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Lords Chamber

Volume 811: debated on Wednesday 24 March 2021

House of Lords

Wednesday 24 March 2021

The House met in a hybrid proceeding.

Prayers—read by the Lord Bishop of Newcastle.

Arrangement of Business

Announcement

My Lords, the hybrid sitting of the House will now begin. Some Members are here in the Chamber, others are participating remotely, but all Members will be treated equally. I ask all Members to respect social distancing. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.

Death of a Member: Lord Greaves

Announcement

My Lords, I deeply regret to inform the House of the death of the noble Lord, Lord Greaves, on 23 March. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.

Arrangement of Business

Announcement

My Lords, Oral Questions will now commence. Please can those asking supplementary questions keep them no longer than 30 seconds and confined to two points? I ask that Ministers’ answers are also brief.

Food Waste

Question

Asked by

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and in so doing declare an interest: I have been involved in the food industry all of my walking life.

My Lords, reducing food waste helps mitigate climate change, protect biodiversity, improve other environmental outcomes and use our resources more efficiently. This Government are committed to meeting the UN’s sustainable development goal 12.3 target to halve global food waste by 2030. Actions that we have taken include appointing a food waste champion, supporting householders to waste less with campaigns such as the Food Waste Action Week, grant-funding the redistribution sector and working with industry on sustainable supply chains.

I thank the noble Lord for that response. I am sure one of the main problems is that the sell-by dates on products are far too cautious. I remember once eating a biscuit that was 20 years old. It was perfectly edible.

My Lords, I have considerable sympathy with that point. I do not think that I have eaten a biscuit quite that old, but I would not be afraid of doing so. The UK is objectively an international leader in tackling food waste. We are fully committed to the UN sustainable development goal target, which, as I said, is to halve global food waste at consumer and retail levels by 2030. We will use all available tools and I take the noble Lord’s comments on board.

I am pleased to hear the Minister endorse the efforts being made globally and internationally by the Government, but can I take him back to World War II, when there was a huge effort to take the campaign into every household? It was done by advertising, by broadcasting and by recruiting restaurants, cafés and commentators to reach individuals. Please can the Government address their policy in that direction?

My Lords, that is very much the direction in which we are focusing our efforts. For example, Food Waste Action Week in March is the first of what we hope will be an annual event focused on citizen food waste and is all about increasing awareness. We are also urging businesses to help consumers directly. The way food products are sold, packaged, labelled, priced et cetera can make a big difference to waste levels at home. We are funding both of WRAP’s campaigns: Love Food Hate Waste and Wasting Food: It’s Out of Date. These schemes are about helping and motivating people to cut waste. There is masses of evidence to suggest that that is working.

My Lords, with queues at food banks and children suffering from food poverty, food waste is an outrage. In some cases, supermarkets are refusing to take produce grown under contract, resulting in it being ploughed back into the ground. These crops could be used to make meals to help feed the homeless. What is the Minister doing to ensure that no nutritious food is destroyed in this way?

My Lords, there are so many benefits to cutting food waste and the noble Baroness has mentioned just one. The total amount of surplus food redistributed in the UK in 2018 alone—as a consequence, partly, of UK Government efforts—was 56,000 tonnes. That is worth £166 million and is food that would have been thrown away but was not. UK food redistribution almost doubled between 2015 and 2018 for charitable and commercial sectors. Surplus food redistributed via charities made up almost 60% of that total, up from 40% in 2015. We are investing in numerous organisations that are on the front line of ensuring that food, instead of being wasted, is redistributed to those people who need it most.

My Lords, the reduction in food wasted by households during the pandemic, seemingly as a result of careful shopping, budgeting and home cooking, is to be warmly welcomed. Can my noble friend say what action is to be taken to ensure that similar reductions happen in the hospitality sector as it begins to open up?

The noble Baroness makes an important point. We are supporting WRAP, which is our delivery partner, to help the hospitality sector to waste less food. WRAP has developed a new programme, called Guardians of Grub, to help the sector put food waste reduction, with all the associated cost savings, at the heart of its operations. As I mentioned, we are also supporting the redistribution sector to get more surplus food to those in need. In 2018, the hospitality industry provided more than 1,000 tonnes of surplus food—around 2% of its total—and since then we have invested significantly in redistribution, so we expect those positive trends to continue.

My Lords, given that the global food system accounts for as much as 30% of greenhouse gas emissions, does the Minister agree that food, farming, dietary change and tackling food waste should form part of the Government’s commitments for COP 26? Does he also consider that it would be appropriate for England to join Scotland in signing the Glasgow food and climate declaration?

My Lords, it is remarkable that over the last 40 years food production has trebled, but that has come at a huge cost, in soil erosion, in the unsustainable use and pollution of water and in deforestation. Agriculture is responsible for about 80% of the world’s deforestation and deforestation is now the second biggest source of emissions. Meanwhile, efforts to produce cheaper meat have led to industrial-scale use of antibiotics, which in turn exacerbates issues around antimicrobial resistance. This absolutely is a central issue and much of the work that we are doing in the run-up to COP 26 in November is centred around the need to shift and change fundamentally the way in which we use land.

