the Minister share it with us?

I thank the Minister for her introduction and for the letter circulated previously. As far as I can tell, as a non-specialist, the increases are either as required in statute or as promised, with additional discretionary increases that can apply for one year only. That leaves me slightly confused as to what happens after that one year. Perhaps the Minister could explain, as I have not been part of the teams and meetings with her.

Broadly, I do not quarrel with the SIs. Where there are issues, it is with the underlying structures that, notably through the triple lock, reward at a higher rate than those benefits that apply to the harder up. I appreciate that the increase in the basic state pension in cash terms has been transposed over to pension credit but, given that there are other thresholds in play, are there pensioners who will lose out due to the increase in thresholds being less than the 1.9% cash increase?

Regarding the triple lock, can the Minister advise on where we are with the original catch-up idea, which came about because pensions had fallen behind earnings? We have had unexpectedly low earnings rises, and now again through Covid, and there has been low inflation. Originally it was projected that it would take until 2038 for the state pension to reach 26% of national earnings. Is there a new projected date by which that will be reached?

Once again, it is still unfair that the over-70s get the triple lock on only part of their pension and not the whole of it.

My Lords, I congratulate my noble friend on introducing these SIs and her very clear explanation. Of course, I welcome the Government’s commitment to protecting the vulnerable and the poorest pensioners. Indeed, it is really important for us to make sure that we protect pensioners properly.

As my noble friend knows, I find it difficult to reconcile the statements and the commitment to the triple lock when the triple lock does not apply properly to either the oldest pensioners or the poorest. The basic state pension is £42 less per week than the new state pension, which is available only to those pensioners not over 70. Pension credit increasing in line with the cash increase in the basic state pension is welcome, and is certainly better than prescribed in legislation, which would see an increase in line with earnings, which could be a fall or no increase at all. However, this still leaves the oldest and poorest pensioners at a disadvantage relative to the youngest pensioners, who have much better protection from the triple lock.

I welcome the fact that these benefits are increasing but urge my noble friend, in line with the comments of the noble Baronesses, Lady Drake and Lady Bowles, to look at whether there is an appetite in the department to ensure that pension credit for the poorest pensioners is covered by the triple lock.

On the subject of pension credit, I acknowledge the point made by the noble Baroness, Lady Drake, about the problem of low take-up and the poorest pensioners not necessarily receiving the free TV licence intended for them because they do not take it up. Does my noble friend agree that there might be merit in encouraging the BBC itself to make sure that there are promotions for increasing take-up of the pension credit?

My Lords, I want to comment on work-related benefits. I served on your Lordships’ Select Committee on Food, Poverty, Health and Environment. As we have seen in the past 12 months, one of the growing factors in front of us every day is more children being in poverty and unable to get proper food. UNICEF was even prepared to come into the United Kingdom for the first time. In these circumstances this year, while I fully support the principle that work must pay, I believe that there is an appetite in the community generally to tolerate a modest increase in tax and to target any revenue to eradicate what is a stain across our entire community.

Obviously, there are things I welcome in these instruments, but I must point out that we face the challenge of a whole generation losing out, and not only on school. At least two academic years have been disrupted and who is to say that there will not be a third? On top of that, we have the growth in food banks and people such as Marcus Rashford trying to target children’s needs in recent weeks. In the difficult economic circumstances that they face, I urge the Government to consider that there is, I believe, a preparedness in the community to tolerate a modest increase in tax, even for a couple of years in this Parliament, to ensure that that stain is removed from the United Kingdom.

My Lords, in my two minutes, I have only one issue to raise: the take-up of pension credit. The Minister will recall that many of us were concerned about the loss of free TV licences for those aged over 75, which broke a Conservative manifesto promise. Now only those on pension credit get free TV licences but, as my noble friend Lady Drake said, about 1 million people are eligible but do not claim, so they also lose their right to a free TV licence.

The Minister will also recall that some of us suggested to her a new take-up campaign—a much more vigorous and innovative one than any we have had previously. She kindly arranged for some of us to meet her and the Pensions Minister, Guy Opperman, in November, when they promised action. But more than two months later, apparently nothing has happened. Will the Minister now agree to get together urgently with those representing the interests of older people—Age UK, Age Scotland, Independent Age and all such organisations—and their media representatives to discuss how to launch a new, innovative, exciting, forceful and participatory campaign to get more people who are eligible to take up pension credit? The Minister may also notice that I have, I hope helpfully, tabled an Oral Question for answer on 8 March. That will give her an opportunity to report back on the success of such a meeting and the introduction of this campaign.

My Lords, I declare an interest as a trustee of the parliamentary contributory pension scheme. Looking at the detail of the Guaranteed Minimum Pensions Increase Order 2021, one has to remember that it applies only to those who retired before 6 April 2016. I looked at what would have happened if I had retired on that date and at life expectancy data. It would mean that I got 29 years: that is not a small financial commitment for Her Majesty’s Government.

I want to talk about the triple lock. If one thinks about the challenge to the Treasury—in effect, the taxpayer—it is almost a triple whammy. There is the basic state pension, based on national insurance contributions; the additional state pension, which is partly earnings-related; and all final salary schemes for public sector workers. The financial cost in the past three years has gone up by 21%, which is over £1 trillion in real money. Has not the time come for the Government to review the employee’s contribution through national insurance, and for the public sector as well? This seems fair, not least because a pension—one that is pretty old—is a really good deal. Of course, the cost of that state pension is forecast—admittedly over 50 years—to rise from 4.9% of national income to 6.9%. We need a clear positioning paper, produced by the interested parties in the Government and the pension industry, to look at the financial options for the national pension and state employee pensions.

I offer one saving: the £10 Christmas bonus. This year, after the pandemic, the Chancellor can say, “Father Christmas has run out of money and there will be no Christmas bonus for this coming year.”

My Lords, I want to highlight three issues. First, on pensions policy, I welcome the Government’s proposal to increase pensions by 2.5%, in line with the triple-lock policy. Despite criticism, that triple lock helps to redress intergenerational unfairness and keeps pensioners’ incomes higher than they would otherwise be, given the relatively low basic level of state pension in the United Kingdom compared to other countries.

Secondly, regarding the Guaranteed Minimum Pensions Increase Order, I want to highlight the unjust frozen pension policy that affects some 500,000 pensioners who, despite paying into the system—and in many cases serving their country—have had their pensions frozen since they moved to places such as Canada, Australia, South Africa and so on. This is a wrong that needs to be put right. Will the Government explain whether action will be taken at long last to pay these pensioners what they are entitled to?

Thirdly, I refer to the £20 a week uplift to universal credit and the working tax credit given last year. Of course, legacy benefits should also have seen the same uplift and the Government should explain why people on legacy benefits have not seen a similar increase. The extra £1,000 and more in universal credit has been very important in helping to support people facing terrible financial disruption from increased unemployment, as well as from increased food, utility and other unavoidable costs as a result of living and working from home. It is clear that the disruption and financial hardship due to Covid will continue beyond April. I urge the Government—I know that this is not a part of today’s instrument, but it is a very relevant issue when we are talking about the uprating of benefits—to announce as soon as possible that the uplift will be extended, rather than waiting nearly until April, when we are approaching a cliff edge.

My Lords, I associate myself totally with the remarks of the noble Lord, Lord Dodds, about universal credit and legacy benefits, but I want to say a bit more about the triple lock. I welcome the Government’s continued commitment to the triple lock and, without trying to pre-empt what will be in the Budget, it would be good to have an assurance that the triple lock will work again in the coming year. Can we have a firm commitment?

It is worth pointing out, as always when we talk about the triple lock, that it applies only to the basic state pension and the new state pension. It does not apply to the additional pensions, which some of us still think of as SERPS, it does not apply to deferred retirement additions and it does not apply to the graduated state pension. It would be interesting to have some idea of what proportion of the state pension actually gets the full triple lock and what proportion has had to make do with the very low figure of the CPI this year.

I have a further question about the TV licence. The Government’s approach on this has, of course, been shameful. However, I have heard some suggestion that what has happened to the TV licence has had the perverse effect, as some of us have said, of increasing government expenditure because it has encouraged a noticeable uptake of pension credit. Perhaps the Minister could indicate what net effect it is now having. I am very much in favour of anyone entitled to pension credit claiming it, but if the Government’s idea was to restrain expenditure, how successful have they been?

My Lords, I will try to be brief, as many issues have been raised by other noble Lords. In these challenging times for pensioners struggling with the pandemic, and with the over-75s faced with paying the BBC licence—in effect a tax imposed by the BBC—many pensioners will receive very little support from the Government. They cannot go on furlough; they are not self-employed; they cannot take out business loans. Many are not on benefits: they either will not or do not claim them. I am glad that the Minister has at least confirmed that the Government remain committed to the triple lock for pensions, but as a number of noble Lords have mentioned the triple lock, can the Minister confirm that this remains government policy, up to and including the next Parliament?

The noble Lord, Lord Randall of Uxbridge, has withdrawn, so I now call the next speaker, the noble Baroness, Lady Ritchie of Downpatrick.

My Lords, I thank the Minister for her explanation of the regulations. I accept that the Government have a statutory duty to review the rates of social security benefits annually. However, given the ongoing consequences of the pandemic, the rise in the levels of people unemployed and the growing number of people accessing food banks, there is a need for a root-and-branch review of social security and welfare policy.

We should be focused on the principles of the needs of the population. During various debates on social security matters in your Lordships’ House, I have raised this viewpoint. There needs to be a review through the lens of whether people have adequate or inadequate levels of income to live on, taking in poverty levels, the growing need for access to food banks and rising levels of fuel poverty. Like the noble Lord, Lord Dodds, I agree that the uplift in universal credit needs to be retained. It should also have been applied to legacy benefits. The very fact that it was introduced by the Government, albeit temporarily basis, surely pinpointed the need to uplift benefits and to have a complete review. I ask the Minister a simple question: when will the Government undertake this root-and-branch policy review of social security and welfare legislation to bring benefit to people, based solely on income and the needs of each individual in the UK?