Food waste disposed of in plastic packaging either goes to landfill or contaminates organic waste streams. Does the Minister agree that this could be partially solved by incentivising food producers and retailers to use compostable packaging, by which I mean the type that degrades naturally, rather than as a result of chemical processes? What action are the Government taking to support that?

The Government have a keen interest in the issue of biodegradable and compostable packaging. The sad truth is that much of the packaging that is advertised as such really is not. We are looking at that in great detail, with a view potentially to creating a standard to avoid any confusion. I hope that we will resolve those issues soon and will be able to establish a clear policy that is both understandable and effective.

Does the Minister agree that supermarket promotions such as “three for two” and “buy one, get one free” promote overprovisioning and result in waste? What action is being taken to make supermarkets address the causes of food waste?

Much of the focus of the work that the Government are doing is on trying to get the food sector, at all levels, to reduce the amount of food waste generated. Clearly, that involves supermarkets packaging, advertising and presenting their products in a way that helps consumers to make the right choices, with a view to reducing their environmental footprint and food waste.

My Lords, is the Minister aware that under the Environment (Wales) Act 2016, which deals with the sustainable management of natural resources, the Welsh Government might be empowered to introduce a food waste charge on all food that is not sold or disposed of for human or animal consumption by its end date? Will he encourage the Welsh Government to act in that regard and will he consider whether such steps might be equally applicable in England?

On food waste, with our counterparts in the DAs, we learn from each other. Much of our work with WRAP, including citizen campaigns, is supported by Scotland, Wales and Northern Ireland. In the resources and waste strategy, we have committed to seek powers in our Environment Bill to impose responsibilities on producers to reduce their waste, should progress from all the current measures be insufficient to get us towards that sustainable development goal. We continue to look closely at the issue.

My Lords, does the Minister agree that apps and charities are more effective in the redistribution of surplus food than any government policy, however well intentioned, can be? May I take him a little bit upstream and talk about the production phase? For years, British agriculture was locked into a system where there was necessary overproduction and where intensive farming, the use of chemical fertilisers and the felling of hedgerows were encouraged by an output-based system. Will my noble friend confirm that we will now have a farming policy in this country tailored to suit the needs of the countryside, which is the sublime inheritance of all of us in these islands?

I agree with the noble Lord about the value, the benefit and the effectiveness of the private sector in dealing with these issues, particularly through new technology and apps. I can also absolutely confirm that one of the biggest opportunities that we have in relation to farming, land use, conservation and the environment is the ability now, post Brexit, to ditch the old common agricultural policy and replace it with a new system that, instead of incentivising land use destruction, which CAP undoubtedly did throughout the continent, is moving to make all payments conditional on delivery of a public good. Of course, one public good, among many, is environmental stewardship.

University of Bristol: Jewish Students

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the statements by Professor David Miller about Jewish students; and what discussions they have had with (1) the University of Bristol, and (2) the police, about the steps being taken to ensure the safety of such students.

Universities are independent and autonomous organisations. Accordingly, the Government have not intervened directly in this case, but we consider that the University of Bristol could do more to make its condemnation of Professor Miller’s conduct clear to current and future students. Students also can and should inform the police if they believe that the law has been broken. Professor Miller has expressed some ill-founded and reprehensible views and the Government wholeheartedly reject them.

Academics do have freedom of speech, including to criticise Israel, but Professor Miller does not have the right to attack Jewish students as being part of an Israel lobby group that makes Arab and Muslim students unsafe. Bristol should not be employing someone to teach students wild conspiracy theories about Jewish people. His behaviour has resulted in Jewish students being subjected to weeks of harassment and abuse. Bristol must support its students and take this much more seriously.

The noble Lord gets to the nub of the issue with his questions. Academics of course have the right to espouse views that many might find offensive, perhaps even idiotic, and universities should be places where such views can be rigorously and vigorously debated. What makes this case concerning is Professor Miller’s comments about his own students, suggesting that their disagreement with his views is because they are political pawns of a foreign Government or part of a Zionist enemy, which has no place in any society. The International Holocaust Remembrance Alliance’s definition of anti-Semitism draws the important distinction between legitimate criticism of the Government of Israel and their policies and holding Jews collectively responsible for them. We are glad that the University of Bristol has adopted that definition and we hope that it will consider it carefully.

My Lords, I draw attention to my interests in the register, including the fact that I am on the advisory council of the Hillel foundation, which supports Jewish students at universities. Does the Minister agree that the failure of the university’s leadership to act to protect its own students, for whom it has a duty of care, breaches three out of the four regulatory objectives of the Office for Students? Can he provide reassurance that that will be taken into consideration in any evaluation by the Office for Students, which would also include addressing and evaluating the performance of the university leadership and confidence in its ability to continue to lead?

The noble Lord is right to say that providers have a duty of care to students, which the Government expect them to take very seriously. All registered higher education providers, including the University of Bristol, are subject to ongoing conditions of registration with the Office for Students, which is responsible for ensuring compliance with them. In addition, students can notify the Office for Students of any issues that they think may be of regulatory interest to it, and the OfS has provided a guide for students to support them in that process.

In a Written Answer to my noble friend Lord Austin last week, my noble friend the Minister said:

“All higher education providers should discharge their responsibilities fully and have robust policies and procedures in place to comply with the law”.

So will he or the Universities Minister now write to universities who employ the academics who signed a letter of support for Professor Miller of Bristol University, asking them what action they are taking in respect of those academics, who appear to be supporting Professor Miller’s anti-Semitism, as defined by the aforementioned IHRA?

Universities and other providers are independent institutions, responsible for their own staffing decisions and for meeting their duties under the law, regarding both freedom of expression and equality. However, the Government have been clear that we expect universities to be at the forefront of tackling anti-Semitism and ensuring that they provide a welcoming experience for all students. That is why my right honourable friend the Education Secretary wrote to providers, encouraging them to adopt the IHRA definition, as a result of which, I am pleased to say, more than 50 additional institutions have done so.

My Lords, on that point of a welcoming environment for Jewish students, the University of Bristol, in a statement on its investigation, said that its,

“clear and consistently held position is that bullying, harassment, and discrimination are never acceptable. We remain committed to providing a positive experience for all our students and staff, including by providing a welcoming environment for Jewish students”.

That is not happening at that university and, sadly, at all too many other universities. In a debate in January initiated by the noble Baroness, Lady Deech, who follows me today, she said that some universities were becoming no-go areas for Jewish students. This is surely intolerable. There is a systemic problem here and I should like to hear the Minister say how he is going to tackle that on a—

That is an extremely long question. Could I please ask noble Lords to keep their questions short, as a lot of people want to get in and express their views?

My Lords, the noble Baroness refers to the important, if dispiriting, debate held in Grand Committee in January this year, looking at instances of anti-Semitism in universities. The Government are very mindful of that, which is why my right honourable friend the Education Secretary has, in his most recent strategic guidance letter, asked the Office for Students to consider a scoping exercise to identify providers that are reluctant to adopt the IHRA definition.

Sadly, the situation at Bristol has been ongoing for over two years since students first complained and the university has stonewalled until this week. Jewish students have been verbally and physically abused at that university previously. The failure to act shows that anti-Semitism is not taken seriously. Had a professor hurled similar abuse and conspiracy theories at black students, he would have been off campus by the evening. Will the Minister ensure that the relevant student bodies take anti-Semitism as seriously as they do other forms of racism—namely the OfS, the National Union of Students and Universities UK?

My Lords, the Government most certainly take anti-Semitism seriously and my right honourable friend the Education Secretary’s letter also asked the Office for Students to consider introducing mandatory reporting by providers of anti-Semitic incident numbers, with the aim of ensuring a robust evidence base to make sure that appropriate action is being taken.

My Lords, I draw attention to my entry in the register of interests. Does my noble friend agree that Bristol University adopting the IHRA working definition on anti-Semitism is only the first step? A work programme would reasonably seek to establish a safe space for Jewish students so that they can learn in a free and open environment. Bristol University has failed to offer safety, reassurance or even the slightest suggestion of competence. Does my noble friend agree that the university must condemn Professor Miller’s statement that Jewish students were directed by the Israeli Government and take the necessary action to restore the public’s lost confidence in Bristol University?

I first pay tribute to my noble friend’s work on the IHRA definition and getting a number of bodies, including Her Majesty’s Government, to sign up to it. He is right that adoption of that working definition is only a first step. While the Government think it is vital, it is not enough on its own. That is why we continue to work with the sector to make sure that it is doing everything it can to stamp out anti-Semitism.

I draw attention to my registered interests and very much welcome the Minister’s comments. Has he noted that Professor Miller has suggested that by joining a university Jewish society, students are thereby associating themselves with racism and Islamophobia? Will the Minister note that many students join Jewish societies because they wish to attend religious services or go to parties? They may simply wish to have a nourishing and regular bowl of chicken soup.

I completely agree with the noble Lord. That suggestion is at the heart of this issue because it implies that Professor Miller can understand the motivations or the political views of Jewish students at the University of Bristol who join a Jewish society. We think that is wrong and very ill-founded, and that is what causes us such concern in this case.

My Lords, this is an appalling case, but does the Minister share my concern that the Government’s proposals for free speech legislation run the risk of protecting statements that are anti-Semitic, offensive and dangerous? Will he clarify the role that the Government expect the free-speech champion to play in cases such as this? What protection and priority will be given to student welfare under the proposals to ensure that Jewish students do feel safe from anti-Semitic abuse?