My Lords, I am delighted to follow my friend, the noble Baroness, Lady Ritchie. I congratulate my noble friend the Minister on all that her department has achieved, particularly the new uptake of universal credit claimants, for which she is responsible. This has been a mega-task and it has passed smoothly, so congratulations are in order. An extra £2.3 billion on increasing benefit and pension rates is commendable.

I thank my noble friend for bringing these two orders before the Committee. I am anxious for her to respond to matters that were raised at the end of January, when there was a situation relating to a small but defined cohort of women whose state pension records had not been manually updated. These were women born before 6 April 1953 who were not automatically paid their state pension benefit uplift, which was based on their husband’s national insurance contributions. This has caused a lot of concern to the pension sector and I know that the department will seek to resolve it as quickly as possible.

Like other noble Lords, I would like to comment on the point raised by the noble Lord, Lord Foulkes, that only those on pension credit can claim the free television licence. It is a matter of record that the Government made specific provision with the BBC for the continuation of free television licences for all pensioners over the age of 75, irrespective of whether they were in receipt of pension credit. It behoves the department to go back to the BBC and ask what that money, which was allocated for this purpose, is being used for. If it has gone into the general pot and is being used for productions, that is not a good use of the money; it is not what it was specifically allocated for. I hope that my noble friend will use her good offices to look into that matter. Otherwise, I congratulate her on bringing forward these two orders, which I support.

I thank the noble Baroness for the clarity of her presentation. I agree with the noble Baroness, Lady McIntosh, that thanks are due to DWP staff for their response to the huge uptake of universal credit as a result of the pandemic. I also welcome the £20 a week addition to universal credit and working tax credits and strongly urge the Government to continue this.

There is no doubt that the pandemic has hit the poorest hardest, in terms of both vulnerability to the virus and loss of earnings and employment. A report by the Resolution Foundation, The Debts that Divide Us, is based on the results of surveys of families receiving universal credit. It tells us that more than half of all single parents are now on universal credit. It also shows evidence of the extent to which universal credit claimants are experiencing financial difficulties. One-third of new claimants report that their family income in January was at least 40% lower than pre-pandemic; one in five are behind on essential bills; and three in 10 are more in debt than a year ago.

Looking ahead, the Government must soon make a decision on whether to continue the additional £20 for universal credit and working tax credit. The report tells us that, if this is not continued, basic unemployment benefit will be at its lowest since 1990-91. Stopping the additional payment will contribute to a rise in child poverty of 400,000 by 2021-22. As the noble Lord, Lord Empey, said, this is an absolute crisis, as has been made clear by the fact that many children are now not getting enough to eat.

I am sure that the noble Baroness is familiar with the report by the House of Lords Economic Affairs Committee—chaired by her noble friend, Lord Forsyth of Drumlean—Universal Credit Isn’t Working: Proposals for Reform. It recommends a major review of universal credit in the light of dramatically changed economic circumstances. The noble Baroness, Lady Ritchie of Downpatrick, is right in calling for a root-and-branch review. We need to look at the new circumstances which the current system was not designed for. For example, recommendations in the report suggest that the Government should commit to making the increase in the standard allowance permanent. It also talks about the review of the benefit cap:

“In light of the unfolding economic crisis we recommend that the Government review the level of the benefit cap and its effect on hardship and poverty.”

It also makes clear that the two-child limit is unfair:

“We urge the Government to remove the two-child limit and consider introducing tapered awards for families with more than two children.”

As I said, I very much support a root-and-branch review.

I welcome the Government’s commitment to retaining the triple lock and support the call by the noble Lord, Lord Davies, for a confirmed commitment from them to provide pensioners with clarity for the future. My noble friend Lady Bowles asked that we should look at what progress has been made in recovering the value of the state pension and I would welcome that. The commitment to the poorest pensioners is of course welcome. They have paid their contributions over many years and should reasonably expect to receive a realistic income in their old age. I welcome the comments of the noble Baroness, Lady Altmann, and the noble Lord, Lord Dodds. As other noble Lords have said, the state pension is the lowest in Europe; we are culpable for having allowed this to happen over recent years. I attended the meeting with the noble Lord, Lord Foulkes, about getting the BBC to run a proper take-up campaign for pension credit. We would welcome the Minister’s response to that.

As we face the economic costs of the pandemic and Brexit, it is also important to keep the triple lock, as future generations are unlikely to benefit from the same generous private pensions as their parents. It will be all the more important for the state pension to provide a realistic income. I support these orders and look forward to the Minister’s response to my questions and those raised by other noble Lords.

My Lords, I thank the Minister for introducing these orders and all noble Lords who have spoken today. The guaranteed minimum pensions order is a routine uprating, but I have one question about it. When the House debated the GMP increase order on 3 March last year, I asked the Minister what guidance the DWP would give to pension schemes in the wake of the High Court decision on the Lloyds pension scheme. At that point, some matters had still not been clarified by the court, particularly in relation to past transfers out. However, on 20 November 2020 the High Court ruled that pension schemes have to proactively revisit individual transfer payments made since 17 May 1990, to check if any additional value is due as a result of GMP equalisation. Members who exercised their statutory right to transfer their benefits will be able to have a top-up payment if there is a shortfall between the original transfer payment and what would have been paid if benefits had been equalised at the time, with interest at 1% per annum.

The judgment clarified trustees’ obligations to revisit past individual transfers out when it comes to equalisation, but it also begged the question of how easy it would be for trustees to trace transfers back to 1990. Some schemes may face difficulties in complying. The data may no longer exist or the cost of checking and contacting members may exceed the benefit to them. There are no time limits on claims. Although the court judgment confirmed that past individual transfers must be equalised, details of implementation were left to schemes to decide. Will the Minister update the Committee and say whether the DWP plans to issue any further guidance and support to pension schemes?

On the social security uprating, Labour supports the Government’s decision to honour the triple-lock commitment that will see the basic and new state pensions rise by 2.5% this year. I am glad that the increase has been passed through to the standard minimum guarantee and pension credit. I will be listening carefully to hear the Minister’s answers to the crucial questions raised by my noble friends Lord Foulkes and Lady Drake and to the information relating to pensions sought by my noble friend Lord Davies of Brixton and other noble Lords.

Can the Minister explain the rationale for uprating the savings credit threshold in pension credit only by CPI? The other main working-age benefits and allowances go up in line with September CPI at 0.5%. I am glad that there is an uprating, but people are still suffering the effects of the Government having frozen benefits between 2016 and 2020. Excluding the Covid-related increases, most working-age benefits were between 9% and 17% lower last year than they would have been if benefits had been uprated by CPI since 2010. Those figures are from the House of Commons Library.

When the Minister mentions £7 billion in pandemic support, has she remembered that the OBR estimated that the 2015 Budget would cut more than £9 billion from social security spending by the end of this financial year? No wonder that, prior to the £20 uplift, unemployment support was at its lowest level in real terms since 1992.

I have four questions for the Minister. First, what is happening to the £20 a week uplift to universal credit, an issue raised by many noble Lords? Is it still being taken away in April? Parliament and, more importantly, those who depend on universal credit need to know. Increasing UC by 0.5% is neither here nor there if the Government are going to take £20 a week off it in April. People need that money. Has the Minister read the latest report from the Resolution Foundation, mentioned by the noble Baroness, Lady Janke? Has she heard Citizens Advice say that of the people it is helping, three-quarters of those on uplifted benefits would have a negative budget if the £20 was cut? Has she read the Trussell Trust research showing that one in five UK claimants reported it very likely that they would be forced to turn to a food bank? Has she heard CPAG warn that we are going to see another 200,000 children pushed into poverty? I concur with the concerns raised by the noble Lord, Lord Empey, about food poverty, but I add that a growing number of poor children are in working families.

What about the number of older workers, which is growing during this pandemic? They are at particular risk of long-term unemployment. They do not need their income cut by £20 a week. What of the impact on economic recovery? Money given to poor families is not saved: that £20 a week is spent in shops and businesses, stimulating the economy. We all want to know, what are the Government going to do?

Secondly, why has the £20 not been extended to those on legacy benefits, as mentioned by many noble Lords? Many of them are disabled people or carers. The Disability Benefits Consortium surveyed disabled people claiming legacy benefits and found that almost half—44%—report being unable to pay rent and household bills. I have never had a satisfactory answer to this question, so let me try again: how do the Government justify this blatant unfairness?

Thirdly, why has the benefits cap not been uprated? It has been at the same cash level since November 2016, and the growing number of families hit by the cap see no benefit from any increase, but their living costs are going up too. December’s figures show that 170,000 families are seeing their benefits reduced by £246 a month, on average; 85% of them are families with kids. As the nine-month grace period comes to an end, more and more people who fell out of work in this pandemic are going to bang their heads on that cap and will be hit badly.

Finally, why has bereavement support payment once again not been uprated at all? Can the Minister tell us by how much bereavement support payment has fallen in value since the Minister introduced it by abolishing the previous benefits? Why is it not being uprated?

People out there are desperate: they need help, and they, and we, look forward to the Minister’s reply.

My Lords, I begin by thanking all noble Lords who have spoken in the debate. They have demonstrated their vast experience of and commitment to the issues we have been talking about. The debate has covered a number of topics and, as ever, I will try to respond to them in the time available. However, I assure noble Lords that if that is not possible, I will write to them with answers to the questions put.

Let me start by answering the question put by the noble Baroness, Lady Bowles, and my noble friend Lady Altmann: whether the Government are committed to the triple lock. We are committed to ensuring that older people are able to live with the dignity and respect they deserve, and the state pension is the foundation of their support. As with all aspects of Government policy, we keep tax rates and spending under review, and any decision on future changes will be taken as part of the annual Budget process in the context of the wider public finances.

The noble Baroness, Lady Drake, and my noble friend Lady Altmann raised the issue of whether the standard minimum guarantee should be uprated by the same percentage as the state pension. It is right that we should protect the incomes of the poorest pensioner households receiving the standard minimum guarantee. That is why this year we are increasing the guarantee by 1.9% to ensure that, as in previous years when the triple lock has applied to the state pension, pensioners see the benefit of the cash increase in the basic state pension.

I come now to the point about pension credit which was raised by virtually all noble Lords. I thank the noble Lord, Lord Foulkes, for his contribution and for his reminder that this is a work in progress. After his Question about pension credit, we did meet, along with the Minister for Pensions, and we agreed on the actions to take away. We have written to the BBC. Officials have had a meeting with its representatives and we are awaiting the outcome of that meeting. As I say, this is a work in progress. At that meeting we also agreed to review advertising in places such as post offices and GP surgeries. That is a commitment, but there is little point in doing that while Covid is in full flow as not many pensioners are going into these places. However, we will revisit that as soon as things change.

The Minister for Pensions, Guy Opperman, also made a commitment to review all the correspondence sent by the DWP to see how we can change the wording in order to encourage people to apply for pension credit. The review has taken place and there are a few things we need to grapple with. When we write to people about attendance allowance and then about pension credit, we do not want the messages to become confused or for one to overtake the other. Again, officials are working on this. I can give an absolute commitment that when all this work has been completed, we will meet with the same noble Lords we met before as well as with stakeholders to advise them of the outcomes and actions arising from our deliberations.

The noble Baroness, Lady Drake, asked whether pension credit take-up had increased as a result of the BBC policy on free TV licences. I am told that it is too early to tell whether the BBC announcement about changes to the licence concession has translated into an increase in take-up. As I have said, the Minister for Pensions has written to the director-general of the BBC about its collaborating on pension credit. The noble Baroness, Lady Drake, and my noble friend Lady Altmann talked about the further campaign; I believe I have answered that question.

The noble Baroness, Lady Drake, and the noble Lord, Lord Foulkes, asked what we are doing to tackle the low take-up which means that 1 million pensioners will miss out on the pension credit uprating increase. More than 1.5 million older people across Great Britain already receive extra financial help through the pension credit. We want more eligible people to claim what they are entitled to, so in addition to the campaign we launched last February, we will take the actions that I have already outlined.

The noble Baroness, Lady Drake, made the point that statutory sick pay is not high enough. SSP is increased annually in line with CPI. Any greater increase in the rate of SSP would place an immediate and direct financial burden on employers at a time when we know that many of them are struggling. She also raised the question whether the rate is too low to live on. Statutory sick pay should not be looked at in isolation. Approximately 60% of employees receive more than the rate of statutory sick pay from their employer.

The noble Lord, Lord Empey, made the valid point that there are people who are prepared to accept a tax rise, even if only for a short period. I am sorry to say that I cannot make any further comment, other than to say that it is a matter for the Chancellor to take action on if he so desires.

The noble Baroness, Lady Bowles, asked whether the uprating of pension credit would be negated by changes made to other thresholds. Pension credit is not linked to the national insurance system; it takes into account income and capital according to its own rules. The noble Lord, Lord Dodds, raised the very important issue of uprating overseas pensions and the frozen pension situation. The current policy on this is a long-standing one under successive Governments; it has been in place for 70 years and with all respect to the noble Lord, we have no plans to change it.

We come now to the very topical point about the £20 uplift in universal credit. I understand noble Lords’ detailed interest in this matter, which was discussed yesterday at great length in the other place. Let me make the position absolutely clear. The £20 uplift to universal credit and working tax credit was announced by the Chancellor as a temporary measure in March 2020 to support those facing the greatest financial disruption. The measure remains in place until March 2021 and, as the Government have done throughout this crisis, they will continue to assess how best to support low-income families. That is why the Chancellor is looking at the economic and health contexts before making any decisions.

The noble Baroness, Lady Sherlock, and the noble Lords, Lord Dodds and Lord Davies, asked why the £20 uplift has not been extended to legacy benefits. Claimants on legacy benefits can make a claim for UC if they believe that they would be better off. Claimants need to check their entitlement under universal credit carefully before applying, as the legacy benefits will end when claimants submit their claim and they will not be able to return to them in the future. Again, with all due respect to noble Lords, we have no plans to extend it.

My noble friend Lord Naseby asked why the Government are no longer indexing the guaranteed minimum provision for those reaching state pension age. The additional state pension, and with it the option to contract out, ended with the introduction of the new state pension for people reaching state pension age from 6 April 2016. The calculation that provided, for benefits earned between 1978 and 1988, the effect of having their guaranteed minimum pension price protected ended as well. My noble friend also talked about the increase in national insurance contributions. Again, this is a matter for the Chancellor, but I will draw my noble friend’s points to his attention.

The noble Lord, Lord Truscott, asked whether the triple lock would be in place until the next election. As a result of the order, the Government announced measures to increase most state pension rates by 2.5%, in line with their triple lock manifesto commitment for this Parliament.

My noble friend Lady McIntosh asked about TV licence money and how the BBC has used its funding. I have an answer for my noble friend, but perhaps I may write to her, as I will on her point about ensuring that married women who have been underpaid state pension get what they are owed.

Time is short and I am sorry about that because I like to answer all the questions put to me. The noble Baroness, Lady Janke, asked about the benefit cap level, which, again, has been raised many times. The statutory duty is to review the levels of the cap in Parliament at least once a year. This will happen at the appropriate time. On the UC uplift and the reports of the Resolution Foundation, Joseph Rowntree and others, like the noble Baronesses, Lady Janke and Lady Sherlock, I am aware of them, as indeed is the department. The noble Baroness, Lady Janke, also asked about additional support for UC claimants if the uplift is not extended. We should await the outcome of the decision.

I am afraid that I will have to call time at this point. Having outlined the uprating orders for the guaranteed minimum pension and social security benefits, I commend them to the Grand Committee and I beg to move.

Motion agreed.

Guaranteed Minimum Pensions Increase Order 2021

Considered in Grand Committee

Moved by

Motion agreed.

Sitting suspended.

Arrangement of Business


My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2021.

My Lords, in moving these regulations, I will also speak to the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021. I am required to confirm to the Committee that these provisions are compatible with the European Convention on Human Rights. I am happy to do so. These statutory instruments will increase the value of lump sum awards payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the diffuse mesothelioma scheme, which was established by the Child Maintenance and Other Payments Act 2008.

These two schemes stand apart from the main social security benefits uprating procedure. However, through these statutory instruments, we will increase the amounts payable by the September 2020 consumer price index of 0.5%. This is the same rate that is being applied to the industrial injuries disablement benefit and other disability benefits under the main social security uprating provisions. These new amounts will be paid to those who satisfy all the conditions of entitlement, for the first time, on or after 1 April 2021.

The Government recognise that people suffering from diseases as a result of exposure to asbestos or one of a number of other listed agents may be unable to bring a successful claim for civil damages in relation to their disease. This is mainly due to the long latency period of their condition, but they can still claim compensation through these schemes. These schemes also aim, where possible, to ensure that sufferers receive compensation in their lifetime while they themselves can still benefit from it, without first having to await the outcome of civil litigation.

Although improvements in health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling, the legacy of its widespread use is still with us. That is why we are ensuring that financial compensation from these schemes is available to those affected.

I will briefly summarise the specific purpose of the two compensation schemes. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979—for simplicity, I will refer to this as the 1979 Act scheme—provides a lump sum compensation payment to individuals who have one of five dust-related respiratory diseases covered by the scheme, who are unable to claim damages from employers because they have gone out of business and who have not brought any action against another party for damages. The five diseases covered by the 1979 Act scheme are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis and primary carcinoma of the lung if accompanied by asbestosis or bilateral diffuse pleural thickening.

The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but were unable to claim compensation under the 1979 Act because, for example, they were self-employed or their exposure to asbestos was not due to their work. The 2008 scheme allows payments to be made quickly to people with diffuse mesothelioma at their time of greatest need. Under each scheme, a claim can be made by a dependant if the person with the disease has died before being able to make a claim.

The rates payable under the 1979 Act scheme are based on the level of the disablement assessment and age of the sufferer when the disease is diagnosed. The highest amounts are paid to those diagnosed at an early age and with the highest level of disablement. All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate, the highest rate of payment, reflecting the serious nature of the disease. Similarly, all payments for this condition under the 2008 scheme are made at the 100% disablement rate and based on age, with the highest payments going to the youngest people with the disease. In the last full year for which data is available—April 2019 to March 2020—3,220 awards were paid under the 1979 Act, totalling £42.7 million, and 450 people received payments under the 2008 Act, totalling £9.7m million. Overall, 3,670 awards were made across both schemes in 2019-20 and expenditure was £52.4 million.

I am keen to address the impacts of the Covid-19 pandemic on sufferers of pneumoconiosis and mesothelioma. While this uprating debate is an annual event, this has been a far from normal year. We took the difficult decision at the outset of the pandemic to temporarily suspend all face-to-face health and disability assessments, including for the industrial injuries disablement benefit, to protect the health of claimants and staff. We have continued to process industrial injuries disablement claims for those individuals with terminal illnesses. Therefore, throughout the Covid-19 pandemic and the suspension of face-to-face interviews, service centres have continued to pay the D3, mesothelioma, D8, lung cancer with asbestosis, and D8a, lung cancer in the absence of asbestosis cases, for workers’ compensation.

In addition, since November 2020, we have been assessing claims for D1, pneumoconiosis, including silicosis and asbestosis, and D9, unilateral or bilateral diffuse pleural thickening, prescribed diseases, so that claimants can start to receive the payments they deserve. While we expect the number of people diagnosed with mesothelioma to begin to fall in the coming years, the Government are well aware that there will still be many people who develop this and other respiratory diseases. That is why we are committed to working with our agencies and arm’s-length bodies to improve the lives of those with respiratory diseases.

The Covid-19 pandemic has presented major challenges for all healthcare systems. The NHS has published a cancer service recovery plan, which has been developed with the Cancer Recovery Taskforce. The plan aims to prioritise long-term plan commitments, which identified respiratory disease as a clinical priority and will support recovery, including the delivery of targeted lung health checks. We know that research is crucial in the fight against cancers such as mesothelioma. That is why the Department of Health and Social Care invests £1 billion per year in health research through the National Institute for Health Research.