My Lords, people go to university to be provoked and challenged and to come into contact with ideas and opinions that may be different from those that they have encountered before. They might find those ideas fatuous or even offensive, but that is part and parcel of the academic experience. Our proposals for a free-speech champion are to ensure that free speech is being protected on campus, that that essential part of university experience is maintained and that universities are balancing their legal obligations to safeguard freedom of expression while also tackling any abuse, harassment or intimidation of students, which is contrary to the law.

My Lords, I regret that the time allowed for this Question has elapsed. We now come to the third Oral Question, from the noble Lord, Lord Dubs.

Nazanin Zaghari-Ratcliffe

Question

Asked by

To ask Her Majesty’s Government what assistance they are providing to Nazanin Zaghari-Ratcliffe in preparation for the end of her sentence in March.

My Lords, it is unacceptable and unjustifiable that Iran has chosen to continue with this second and wholly arbitrary case against Nazanin. Iran has put her through an inhumane ordeal. We continue to call on Iran in the strongest possible terms to allow her to return to the UK to be reunited with her family. The Prime Minister has raised her situation with President Rouhani, most recently on 10 March, and the Foreign Secretary continues to engage with Foreign Minister Zarif.

Why did representatives from the embassy not visit Nazanin while she was staying with her parents in Tehran, even to the point of sending a car without a member of staff from the embassy to deliver a gift from her daughter in London? Also, is it not time that we resolved the question of the £400 million debt to Iran, which is not in dispute? Is it not time that we paid it off, at least to clear the air in that respect?

My Lords, we have made many efforts to attend court hearings to witness at first hand the discussions that have taken place which have had a direct impact on this appalling case, but it is not for the UK to force itself into such proceedings. Unfortunately, that cannot happen without the permission of the authorities. However, we will continue to make the case.

My Lords, I draw the attention of the House to my entry in the Register of Lords’ Interests. Does the Minister agree that even if Iran has a justified sense of grievance over the unpaid tank money, the £400 million referred to by the noble Lord, Lord Dubs, it is beyond the pale for a civilised country to try to make a link between the fate of Nazanin Zaghari-Ratcliffe and a financial argument? Does he remember that when President Rouhani took office, he said in his first speech that he wanted to demonstrate to the world the rational face of Iran and the compassionate face of Islam? Is it not now time, at Nowruz, the beginning of Iranian new year, for those qualities to be made a reality?

My noble friend makes an extremely powerful point. Compassion is certainly not a word that can be used to describe the manner in which this British subject has been treated. The UK does not and never will, under any circumstances, accept its dual nationals being used as diplomatic leverage. The payment of the IMS debt is a long-standing case relating to historical debt owed to pre-revolution Iran, as the noble Lord will know. We continue to explore the options to resolve this case. I cannot go into detail here, but would say simply that the two issues cannot be merged into one.

My Lords, I must press the Minister on the final point made so eloquently by the noble Lord, Lord Dubs. It seems to many people in this country that we should simply pay this debt and get it out of the way, given that senior members of the Government have admitted that we owe it. Also, have the Government made an assessment of other British citizens who might, either now or in the future, be in danger of being held as, quite frankly, hostages?

My Lords, it is unhelpful to connect wider bilateral issues with those being arbitrarily detained in Iran. It remains in Iran’s gift to do the right thing and allow British dual nationals to come home and be reunited with their families. We have been consistently clear that we continue to explore all the options to resolve what is a 40 year-old case. The Government are clear that we do not accept British dual nationals being used as diplomatic leverage and we continue to call on the Iranian Government to release all the British dual nationals who have been arbitrarily detained.

My Lords, obviously there is huge public interest in Nazanin’s case, from the time when more than 3.5 million people signed a petition to free her. I would also mention the case of Anousheh Ashouri. Will the Government provide diplomatic protection for him in the way that they extended it to Nazanin last year, as well as providing them both with ongoing consular protection?

My Lords, I will have to take the case mentioned by the noble Baroness back to the FCDO and I will convey her message to colleagues in the ministerial team and officials.

My Lords, I would also like to flag the case not only of Nazanin, and ask why the Government have not fully used the diplomatic protection they have granted to her. It should be extended to another British dual national, Anousheh Ashouri, a retired British-Iranian engineer. He has been held for three and a half years after a grossly unfair trial. When the Minister writes to the other noble Baroness, could he write to me as well with regard to what is happening in this case?

I can certainly provide that assurance. However, perhaps I may make a broader point about diplomatic protection. Exercising diplomatic protection in the case of Ms Zaghari-Ratcliffe and others formally raises the issues to a state-to-state matter, and we will take further action where we judge that it will help to secure her full and permanent release. However, it is important that we act in a way that we judge, with all the information we have, most likely to be in the best interests of each of our detainees. We cannot, as noble Lords will understand, provide a running commentary on consular actions in this, or any, specific case.

My Lords, in light of the revelations about torture in Nazanin’s case, can the Government update us on how they have revised their protocols to protect from torture the other British citizens being held by Iran? Can he tell us what has changed?

We have said on many occasions that Iran continues to put Nazanin through a cruel and intolerable ordeal; there is no question about that. She must be allowed to return permanently to her family in the UK and we will continue to do all we can to achieve that. We shall apply as much pressure as we can in her case and in the case of other dual nationals being held arbitrarily by the Iranian regime.

My Lords, we all feel the most immense sympathy about the appalling case of Nazanin Zaghari-Ratcliffe, but it is entirely the fault of the Iranian Government. Almost 12 years ago, I visited Iran just before the Iranian Green Movement was crushed and I remember a Minister looking us in the eye and telling us that black was white—in other words, lying to us. They are not a Government who should be dealt with like a normal democratic Government. Does my noble friend share my bemusement that people seem to think that this is in some way the fault of the British Government? Rather, we should understand that our citizens must not be held hostage and used as leverage against us.

My noble friend makes a powerful point and, yes, I agree entirely that it remains completely in the gift of Iran to do the right thing by allowing all British dual nationals home to be reunited with their families. As I said in answer to a previous question, we do not believe that it is helpful or right to conflate different issues or to enable Iran to justify holding our citizens as collateral in the pursuit of other ancillary aims.

My Lords, striking the balance between state concerns is key to this. Our deep concerns have been voiced vehemently over time and will have been well understood by Tehran. However, would radio silence and quiet diplomacy where required be prudent now in order not to exacerbate a tense situation at this critical juncture? We should encourage no triumphalism from any quarter in the event of a favourable outcome.

My Lords, we have a clear interest and goal here. Our goal is to do everything we can to ensure that Nazanin is returned to this country to be able to live safely and happily with her family. We have raised the issue over and over again at the highest levels of government. As I said, on 10 March, the Prime Minister raised the issue with President Rouhani. There has been regular and ongoing personal engagement between the Foreign Secretary and his counterpart and we have been lobbying Iranian interlocutors at every opportunity. The UK Government, from the PM down, are dedicated to supporting Ms Zaghari-Ratcliffe and her family and we are determined to see them reunited. This is not about scoring points.

I would like to ask the Foreign Secretary what our policy is on state hostages. Will the Prime Minister raise the issue at the G7 meeting in Cornwall later this year?

I thank the noble Baroness for promoting me to Foreign Secretary. I would say that it is very likely that the Prime Minister will raise these issues, not only at the G20 meeting in Cornwall but at subsequent events. However, it is not for me to pre-empt the discussions that he will have.

Covid-19: Resuscitation Orders

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the report by the Care Quality Commission Protect, respect, connect—decisions about living and dying well during COVID-19, published on 18 March, on decisions about the use of ‘do not attempt cardiopulmonary resuscitation’ orders for (1) care home residents, and (2) people with learning disabilities, during the pandemic.

My Lords, the department warmly welcomes the publication of the CQC report on the use of DNACPR decisions taken during the Covid-19 pandemic. We are pleased to see examples of good practice detailed in the report across both health and social care, but this was not true everywhere, particularly for our most vulnerable people. That is why the department is committed to driving forward the delivery of the report’s recommendations and ultimately ensuring that everyone experiences the compassionate care that they deserve.

My Lords, this report from the Care Quality Commission highlights that

“unprecedented pressure on care providers”

and the rapidly developing guidance has led to blanket “do not attempt cardiopulmonary resuscitation” orders being imposed at a local level, particularly affecting care home residents and people with learning disabilities. Failure to consult people about their care betrays a lack of decency and compassion, but it is also a human rights violation. I am very grateful to the Minister for his reassurance about the recommendations, but may I press him, in particular, to assure the House that the recommendation of a ministerial oversight group will be implemented?

My Lords, I can absolutely reassure the right reverend Prelate that the Minister with responsibility for patient safety and mental health care will be heading the ministerial oversight group to drive forward progress. The group will bring together a range of stakeholders across both health and care to ensure that the recommendations are implemented.

My Lords, given the significantly higher number of excess deaths among people with learning disabilities last year, will the Minister commit to finding out what proportion of those deaths were associated with DNACPRs? Does he agree that the use of blanket DNACPRs for people with learning disabilities is an indication of the extent of the lack of confidence and competence among healthcare staff to accommodate their needs, and adds to the urgent need to introduce the Oliver McGowan mandatory training currently being piloted? A timetable for the widespread introduction of that training would be very welcome.

My Lords, we will address the audit points made by the noble Baroness. I completely endorse the importance of training; that is at the heart of the report and we acknowledge its importance. We are concerned about the number of people with learning disabilities who have died during the pandemic, and there will be a report on what the connections are.