I am aware that people suffering from occupational lung diseases are likely to be at higher risk of complications resulting from Covid-19, at what continues to be a distressing time for sufferers of the diseases that we are discussing today. The Department of Health and Social Care is following advice from independent experts on the Joint Committee on Vaccination and Immunisation on which groups of people to prioritise for Covid-19 vaccines. They advise that the immediate priority should be to prevent deaths and protect health and care staff, with old age deemed the single biggest factor in determining mortality. The JCVI has decided that it is safe for people with long-term conditions and that people who are high-risk should be prioritised to get the vaccine first.

Returning to these important regulations, I am sure we all agree that, while no amount of money can ever compensate individuals and families for the suffering and loss caused by diffuse mesothelioma and the other dust-related diseases covered by the 1979 Act scheme, those who have them rightly deserve the financial compensation that these schemes can offer. I commend the increase of the payment scales for these schemes and ask approval to implement them. I beg to move.

My Lords, I chose to join the Grand Committee for the consideration of these regulations this afternoon in part because of the experience of friends and family members older than myself who have suffered from mesothelioma and pneumoconiosis. I also pay tribute to those who campaigned so hard for the 1979 Act and those who campaigned for the changes in 2008, including the deputy leader of Sheffield City Council, Councillor Terry Fox, who was president of the National Association of Colliery Overmen, Deputies and Shotfirers and led a very successful campaign leading up to the 2008 changes.

I really respect the Minister and appreciate her explanation of what has taken place and the Government’s reaction in relation to the Covid-19 pandemic. As she said at the end of her contribution, it is hard to get across to people who have not met anyone who has suffered from mesothelioma or pneumoconiosis just what a tragedy it is for the individual and their family, and the debilitating impact that these diseases have on the longevity, mobility and life chances of those suffering. It was not simply something that happened in the coal and steel industries. I remember, as a young man, that with Turner and Newall in Leeds, it took great campaigners, media appreciation and investigation to bring about change. That was also true of the Sheffield occupational health project, which today works in GP surgeries and does a first-rate job on a shoestring to ensure that it can work with primary care to help those who have those diseases. As the Minister spelled out, it also helps those unable to identify their specific employment as the cause, mainly because the workplace no longer exists, but for whom it is absolutely clear that their illness was associated with employment and that those living around that employment have been affected. That was why the 2008 change came in.

I am sorry that we did not build in automatic uprating in 1979 and 2008, but I am very glad that the Government have, like previous Governments, taken this on board. It is appreciated on behalf of all those currently suffering and those still being identified that the Government, despite disagreements elsewhere over welfare payments, have recognised the enormity of what people are suffering and stepped up to the plate.

My Lords, it is a pleasure to follow the noble Lord, Lord Blunkett, and his reminder of just what a battle the miners had for proper compensation for pneumoconiosis.

Like many people speaking today, I suspect, I have a personal link. My sister, Betty, died of mesothelioma about 15 years ago. It is interesting what a pernicious disease it was. She died in her mid-70s, but one suggestion was that she might have contracted the disease when she left school and went to work in the local ICI, spinning fireproof clothing with cotton and asbestos woven into it. It was freely admitted that the disease might have an incubation period of 50 years. It is a pernicious disease and a cruel one.

I welcome what the Minister has announced today to the effect that notice has been taken of the impact of Covid. Of course, that is a respiratory disease, and one hopes that the understanding of how it could impact on people who are already in the early stages of pneumoconiosis suggests that they should have priority in terms of vaccination.

The 2008 Act was a great step forward, and Parliament can also take credit that there have been nudges since to remove some of the bureaucracy that was left in place so that people get action quicker and more effectively. However, I know from the time when I was a Minister the interest of the noble Lord, Lord Alton, who is not with us today—he is probably doing good somewhere else. Last year he reminded us that 5% to 10% of mesothelioma victims survive for fewer than five years and that we have the highest rate of disease anywhere in the world. So this is not a job done. However, so far as this order is concerned and in terms of the Minister taking responsibility for it, I think there is general confidence that in the noble Baroness, Lady Stedman-Scott, we have someone who will ask the right questions and demand the right action.

My Lords, I wish to voice my support for the Government in the financial assistance they continue to offer people who have been diagnosed with these terrible diseases. I appreciate that no amount of money can compensate for these life-debilitating diseases, which often lie on the lungs or in the body for years before detection. However, it can help them and their families. Given the impact of the coronavirus pandemic, particularly on the lives and the longevity of those with these diseases, could the Government look at whether there is anything more they can offer to them, be it additional funding, priority vaccines or some other new developments?

My Lords, while I welcome the mesothelioma order, I speak primarily to the pneumoconiosis order, which, as some colleagues may well remember, is close to my heart after the struggle we had between 1974—my first full year as an MP—and 1979 to get the 1979 Act on to the statute book. It was of huge significance for me and my constituency, in which were located many of the slate quarries, working in which had caused many constituents to suffer from silicosis and pneumoconiosis. The Act covered many other industries in which dust caused industrial lung diseases. I also had the Turner and Newall Ferodo factory in Caernarfon—and the noble Lord, Lord Blunkett, referred to the Turner and Newall dimension.

As time is limited, I will ask three brief questions. First, of the cases in which payments have been made in the past 12 months, how many arose from the slate quarrying industry? I realise that it would now be a small minority for two reasons: the scale of the industry has decreased, and many sufferers have either died or have already received benefits. Secondly, can the Minister give any indication as to how many applications have been turned down in the past year, and in those cases, what the main factors were leading to that refusal? Thirdly, and finally, on mesothelioma, can the Minister, who has referred to the impact of Covid on these schemes and referred specifically to lung health checks, please give some clarification as to whether the work of the rapid access clinics, which are vital for early identification of the disease, has been negatively impacted by coronavirus? The Minister has mentioned that time is of the essence. Indeed, it is a vital consideration. I realise that the noble Baroness may not have answers readily at hand, so if necessary, perhaps she could write to me on these matters and put a copy in the Library.

My Lords, as usual, this annual debate on the uprating of mesothelioma and pneumoconiosis regs invokes passionate memories of our industrial heritage and a different time for health and safety. The long latency of these diseases, which others have referred to, means that it can be many years before an individual is aware that they have been infected and, given that the main cause of exposure to mesothelioma is asbestos, its continuing presence in so much of our built environment, such as schools in particular, makes it a risk to be managed not only now but well into the future.

The Control of Asbestos Regulations 2012 are the HSE’s latest offering to help with that, which is to be commended. It is clear that these regs before us today should be supported. It is of regret, however, that it has not been seen fit to narrow or eliminate the gap between compensation paid to sufferers and to dependants. It was originally the intention that this gap be eliminated once resources allowed. It is understood that the 2008 Act payments were to be funded from recoveries from civil compensation arrangements. Can the Minister therefore let us know what the current position is on this and how close we are to closing that gap?

The 2014 payment scheme grew out of concerns that it was proving difficult for individuals to access entitlement to compensation under employers’ liability insurance arrangements; the tracing of policies was difficult and may have been frustrated in part by the industry. Can the Minister tell us what headroom there is in these arrangements? The Minister will recall that the scheme was funded by a levy of 3% on the gross written premiums of the industry. What data does the DWP have on the aggregate amounts of claims for lump sum compensation for mesothelioma, which come under three headings: the 2014 Act, these regulations we are considering to date, and employers’ liability insurance payments?

We have acknowledged in the past the medical research going on with the support of the insurance industry in particular, encouraged by Members of your Lordships’ House. If you look at the scientific and medical advances and endeavours in recent times, perhaps there is hope for sufferers of these diseases as well.

I first came across mesothelioma in the early 1970s when I was a railway manager in Liverpool. We used to stuff the boilers of locomotives full of asbestos, and of course it became widely known how lethal that was. I pay tribute to the huge efforts that have been made by the trade union movement to bring this matter to prominence. The trade unions often do not get a very good hearing in this House from various quarters, but this is a circumstance in which membership of a trade union is essential, when something like this comes across the horizon.

Could the Minister give us some idea of how many new cases are coming to light and whether there is any knowledge of which industries these come from? It would be comforting to know that this is one of the things which is getting better rather than worse.

My Lords, as a former civil servant, I had responsibility for compensation for industrial illness schemes. Updating the regulations is to be welcomed but I have two questions for the Minister. I agree with my noble friend Lord McKenzie about the unfairness for dependants.

My questions concern the 2008 mesothelioma regulations. First, Regulation 4(1) stipulates that the claimant’s exposure must have been in the UK. There used to be a considerable amount of asbestos on board ships, where mesothelioma—as my noble friend Lord McKenzie said, it has a long latency period—was contracted by many claimants. Can the Minister confirm that personnel at sea on UK ships outside territorial waters are in the UK for the purpose of the regulations?

Secondly, do the tables in the schedule take account of up-to-date increases in the average age of mortality when computing the relative amounts per age of the complainant? In that context, these sad deaths, usually caused in the ordinary routine of earning a living, are all the more premature and might merit larger sums.

My Lords, I declare an interest as the chairman of a company set up by a private company to pay compensation for asbestos-related problems. This is all very familiar territory. I will make only a small point because everybody else has said some good stuff.

I wonder how this compensation compares to legal decisions against private companies sued for asbestosis. I have been doing this compensation thing for about 15 years. It was on my suggestion that the company was set up by a big construction company that made asbestos. I have been following the numbers. At some stage, it might be useful to look at the legal decisions made by the courts—noble Lords will know that there have been changes to Scottish decisions and so on—which would enlighten us in revising our regulations. I just want to put that suggestion forward. If the Minister wants, I can get the data from our company, which was set up under Law Debenture. That is my suggestion.

My Lords, I thank the Minister for her introduction to the regulations on uprating benefits for sufferers of mesothelioma and other dust-related diseases. Like other noble Lords, I am pleased to support these regulations. I join them in paying tribute to the campaigners who continue to battle for more resources to fight this and other fatal lung diseases.

I want to mention in particular the British Lung Foundation, which not only campaigns for more research and awareness but provides support for sufferers and their families. It seems that, once diagnosed, many lung diseases are beyond treatment and sufferers are left with a very short time to live. I support the remarks made by noble Lords about equal treatment for families, which gives sufferers confidence that their families will not suffer unduly once they are no longer with them.

I must say, I was very much unaware of the ravages of lung disease. I became aware of it only when someone I know contracted it and subsequently died. Looking into the subject, I was shocked to learn that, far from being diseases of the past, which I thought they were, they are alarmingly on the increase; indeed, the UK leads the world in the number of deaths from mesothelioma.

As I understand it, these diseases, known to be caused by dust and asbestos in particular, are the result of working conditions. However, many sufferers are completely unaware of where they may have contracted their fatal condition. As noble Lords have said, there is still plenty of asbestos around, particularly in public buildings such as schools.

Certainly, much needs to be done to support work in this area, so I was pleased to hear the Minister talk about the millions that the Government are putting into research—occupational research in particular—but more research into the causes of these killer diseases is absolutely vital. The number of deaths from lung disease amounts to 20% of all deaths, yet research funding lags a long way behind that for other, better-known illnesses. The Health and Safety Executive estimates that occupational lung disease results in around 12,000 deaths a year, yet funding for this important agency has been cut repeatedly over the years. In addition to safe working conditions, monitoring needs to be provided in high-risk occupations such as construction, cleaning, baking and other artisan professions.

I ask the Minister to use her powers and influence to seek a more realistic level of support for research from the Government, and I support noble Lords’ request that the support for families be reviewed in future. Having said that, I certainly add my support to the regulations.

My Lords, I thank the Minister for introducing these regulations and the noble Lords who have spoken.

It is great to see some of the faithful stalwarts of previous debates back again this year, albeit on Zoom rather than in the Room this time. My noble friend Lord McKenzie has a long commitment in this area. Once again, the noble Lord, Lord Wigley, rightly raised the incidence of silicosis and pneumoconiosis among slate quarrymen—something raised in previous years by my noble friend Lord Jones. It is strange to be debating this without the noble Lord, Lord Alton; I am not sure that it is strictly legal. Most years, we have him here, speaking up for the victims of these awful diseases and advocating powerfully for the work of the British Lung Foundation. However, the medium has in no way diminished the passion and power of noble Lords’ speeches, even if it has curtailed their length a little.

I am grateful to my noble friend Lord Blunkett for talking about the impact on miners; to the noble Lord, Lord Bradshaw, for talking about those who made railway boilers; and to the noble Lord, Lord McNally, for telling us about his sister, Betty. It is heartbreaking to think of her working away for ICI, making fireproof clothing and having no idea that those awful seeds being planted would lie dormant for decades, only to bloom so awfully. I hope that we will never reach a point where we talk about these matters without pausing to think of those whose lives were cut short by these awful diseases and those who lost spouses, parents or friends. I pay tribute to the trade unions, charities and all those who have campaigned for this compensation.

Obviously, we support these regulations and are glad to see that, once again, the compensation in both schemes is being raised in line with the CPI, by 0.5%. Is it definitely the intention that this will happen every year from now on?

One of the issues raised by my noble friends Lord McKenzie and Lady Whitaker is the lack of parity between the levels of compensation being offered to sufferers and their dependants. It would be helpful if the Minister could remind us of the Government’s rationale for this distinction. Also, as has been mentioned previously, what assessment have the Government made of the impact of that disparity on women, who are more often the dependants? What is the latest estimate of the cost of providing equal payments?

Last year, the issue of medical research and investment in it was raised much more than this. I wonder what is happening, given the pressure on charity funding in the pandemic. Does the Minister know what is happening to charitable funding that goes into research? In the past, contributions have been made by some insurers. Can the Minister tell us what she knows of how that funding may be going?

In last year’s debate on the uprating regulations, a number of noble Lords asked for information about funding and the data held on the prevalence of mesothelioma, and my noble friend Lord McKenzie asked about progress on employer liability tracing. The Minister agreed to write once she had gathered that information, but I have not been able to find such a letter among the deposited papers, and the House of Lords Library was not able to trace it either. Can the Minister confirm that she did write? If so, will she place a copy in the Library, and would she confirm that all such future letters will be deposited for the record?

Finally, as my noble friend Lord McKenzie said so clearly, these dust-related diseases are a reflection of our industrial past and the carelessness with which too many employers approached health and safety. If we are to avoid future scandals, we need a strong Health and Safety Executive—a point raised by the noble Baroness, Lady Janke. But the HSE’s funding has been cut significantly since this Government came to power, and recent increases to fund the extra work caused by Brexit have not begun to make up for that. Can the Minister tell us how confident she is that the HSE is sufficiently well resourced both to manage the risks to employees in the current pandemic and to be alert to the health risks of the future, so that nobody else will be put through the next generation’s equivalent of the horrors we have been talking about today? I look forward to her reply.

My Lords, I thank everybody for their helpful contributions to this debate. The Government recognise that these two schemes form an important part of the support available to people with dust-related diseases such as pneumoconiosis, byssinosis, diffuse mesothelioma, bilateral diffuse pleural thickening and primary carcinoma of the lung. I hope to address all the points raised but, as always, if I run out of time, I will certainly write to noble Lords.

First, to pick up on the point the noble Baroness, Lady Sherlock, just raised about a letter, this came up in the office this week. My officials looked into it, and it seems that we did not write the letter as promised. That is being rectified at the moment, and I can assure the noble Baroness that it will be placed in the Library, as all other letters will be.

I thank the noble Lord, Lord Blunkett, for his contribution, and for paying tribute to the campaigners and eloquently telling us about the impact of these terrible diseases. Unless we have actually seen them, they are very difficult to appreciate. I add my thanks to all the health professionals for their support to people who require their help on this matter.

Moving to the noble Lord, Lord McNally, there is nothing I can say in relation to his dear sister. It is not a job done; we are on the case and we will keep it on the agenda. I say to all noble Lords that, on this matter and any other, my door is open to speak to them.

The noble Baroness, Lady Sherlock, raised the point that dependants are mostly women, and asked whether I have considered the equality issues by not equalising payments and about an impact assessment. The intention of this scheme was to compensate those who contracted diseases as a result of their working environment. Historically, those who worked in hazardous environments tended to be men, and this reflects the current gender balance of claims. Nevertheless, the 2008 Act compensates people regardless of whether they contracted their disease through work, and this recognises the indiscriminate nature of mesothelioma. We have not conducted an impact assessment on the uprating of the lump sum schemes, but the noble Baroness raised a very valid point which I will certainly take back to the department.

The noble Baroness, Lady Sherlock, asked why the uprating of the lump sum schemes has not been placed on a statutory footing. Each year, since 2004, Ministers have agreed that payments under the lump sum scheme can be uprated in line with inflation. Making this legally binding is extremely unlikely to make any actual monetary difference to those who benefit from these payments.

The noble Baroness, Lady Janke, and other noble Lords raised the point about government support and mesothelioma. This is absolutely critical in the fight against cancer, which is why the Department of Health and Social Care invests £1 billion a year in health research through the National Institute of Health Research. For several years, we have been working actively to stimulate an increase in the level of mesothelioma research activity from a low base. This includes a formal research priority setting exercise, a National Cancer Research Institute workshop and a specific call for research proposals through the National Institute of Health Research.

My noble friend Lady Gardner of Parkes asked whether we could offer more support. I will take this away and write to the noble Baroness to see if there is anything we can do.

The noble Lord, Lord Wigley, raised the point of payments made in the past 12 months and how many of those arose from the slate quarrying industry. My responses may be disappointing, but the information is not published or readily available, and it would require analysis of multiple datasets for the 1979 scheme. In the quarter ending March 2020, there were a total of 210 industrial injury prescribed disease first assessments in the mining and quarrying industry, which were accepted and payable. The noble Lord asked how many applications had been turned down and what the main factor was in these cases. Again, the information is not published or readily available, and it would require some intensive analysis of multiple datasets. Information on industrial industry first diagnosed prescribed diseases all assessments by standard industry classification is published in the industrial industries disablement benefit quarterly statistics. If the noble Lord needs any help in accessing those, I ask him to please let me know.

The noble Lord, Lord Wigley, also asked, in relation to mesothelioma, whether I can give some clarification on whether the rapid access clinics, which are so important to secure the vital early identification of the disease and thereby facilitate payment, have been negatively impacted by Covid-19. It is imperative that people get tested and that cancer patients continue to receive the treatment they need. Overall, cancer treatment services have been maintained throughout the pandemic. Between March and November last year, 203,000 people started treatment for cancer, and 95% of them did so within 31 days of a decision to treat.

In terms of the levy mentioned, it was £33.3 million for 2019-20 and £28.9 million for 2020-21. The noble Lord, Lord McKenzie, raised the point of equalising dependence payments for those made to people who have the disease. Again, the main intention of the scheme is to provide financial support to people living with certain diseases and to help them to deal with the issues the illness brings. It is right that funding is targeted where it is needed most, and around 90% of payments made under both schemes are paid to those who actually have the disease covered by these schemes. The noble Lord, Lord McKenzie, asked why we do not use money from recoveries towards the equalisation of dependence payments. The combined cost of the 1979 Act and 2008 Act scheme payments outweigh the money received from compensation recovery, so there is, of course, an overall cost to the Government.

The noble Lord, Lord Bradshaw, raised a number of points. The first was what the latest projections are of when diffuse mesothelioma deaths in Britain will peak. There is always a degree of uncertainty in predicting future disease incidence, but the annually published data from the Health and Safety Executive show that annual mesothelioma deaths have been broadly similar over the last seven years. Before that, annual deaths had been rising.

In response to the noble Baroness, Lady Whitaker, seafarers count as being in the UK. I will write to her with further information on that point.

On the point made by the noble Lord, Lord Desai, about how this compensation compares to legal decisions, I will certainly take him up on his offer. I will be in contact to do that.

The noble Baroness, Lady Whitaker, asked whether we will publish a breakdown of people with mesothelioma by age and occupation. Data on the incidence of mesothelioma was published on the Health and Safety Executive website. It can be found on the health and safety at work statistics page under the subheading of ill health. The breakdown is available by age, occupation and geographical location. Again, if the noble Baroness has any difficulty in accessing this, I hope that she will let me know.