My Lords, we know that it is unlawful for DNACPRs to be imposed, and I wonder why the research has not sought to identify why physicians and care workers continue to impose them in the way that they have. Does the Minister agree that the solution must lie in completely clear, unambiguous policy to advance care planning and DNACPR decisions, and a consistent use of accessible language, communication and guidance to enable clear understanding by commissioners, providers and the public?

I will gently push back against the noble Baroness: the policy is absolutely crystal clear. Blanket DNACPR is not the policy of this Government, as was repeated time and time again in our communications, which I would list if I had more time. Training is the issue: we need to give the front-line workforce the skills it needs to apply these very delicate but critical interactions. That is the recommendation of the report, and that is where we are focused on applying the lessons.

My Lords, does the Minister agree with Age UK that the report is the tip of the iceberg and requires the Government to bring forward proposals as part of a complete overhaul of the advance care planning system?

No, my Lords, I do not accept that the report is simply the tip of the iceberg; it is very thorough and goes into the matter extremely carefully. However, there are important lessons on training to be learned and they will be driven by the ministerial oversight group.

My Lords, the Care Quality Commission wrote up its findings at the time of the outbreak of Covid-19, which may have made them less reliable. A number of factors have served to raise exposure to decisions on whether or not to accept DNACPRs, and these were taken for groups rather than individually. Such groups included individuals suffering with dementia and learning disabilities who needed briefings that they could understand. The Care Quality Commission report is about how hospitals, care homes and doctors should support people to make decisions properly about how to restart. Are the Government satisfied that the decisions in this territory are now being taken properly?

My Lords, the report is crystal clear that we accept that more training is needed. Front-line care support workers need to be given more support in their interactions, and we will be putting that in place.

My Lords, I draw attention to my interests in the register, in particular the fact that I am a nurse involved with the Outcomes First Group, which supports people with learning disabilities. In order to increase the population’s awareness of care planning in relation to living and dying well, will the Government, in addition to training, consider incentivising healthcare workers to ensure that they have sufficient time to undertake proper assessment of individuals with cognitive impairment and learning difficulties as part of their routine care planning, which should be recorded and reviewed at least biannually?

The noble Baroness makes a very fair point; such care needs to be in the work plan particularly of those with learning difficulties, but of all those in care. We absolutely endorse the approach taken by the Resuscitation Council, which has extremely good guidance in this area.

My Lords, no one doubts the events described by the right reverend Prelate and noble Lords. By when can we be confident that the same could not happen again?

My Lords, we could not be moving more quickly. We got the report out before the end of the pandemic; we have acknowledged the issue and written numerous letters into the system, as I have mentioned; and we are putting in place the resources needed to support the necessary training and interactions. We are taking this extremely seriously and we are moving as quickly as we possibly can.

As the Minister has suggested, decisions on end-of-life care are best taken long before they are necessary, so could he encourage GPs to offer all patients the opportunity to make an advanced decision to refuse treatment, properly witnessed by two individuals, if it is to become effective?

The noble Baroness is entirely right, and a growing number of people do take that kind of pragmatic approach. But we have to be realistic: many people are not prepared to put those sorts of arrangements in place until much later on in their lives, and it is often the family and relatives of those in care who have to be part of those important conversations.

My Lords, regardless of Department of Health and Social Care policy and NHS instructions to clinicians, we know that DNACPR orders were made without adequate consultation and safeguards. Can the Minister assure this House that the Government will meet with families who have raised concerns about DNACPRs as the cause of deaths? Will he emphatically agree with this House and the families themselves that senior case reviews should be undertaken, with a panel of experts, of all cases where families have raised questions? Will he state categorically again that DNACPR without consent is—

I reassure the noble Baroness that there has been a huge amount of stakeholder engagement, with Mencap, Turning Point and others. It is not the role of the CQC to do individual family reviews, but I can reassure her that we have learned important lessons from this process.

Does the Minister agree that the ministerial oversight committee should also consider looking at end-of-life care?

My Lords, I should declare my interest as chair of Dignity in Dying. What plans do the Government have to increase dramatically the numbers of people who have advanced decisions expressing their views on medical treatment? Does the Minister agree that patients’ wishes should be central to DNACPR decisions, and indeed to all significant medical decisions, particularly at the end of life?

My Lords, we absolutely agree. That is exactly how the guidelines are written and exactly the guidance sent into the system. The issue we face is much more pastoral in nature: it is one of training and creating the space and resources necessary to have extremely difficult conversations. That is the kind of front-line support we need to put in place. It is a question of patient engagement rather than a change of guidelines, but I completely take on board the noble Baroness’s recommendations.

Sitting suspended.

Tuberculosis

Private Notice Question

Asked by

To ask Her Majesty’s Government, further to the announcement by the World Health Organisation on 22 March that an estimated 1.4 million fewer people received necessary care for Tuberculosis in 2020 compared with 2019, what they are doing to tackle Tuberculosis globally.