The noble Lord, Lord Desai, made a point about anybody being worse off as a result of making a civil claim. The amounts paid under the 1979 Act were originally set at a lower rate than the usual amounts paid in damages in civil cases. It is therefore unlikely that the amount paid under the 1979 Act scheme or the 2008 Act scheme would be more than the damages received through a civil claim.

The noble Baroness, Lady Janke, and others mentioned research; I have dealt with that.

On the point made by the noble Baroness, Lady Sherlock, about the Health and Safety Executive having sufficient resources, I will go back to the Employment Minister, who has direct responsibility for this, and double-check before I answer. I will write to her.

I thank noble Lords for the way in which they have entered into this debate. This is a terrible disease with terrible consequences. Like the noble Baroness, Lady Sherlock, I hope that we will never debate this, as we do on an annual basis, without being moved by the impact of these diseases.

I commend the uprating of the payment scales for these schemes and ask approval to implement the regulations.

Motion agreed.

Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021.

Motion agreed.

Sitting suspended.

Arrangement of Business


My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.

Bank for International Settlements (Immunities and Privileges) Order 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Bank for International Settlements (Immunities and Privileges) Order 2021.

My Lords, this order was laid on 11 January 2021 under the affirmative procedure. It confers immunities and privileges on the Bank for International Settlements, BIS in short, that have been negotiated as part of a host country agreement to support the establishment of a new BIS innovation hub in London. The order is required so that the UK is able to comply fully with its obligations under the host country agreement. Before I go into further detail about the order, please allow me to provide some policy context.

In June 2020, it was announced that the Bank of England was successful in its bid to host a BIS innovation hub in the United Kingdom. The hub will conduct research on how new technology may change the way financial services operate in the future and help the global central banking community ensure that this innovation does not have a negative impact on consumers and the stability of the financial system. Most importantly, the hub will help develop and share best practices with central banks across the world, including in developing countries.

As we all recognise, the United Kingdom is a global leader in financial innovation and technology, and the UK’s fintech sector is worth nearly £11 billion annually to the economy. This success is largely due to the UK’s policy and regulatory expertise in financial innovation and fintech, and London being selected to host the hub reflects that. To pick just one example, the UK was the first jurisdiction globally to implement a “regulatory sandbox” to support financial firms in the testing of innovative products and services. This initiative has now been replicated by countless regulators around the world.

As countries, particularly developing ones, grapple with the emergence of new financial technologies and the rapid increase in the use of digital payments, it is only right that we support the creation and sharing of best practice in this area with the international community. Let me now turn to the details of the order.

This order confers legal capacity and immunities and privileges on the BIS and persons connected with the bank, such as staff and secondees. These have been negotiated as part of a host country agreement. The International Development Act 2002 allows the Government to give effect to such provisions made in an agreement establishing an international financial institution. The negative order linked to this order, which came into force on 1 February, added the BIS to the list of international financial institutions referenced in the 2002 Act.

The BIS is an international financial institution, headquartered in Switzerland, with a mandate to support global monetary and financial stability. It therefore shares similar policy objectives with other international financial institutions, such as the International Bank for Reconstruction and Development and the International Finance Corporation, which are part of the World Bank Group. I can reassure noble Lords that the proposed legislative changes make no other amendments to the International Development Act and that the immunities and privileges afforded to persons connected with the bank, such as staff and secondees, are strictly limited to those required for them to conduct their official activities and are not for their personal benefit.

It is customary practice to grant immunities and privileges to international financial institutions to enable them to function and they are in line with those offered to officials of other international financial institutions of which the UK is a member. These include immunity from suit and legal process for its staff in respect of their official acts, and tax exemption. They do not include immunity in respect of road traffic accidents.

To conclude, this order confers only those immunities and privileges on the Bank for International Settlements and persons connected with the bank such as staff and secondees that are necessary for the institution to function effectively and conduct its official activities in the UK. The new BIS innovation hub will help to ensure that rapid advances in financial innovation will benefit consumer outcomes and, as I said, support financial stability. This is an area where the United Kingdom already enjoys a competitive advantage and the hub will help to share best practice with the international central banking community, including throughout the developing world. I beg to move.

My Lords, I thank the Minister for introducing the order, which confirms an interesting and potentially very useful innovation. I have just one question. The order confers an extraordinarily widespread immunity on those managing this new hub. I am aware that the Minister has made it clear that these immunities are not for personal gain; nevertheless, employees of the hub are, apart from some civil liability in arbitration, effectively above the law in all their professional work. What steps will the Government take to ensure that individuals do not seek to abuse these privileges?

My Lords, I welcome the establishment of the hub in London, which is renowned for its skills in the financial sector and in regulation. This testimony to that is therefore very welcome. I understand why a degree of what we might call diplomatic immunity may be required, although the total freedom from immigration restrictions is interesting because we have huge pools of labour in this country that could do the work that I guess will be done within the hub. Could the Minister say whether those who will be coming into the UK to work at the hub, and will come in free of any immigration controls, will actually be doing jobs that could perfectly easily be done by the many skilled people we have in the City of London?

More broadly, I welcome the areas in which the innovation hub will be involved. It will play to the strengths of the City and those areas where we are renowned, particularly fintech, which is a growing sector in the UK, and regulation, where we like to think we are ahead of the curve. I am not always so sure of that. However, we are told that one area that the hub will be looking at carefully is that of central bank cryptocurrencies and how these should be regulated. My real question is allied to that because I am deeply concerned about the growth, not in central bank cryptocurrencies, but in cryptocurrencies generally. Noble Lords will have seen that the price of bitcoin, which fluctuated hugely in January, between $34,000 and $47,000, has again leaped into the news because Elon Musk is putting $1.5 trillion into it. While the founder of Tesla can afford to lose $1.5 trillion, although I am convinced he has no wish to do so, my concern is that a lot of people will be persuaded to put hard cash into bitcoin because Elon Musk has done so, and their money will be at risk.

Bitcoin is not regulated; indeed, none of the cryptocurrencies is regulated as such. Derivatives of cryptocurrencies are regulated. I think that the time has come for the UK to lead the way in regulating completely these new and potentially very dangerous currencies. The US is beginning to look at this and the SEC is now considering whether to prosecute XRP, which, far from being a currency, looks like a scam. I fear that there may well be more of these, so I would be grateful if the Minister could tell me whether he has any means of persuading the innovation hub in London to pioneer regulation—[Inaudible.]

My Lords, I am pleased to take part in this short debate and to add my support to the initiative of the Bank of England and the Government in bringing the Bank for International Settlements innovation hub to the UK. As other speakers, including my noble friend Lady Wheatcroft, have said, we are acknowledged as leaders in fintech and the combination of domestic skills and this institution will further consolidate that situation. I hope that the furtherance of the work of the hub will not only benefit the UK and the developed economies but will also directly impact on development of the weaker economies of the world. The bank itself has good intentions but is not yet as representative globally as I would like it to be. Can my noble friend assure me that, by hosting this hub, we will also encourage the bank to institute wider membership from those parts of the world that are currently underrepresented in its counsels?

I turn to the interesting way in which the order is presented, and the measures and entitlements it offers to bank staff and dependants. We are, of course, fully acquainted with the diplomatic immunities offered to ambassadors and others who represent their countries here in the UK, which are confirmed by the various Vienna conventions and the convention on consular relations, followed by the Diplomatic Privileges Act 1964. I will move off my script for a second. Knowing of the incredible diplomatic skills and charm of the Minister, might he have a word with his friends in the Foreign Office and see if we cannot sort out this ongoing problem regarding the diplomatic status of the EU’s ambassador? I would be pleased if he would. Having said that, I will go back to my script. In recent years, from time to time, we have witnessed some of our guests and their staff interpreting the privileges they have here in a wider context than the normal caveat of “relating to acts performed in the course of their duties”.

As we all know, there are also other immunities from prosecution available to our own citizens, where the Crown Prosecution Service believes that this might aid the conviction of a criminal, where co-operation is a key element. However, I would be interested to know how many organisations like the bank under discussion today have currently enjoyed the special immunities that this order confers? For instance, I know that the International Maritime Organization is based in London. Does it and its staff enjoy these privileges? I am assuming that there are many others too, so perhaps my noble friend might elucidate on this. I see that, in this case, the offer of immunity was a condition of securing the bid to have the bank here. Apart from any other cases of a similar kind, is it now a normal expectation that such immunities have to be offered? Is there international precedent, pursued by other states in such bids? Where others have been successful and we have not, is that because they have made better offers of this kind?

This order is also unique in allowing the exercise of Section 12 of the International Development Act 2002 for the very first time. An Order in Council by Her Majesty is an interesting feature of this measure, especially as it relates to immunities and privileges of a non-domestic body. Can my noble friend enlighten the Committee as to whether this is now regarded as a precedent in any way? Regardless of the general immunities which this order will confer, I note, as a former Immigration Minister, that bank officials and staff will, additionally, have the benefit of exemptions from immigration controls for their dependants. Was this extra provision requested as part of the bid process, or offered because of any other precedents? The main immunities are to BIS officials and employees and are wide, but the extension to dependants appears in the negative Order in Council.

The securing of this facility for the UK is, of course, to be welcomed. Only the Government and the Bank of England know the details of the competition to win the bid but it is obviously important and of interest to all noble Lords, as legislators, to be aware of the terms we need to offer in global competitions of this kind.

My Lords, this SI has been prepared by the Foreign, Commonwealth and Development Office. The Bank of England has made a successful bid to host the Bank for International Settlements innovation hub in the UK. In order for it to operate in the UK, it is necessary to grant immunities and privileges which will be effected in the host country agreement between the UK and the BIS when it is signed. These privileges and immunities have been negotiated between the UK and the BIS in the HCA and are the most limited, consistent with the functionality of an international financial institution.