My Lords, the impact of Covid-19 on other global health issues such as TB is deeply troubling. The UK has a proud legacy of fighting TB globally. Our current pledge of up to £1.4 billion to the Global Fund to Fight AIDS, Tuberculosis and Malaria is tackling all three diseases and helping countries to strengthen their health systems. We also invest in TB research and innovation to help people access new TB treatments.

My Lords, I thank my noble friend for his Answer. Many people believe that tuberculosis is a disease of the past. It is in fact, sadly, a disease of the present, still killing 1.5 million people a year globally quite unnecessarily. By the time this World TB Day has ended, there will have been another 4,000 needless losses of life, and 700 of those will be children. No epidemic in human history has been beaten without a vaccine, yet there is no effective adult vaccine for tuberculosis. I am grateful for the many things that the Government are doing to tackle this disease globally, but will my noble friend assure me that the Government will remain committed to funding the vital research and development for the new tools that will help us to beat this terrible disease by the time of the sustainable development goal which committed to end it in nine years’ time?

My Lords, tackling TB is a crucial part of improving lives. As the noble Lord says, every death from TB is preventable. That is why the UK has been a leading donor on TB for many years; we are consistently among the top three most generous countries. Our research investments have been transformational and have led to at least five new diagnostic tools for TB. Although the pandemic has forced us to take tough decisions, tackling TB remains a priority and global health remains a top UK ODA priority, as set out by the Foreign Secretary just a few days ago. We will provide more information on how we will continue to take a leading role in due course.

I appreciate what the Minister said about the importance of the Global Fund. He will well know that any delay in funding would set a dangerous precedent and undermine the fund’s ability to disperse those crucial funds. What reassurances can he give about the full and timely dispersal of the UK pledge to the Global Fund to Fight AIDS, Tuberculosis and Malaria that keeps to the original timetable?

My Lords, the Global Fund is the principal mechanism that we use to fight TB in developing countries. We believe that the Global Fund has a major role to play in the fight against TB. Our current pledge absolutely reflects this.

My Lords, in the context of the deplorable reduction to the aid budget, how will the Government use their UK leadership through the G7 and G20 processes to drive international collaboration to strengthen essential health services and mitigate the secondary impact of Covid-19, including on TB?

My Lords, this is a very significant year for global Britain, with numerous opportunities for us to demonstrate leadership. The UK will use its G7 presidency to champion the needs of developing countries, including, of course, on health generally and on TB in particular.

Is my noble friend the Minister aware that almost a third of the global population is infected with the TB bacterium but only 5% to 10% of these will go on to develop active TB? Chief among those are people with HIV, who may have suppressed immune systems: for them, preventive therapy is absolutely crucial. That includes patients here in the UK. Can he tell us what progress is being made in reaching the target of providing preventive therapy to the 30 million people most at risk by 2022?

My Lords, tackling TB is a crucial part of improving the lives of vulnerable people, as the noble Lord has said, such as those living in poverty or with HIV, who are most at risk. While TB affects mothers and children less than diseases such as malaria do, 16% of all TB deaths in 2019 were still of children under 15. For these reasons and many more, tackling TB remains a government priority.

My Lords, the Minister has stressed that health is a priority for this Government, so what assessment has been made of the impact of UK aid cuts on global efforts to build resilient and responsive health systems to deliver on the sustainable development goal target to end TB?

The pandemic has forced us to take tough decisions, including temporarily reducing the aid budget. However, global health remains one of the UK’s top ODA priorities, as set out by the Foreign Secretary. We will continue to be a global leader on global health with a major portfolio of investments focusing on where we can make the biggest possible difference. The current resource allocation round has not yet concluded, so I am not able, at this point, to confirm the settlement for global health.

My Lords, TB is a contagious and dreadful disease. I know that because my father died after suffering from TB. He contracted TB during the 1950s, however, when it was incurable in India. Nowadays, TB is curable and occurs predominantly in South Asia and Africa. I am aware that the UK aims to give aid to these countries mainly for education and skills training, but will the Government earmark part of the funds to tackle diseases such as tuberculosis?

My Lords, I can confirm that tackling TB remains a priority. As with all ODA, we are obliged to spend money in the manner that delivers the best possible results. The noble Lord mentioned his father’s death, and I am very sorry to hear that. He also mentioned that TB was treatable, although it is worth pointing out that we have serious challenges with anti-microbial resistance. Drug-resistant TB is a real challenge, so we will have to continue to address that issue as well, and draw attention to the fact that drug-resistant TB causes, we believe, a third of all deaths from anti-microbial resistance.

My Lords, this past year has seen a huge disruption to the delivery of vaccinations and medical treatment and care, with TB being one clear example. Given the increased need for global health assistance because of Covid-19, surely we should be stepping up, not stepping back. Do the Government really think it is right to be cutting life-saving medical UK aid during a global pandemic?