The HCA will come into force once this Order in Council has been approved. The UK has agreed to grant certain privileges and immunities for BIS officials, employees and experts, particularly those who will be located at the BIS innovation hub in the UK. The immunities will include: exemptions from national taxation; immunity from inspection or seizure of official baggage; and inviolability of official papers and documents. BIS employees and their households will also be exempt from immigration control. First, does the Minister agree that these privileges are almost the same as given to diplomats? Secondly, does he agree that these BIS employees and their families will spend considerable sums of money to buy their daily needs from local shops and, possibly, employ local staff for their offices and homes?

My Lords, I welcome this statutory instrument and thank the Minister for introducing it. I realise that this is an administrative matter, so that this hub can be set up here with the relevant immunities and privileges required, although I note some of the concerns that other noble Lords have expressed. I am sure that the noble Lord, Lord Kirkhope, is right: if we can offer all these advantages then we should surely be offering due regard to the EU ambassador. I look forward to the Minister’s update on that.

Like other noble Lords, I welcome the fact that the Bank of England has made this successful bid to host the Bank for International Settlements innovation hub in the United Kingdom. As the Minister said, the BIS is an international financial institution, headquartered in Basel, assisting central banks in the interests of global monetary and financial stability. As the Explanatory Notes say, the main activities are supporting discussion between central banks, producing research, and assisting central banks’ financial operations. I noted that its membership currently includes 62 central banks and monetary authorities from both advanced and developing economies. That is not every central bank of course, as the noble Lord, Lord Kirkhope, noted. I would be very interested in seeing which countries are involved, and which are not. When DfID existed, did we encourage central banks in countries that we supported, for example in Africa, to join this? I would certainly hope so.

We certainly know how important financial co-ordination is, not least from the global effect of the 2008 financial crisis. We face new challenges now, with the economic effects worldwide of coronavirus and the speeding up of the adoption of new technology. New technology has often leap-frogged in Africa, not least with mobile money, from M-Pesa onwards, and it is vital that there are global discussions which help to underpin financial stability.

We now have cryptocurrencies moving fast, particularly in developing countries, and we know the risk here and how they may conceal corrupt payments. The noble Baroness, Lady Wheatcroft, is surely right that they need to be regulated. There are many new challenges.

I note that the hub states that it aims, among other things, to act as a focal point for sharing best practices with regulators in developing countries. Can the Minister say how that information will be disseminated? It was an irony of the Brexit discussions, as many have noted, that fishing played a large part but our financial sector so small a part in the discussions. Given that the Minister has just stated that the fintech sector alone is worth nearly £11 billion a year to the UK economy and that the UK is indeed a world leader in this area, that was astonishing. The DIT has just held a UK-Africa fintech summit, at which the noble Lord, Lord Grimstone, noted that

“the financial services sector is a key primary driver of a nation’s economy. There is a strong correlation between economic development and the depth of their financial and professional services sector.”

Indeed so.

I note that there are two BIS representative offices, one in Hong Kong and one in Mexico. Can the Minister tell us whether the one in Hong Kong looks secure in current circumstances? I also note that, between 2020 and 2022, it is planned that centres will open not only in London but in Toronto, Frankfurt, Paris and Stockholm, and that they will form a strategic partnership with the Federal Reserve in New York. What are the implications for London of those other European centres? How will that work?

The Governor of the Bank of England, Andrew Bailey, said in relation to this hub:

“Now more than ever it is important the central banking community does all it can to build a more effective, resilient and inclusive financial system, and technology is an important part of that effort.”

He argues that the hub will provide

“an important venue to ensure the UK’s deep expertise in innovation can contribute to solving global financial issues.”

We all certainly hope that this expertise will continue to develop for the economic future of the United Kingdom.

I come to the immigration provisions in perhaps an opposite way from the noble Baroness, Lady Wheatcroft. Can the Minister assure me that there will not be restrictions on who might be recruited to work at this hub, and that it will not be affected by the new Immigration Rules, which will have such a damaging effect on being able to attract technical support from EU citizens whose salaries may not be above the requisite level? I hope that the UK will become more responsive to the rest of the City of London and elsewhere in our economy in our being able to attract people in whose salaries may be below the levels we are stipulating.

I certainly hope that this new hub prospers and I look forward to the Minister’s response.

My Lords, I, too, welcome this statutory instrument. The Bank of England said in its press release at the time:

“The decision to establish this centre is a reflection on the UK’s position as a world leader in innovation and technology”.

However, as the noble Baroness, Lady Wheatcroft, said, the BIS is also responsible for promoting stability, so I hope that the Minister will be able to respond to her question about the new bitcoin currencies that are developing and establishing themselves. Certainly the press reports on Elon Musk are pretty worrying.

Like the noble Lord, Lord Kirkhope, and the noble Baroness, Lady Northover, I would be interested to hear about this issue. They referred to the fact that 62 countries were part of the system of BIS, which represents 95% of world GDP. What are we doing to ensure that the membership is expanded and built on?

I have some specific questions in relation to the host country agreement. First, as the noble Lord, Lord Kirkhope, said, the specific powers to create these regulations are contained in Section 12 of the International Development Act 2002, and it is the first time that these powers have been used. Can the Minister advise whether any further regulations are required, for example in the exercise of powers under the International Organisations Act 1968?

Noble Lords have referred to the exemptions, which appear to be in line with international precedent. Nevertheless, there are security implications there. Can the Minister assure us that the Government will work closely with those managing the new hub to ensure that no individuals seek to abuse those exemptions?

The other area that is specifically excluded and where no immunity is conferred relates to road traffic accidents. Can the Minister confirm whether such an exemption has been included in previous immunity agreements or this is a new policy?

Turning again to the host country’s agreement and comparable agreements in the BIS, I wondered whether there were any differences that the Minister would draw to noble Lords’ attention. For example, I note that the 1998 agreement with the Hong Kong Administration does not exempt the hub office from all taxes, which are exempt in the UK agreement. Is this a relevant difference, or is it something that we need to understand better?

The noble Lord, Lord Kirkhope, mentioned that the Explanatory Notes refer to the fact that the new hub is the result of a bid by the Bank of England, and other noble Lords referred to this bidding process. Obviously, that has policy implications. Is there any intention, or has there been an opportunity, to publish the details of the bid so we have a bit of transparency and accountability—particularly if this is an issue where we will be seeking to attract other similar institutions to London?

At the end of the day, we must welcome the fact that we have this hub and that it will promote and include innovation in this field. However, one of the broader issues regards how we finance our contributions. Are there any additional issues with the source of the finance and whether it comes out of our ODA budget? Of course, one thing that all noble Lords are completely focused on at the moment is the size of that cake and how it is being reduced by the decline in the size of the economy, but not least also the policy decision to move from 0.7% to 0.8%. I hope that the Minister can assure us that the Government’s priorities will not be affected by this decision.

My Lords, first, let me say that I am extremely grateful to noble Lords for their contributions and support in welcoming this new initiative and the success that we have achieved with the Bank of England’s successful bid to host the innovation hub of the new Bank for International Settlements in London.

A number of noble Lords, including the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, referred to the bidding process and greater levels of transparency. Obviously, when the Bank of England bids in any confidential process, certain things are very much part and parcel of the bidding process as it is made.

I am sure that noble Lords recognise—indeed, several of them referred to this—that one of the main bases on which this bid was successful was the recognition of the City of London as the leading global international financial capital. Although it was some time ago now, I declare a mild interest related to this as someone who worked in the City for more than 20 years. This decision further recognises the importance of infrastructure and innovation in the context of the City of London. Notwithstanding our departure from the European Union, it is a real boon for the UK economy and our place as a global Britain around the world.

I will now pick up on some of the specific questions. Some technical questions were raised by the noble Lord, Lord Collins, with reference to specific Acts. On the specifics of how this order relates to other Acts, I will write to him to ensure that we are correct in the detail.

Picking up on the point about immunities and privileges made by the noble Baroness, Lady Whitaker, my noble friend Lord Kirkhope, and the noble Lord, Lord Bhatia, it is standard practice for international organisations, including international financial institutions and their staff, to be accorded immunities and privileges by host Governments. The noble Lord, Lord Collins, also raised the issue of the Government’s approach to this. The immunities and privileges granted to international organisations, such as international financial institutions, should be granted primarily on the basis of strict functional need. The host agreement grants legal capacity to the BIS so that it can enter contracts and have a UK bank account, for example. As I stated in my opening remarks, immunity from legal processes is granted because it is necessary to ensure that the BIS and other persons connected to the bank, such as staff and secondees, have the independence necessary for them to carry out their functions. However, the noble Baroness, Lady Whitaker, among others, raised the issue of abuse of this. I assure her that where this is suspected, the privileges and immunities will be revisited and the institution will be asked to waive these specifically.

My noble friend Lady Wheatcroft speaks with great insight and experience of the City of London. She talked about how staffing will work in this new innovation hub. The converse argument was presented by the noble Baroness, Lady Northover. We want to allow the best and the brightest to be recruited. In regard to issues around immigration, yes, we continue, as anyone who has worked in the private sector or elsewhere will recognise, to want to see the best of homegrown talent come forward, but equally to allow for an international hub to benefit from international talent. The BIS is set up, if I may put it this way, to attract the best and the brightest.

The issue of cryptocurrency, interestingly, was raised, and rightly so. There has been a lot of topical discussion on this. The noble Baroness, Lady Northover, the noble Lord, Lord Collins, and my noble friend Lady Wheatcroft talked specifically about regulation. Regulation of financial services over time has demonstrated that, at times, voluntary measures are introduced, but there is a requirement to provide for the security and safety of all investments that might be made. With the growth of bitcoin, I totally recognise the lack of a regulatory environment in which the bitcoin sector operates and the vulnerabilities of people who invest in it without the security of other investments. I assure my noble friend that this will form part of our G7 workstreams. Among others, the FCA has taken steps towards looking at regulation in this respect.

My noble friend Lord Kirkhope also talked specifically about the IMO and other international organisations. Under this order, we have reflected the status of the bank as an international financial institution. My noble friend and others, including the noble Lord, Lord Collins, referred to the powers that we were granted under the International Organisations Act 1968 and asked why we are not using them. As the BIS is considered an international financial institution, the International Development Act 2002 was deemed the most appropriate route to confer immunities and privileges, rather than the International Organisations Act 1968. For example, the Bank for International Settlements does not fall directly within the scope of international organisations covered by Section 1 of the IOA 1968, which is limited to organisations of which the UK or HMG are members. The BIS is a membership organisation of central banks, not Governments themselves. It is the Bank of England, not the UK, that is a member of the BIS.

My noble friend Lord Kirkhope also talked about extending the scope beyond the current membership of the BIS. Of course, that is primarily a matter for the BIS. As the noble Baroness, Lady Northover, also recognised, there are now 63 central banks and monetary authorities which are currently members of the BIS, and which can vote and are represented at meetings. I will share some facts and figures with noble Lords. Of the current membership by income status, 70% are from advanced economies and 30% from developing economies. To give noble Lords a sense of geographical breakdown, 54% are from Europe, 15% from Asia, 10% from Latin America, 8% from MENA and 3% from Africa. Membership is not required for central banks to benefit directly from the BIS’s research. For example, 300 organisations from 160 countries already benefit from access to its Financial Stability Institute’s web-based information tool. However, I fully acknowledge what noble Lords have raised, including my noble friend Lord Kirkhope. As we strengthen the role of the City of London, we will continue the UK’s global role in the world and particularly in financial services, focusing on the importance of widening the scope so that all parts of the globe, including, most importantly, the developing parts, benefit from fintech and the innovations provided by this new hub.

The noble Baroness, Lady Northover, the noble Lord, Lord Collins, and my noble friend Lord Kirkhope—I thank him for his description of my charm and powers of persuasion—referred to the issue of the EU delegation to the UK. The update on this is that we continue to engage with the European Union on the arrangements for the EU delegation. These are ongoing discussions, and I do not want to pre-empt any particular outcomes. However, I have noted noble Lords’ concern and reflections on this important issue.

The noble Lord, Lord Bhatia, also talked about the importance of privileges and immunities. I believe that I covered that in part through the assurances that I provided.

The noble Baroness, Lady Northover, rightly raised concerns over the situation in Hong Kong and how that will be reflected in the work of the office there. As she will appreciate, at the moment the situation is very fluid, and of course we are concerned by developments more broadly in Hong Kong, as the noble Baroness will be fully aware. She also raised the importance of co-ordination across key centres and offices of the institution and named a number of cities in this respect. Again, that underlines the importance of the financial services sector, its connectivity and how innovation and technology will further enhance the manner in which international financial centres further co-ordinate these activities. As all noble Lords will know, the BIS is often referred to as the bankers’ bank—that is, it is the bank which provides settlements for central banks—so its role is even more crucial.

The noble Lord, Lord Collins, also raised a technical point about traffic accidents. As far as I am aware—if this is not correct, I will amend the record—it is very much standard to grant that exemption from privileges and immunities, in the manner in which privileges and immunities work for international agreements.

I believe that I have covered the majority of the questions which were raised specifically on this issue. I conclude my remarks by saying once again that, if there are any additional points that I have not covered, I will write to noble Lords in the appropriate way and place a copy of the letter in the House of Lords Library.

Finally, this is a recognition of the City of London’s continued strength. I believe the innovation hub will lend itself to further innovation and technology advancements within the City of London, not just to retain the strength of the City as a global financial centre but to continue to retain its position as the leading financial centre in the world.

Motion agreed.

Sitting suspended.

Arrangement of Business


My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.

Electronic Commerce Directive (Education, Adoption and Children) (Amendment etc.) Regulations 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Electronic Commerce Directive (Education, Adoption and Children) (Amendment etc.) Regulations 2021.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee

My Lords, these regulations were laid before Parliament on 18 January. I thank the Secondary Legislation Scrutiny Committee for considering them. I also thank the European Statutory Instruments Committee, which considered the regulations in 2019.

The regulations seek to remove statutory measures that implemented Article 3 of the e-commerce directive, better known as the country of origin principle, from two pieces of legislation: the Education Act 2002 and the Electronic Commerce Directive (Adoption and Children Act 2002) Regulations 2005. This is a necessary step now that we have left the European Union and the transition period has ended.

The e-commerce directive is a piece of EU legislation that aims to facilitate digital trade in the EU’s internal market. It was introduced by the EU in 2000 and seeks to contribute to the proper functioning of the internal market by ensuring the free movement of information society services, which, for ease, I will refer to as online service providers.

Article 3 of that directive contains the country of origin principle, which is designed to facilitate digital trade among businesses in the European Economic Area. It applies to online service providers based in any state operating across the European Economic Area and means that online service providers have to follow certain rules only in the state in which they are established, rather than in each state where their service is received.

This principle applied to a variety of parts of UK legislation. To give one example, in October, noble Lords will have heard my noble friend Lady Barran speak in this House to regulations that removed the effect of the directive from the Communications Act 2003. However, the regulations we are debating today concern two main aspects of policy: teacher misconduct and adoption.

On teacher misconduct, Section 141F of the Education Act 2002 sets out reporting restrictions that aim to protect the identification of a teacher in England and Wales facing an allegation of an offence made by or on behalf of a pupil until the point at which legal proceedings for the offence have begun or the Secretary of State for Education publishes information following an investigation or decision relating to the allegation. Section 141G makes it an offence to publish information in breach of Section 141F. Schedule 11B to the Education Act 2002 applies the country of origin principle to the offence created by Section 141G.

On adoption, the Electronic Commerce Directive (Adoption and Children Act 2002) Regulations 2005 give effect to the country of origin principle in two offences in the Adoption and Children Act 2002. First, Section 92, dealing with restrictions on arranging adoptions, prevents anyone who is not an adoption agency, or acting pursuant to a court order, taking steps to arrange the adoption of a child. Secondly, Sections 123 and 124, dealing with the restriction on advertising adoptions, prohibit advertisements relating to the adoption of a child unless they are undertaken by an adoption agency.

Following our withdrawal from the EU, the country of origin principle no longer applies to the UK. It is for this reason that these regulations have been laid: to amend the 2002 Act and the 2005 regulations to remove inappropriate provisions and ensure that our legislation continues to operate effectively.

These regulations do not create new policy. The offences I have referred to, which protect children and teachers, remain in our legislation unchanged. These regulations are a technical measure to fix all failures of retained EU law arising from the withdrawal of the United Kingdom from the EU. They will ensure that all online service providers who commit an offence created by the Education Act 2002 and the Adoption and Children Act 2002 in the UK will be liable for prosecution in the UK.

Domestic online service providers that publish prohibited information in a European Economic Area state will no longer be automatically treated as having committed a relevant publishing offence in England and Wales for an offence under the 2002 Act, or anywhere in the UK for offences under the 2005 regulations, but will be subject to prosecution in the state in which the offence is committed. It will also mean that online service providers established in a European Economic Area state will not automatically be exempt from prosecution in the UK. I beg to move.

My Lords, I very much doubt that this is a unique situation with respect to the consideration of regulations. But, in more than 23 years in your Lordships’ House, this is the first time I have participated in a debate involving just two speakers. Indeed, is it actually possible to have a debate with only two speakers? Perhaps that is a subject that the Minister and I should debate. The lack of interest from other noble Lords today is perhaps down to the fact that these regulations are non-controversial. I thank the Minister for introducing them.

The regulations require affirmative approval, and, on behalf of the Opposition, I am content to signify our support. We welcome the fact that they are subject to the affirmative procedure, because that was not the case when an early version of these draft regulations was brought forward in 2019. In its meeting two weeks ago, the Secondary Legislation Scrutiny Committee of your Lordships’ House considered these instruments and concluded that there was no requirement for them to be reported to both Houses. However, in 2019 that was not the case; at that time the draft regulations were considered with a view to the possibility of the UK departing the European Union without a deal being signed. Thankfully, that has been avoided. However, two years ago the Secondary Legislation Scrutiny Committee said in its report that the draft regulations should be upgraded to the affirmative procedure. It is therefore appropriate that the affirmative procedure applies to the regulations we are considering today.

The Minister has set out the intricacies of the draft regulations in more detail than I am able to. As she said, the provisions in question engage the country of origin principle—a reciprocal arrangement between EU member states which, as of 31 December, no longer applies to the UK. These regulations disapply that principle as it relates to the subject matter of Schedule 11B to the 2002 Act, which applies only to England and Wales, and the 2005 regulations, which apply across the whole of the UK. The amendment of these provisions is necessary to reflect the ending of this reciprocity and to ensure that domestic legislation continues to operate effectively in the post-EU environment. The relevant provision in the 2002 Act relates to the offence which is committed where a person breaches a reporting restriction set out in the Act in respect of a teacher who has been accused of an offence involving a pupil at their school. The relevant provisions in the 2005 regulations concern a breach of the Adoption and Children Act 2002, which imposes certain restrictions on arranging adoptions and the publishing or distributing of adoption-related advertisements.

There is not much more I wish to say. We believe that the amendments contained in these draft regulations are logical and appropriate. It is right and proper that only the state has a legitimate authority to arrange and oversee adoptions. We welcome this being reiterated and that both the institution of adoption and the rights of teachers will continue to enjoy the full protection of the law.

I thank the noble Lord, Lord Watson, for his contribution on these regulations. I hope that public health will allow us to meet face-to-face at some point in the future and perhaps debate the challenge to consider whether two people can have a debate.

I hope I have reassured the noble Lord that the amendments made by these regulations do not dilute or diminish in any way the offences I have described that are set out in the Education Act 2002 and the Electronic Commerce Directive (Adoption and Children Act 2002) Regulations 2005. Neither do these regulations impact in any way on the policy behind those regulations. We most definitely want to continue to protect the identity of teachers who are accused by a pupil of an offence until the point at which relevant proceedings have begun. We also want to continue to safeguard children by ensuring that arranging or advertising adoption is something that legally can be undertaken only by adoption agencies.

As I have outlined, these regulations are purely a technical measure to fix what would have become a failure of retained EU law. Our intervention will empower UK regulators to enforce UK laws where the offence is committed in the UK and irrespective of the country in the European Economic Area where the online service provider is based. I commend these regulations to the Committee.

Motion agreed.

That completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.

Committee adjourned at 5.55 pm.