My Lords, we are not stepping back; we are stepping up. In all, we have committed up to £1.3 billion of ODA to counter the health, humanitarian and socio-economic impacts of Covid-19 and to ensure an equitable distribution of vaccines. The UK is working with countries to ensure that, as far as possible, essential TB services continue; that TB patients are protected from Covid-19 infections; and that TB programmes make good decisions about redeploying their resources to national Covid-19 programmes in a sustainable way. Our funding has supported the Global Fund’s Covid-19 response mechanism, set up specifically to help countries keep on track during, and because of, the pandemic.

My Lords, the ODA budget performs a great role in fighting TB and many other evils across the world. At the same time, the UK Government have rightly spent billions on a superbly successful Covid-19 vaccination programme at home, and I congratulate them. However, when we have completed that work here and excess vaccines are, hopefully, shared with those countries that need them across the world, including developing nations that are otherwise in receipt of ODA, can the Minister reassure us that the cost of those vaccines will not count towards, or be deducted from, our aid spending targets?

My Lords, my noble friend asks a serious and important question. I am afraid that it is not one that I can answer right now, but I will convey it back to the department and my colleagues, and I am sure that the answer will soon be forthcoming.

My Lords, as well as the difficulties for TB care, the pandemic has led to huge challenges in the delivery of life-saving contraception. This will be compounded by the plan to cut aid so significantly. The UK’s flagship family planning programme, WISH, is at risk and reports at the weekend highlighted that if funding is removed, we could see up to 2.5 million more unintended pregnancies and 22,000 maternal deaths. Does the Minister agree that contraception is one of the most empowering things that we can do for women globally, and can he please do what he can to protect this vital programme from closure?

My noble friend makes a really important point. It has been the Government’s view for some time that investing in family planning is an extraordinarily important way to empower particularly women and girls in vulnerable communities. There is also a direct link between empowering women and girls and consequently enabling families to make decisions for themselves on their own terms in relation to the size of their families. For many reasons, investing in family planning has always been a priority, and I assure my noble friend that it will continue to be.

My Lords, I was pleased to hear from the Minister what the Government are doing. There is a real urgency to tackle this disease worldwide, not least because we are acutely aware of how easily disease can spread rapidly across borders. Does my noble friend have access to any figures regarding the number of TB cases in the UK in recent years, and whether the disease is on the increase here? He may have to ask his colleagues in the Department of Health about this.

I am afraid that I cannot give accurate figures, but they do exist—I have seen them, but I do not want to mislead the House. I will get back to my noble friend after consulting with the Department of Health. The numbers are very small, certainly in comparison with any of the target countries that we focus on through our ODA.

My Lords, does not our success in creating a vaccine for Covid in very short order suggest that maybe now is the time when, if we put our shoulders thoroughly to the wheel, we can do the same for tuberculosis, and that when our aid budget is again increased, a large lump of the first year allocation to this purpose would have a great benefit for the world?

My noble friend is right. A range of approaches will be critical in tackling TB in the longer term. We must advance universal health coverage to ensure that all people with TB have access to affordable, quality care, and address risk factors for TB, such as poverty and malnutrition, but clearly a TB vaccine would be a game changer to prevent TB. Vaccine development research is high risk, but with potentially gigantic rewards. We will continue assessing the UK’s contribution to vaccine development as the pipeline of potential TB vaccine candidates develops.

Business of the House

Motion on Standing Orders

Moved by

That Standing Order 73 (Affirmative Instruments) be dispensed with on Thursday 25 March to enable motions to approve affirmative instruments laid before the House under the Public Health (Control of Disease) Act 1984 to be moved whether or not the Joint Committee on Statutory Instruments has reported on them.

Motion agreed.

Business of the House

Timing of Debates

Moved by

That, notwithstanding the resolutions of 4 June 2020 and 9 February 2021, the debate on the motions in the name of Lord Bethell set down for Thursday 25 March shall be time-limited to five hours.

Motion agreed.

Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2021

Motion to Approve

Moved by

That the draft Regulations laid before the House on 22 February be approved. Considered in Grand Committee on 18 March.

Motion agreed.

Defence and Security Industrial Strategy

Statement

The following Statement was made in the House of Commons on Tuesday 23 March.

“With permission, I should like to make a Statement on the future defence and security industrial strategy. Last November, the Prime Minister announced he was increasing spending on defence by £24 billion over the next four years. Last week, the Government published their conclusions from the integrated review, the most comprehensive survey since the end of the Cold War.

Yesterday, my right honourable friend the Secretary of State for Defence set out what amounts to the biggest shift in defence policy for a generation—a policy that will see us reinvesting, re-equipping and reorganising to face the threats of tomorrow. In doing so, he reconfirmed this Government’s commitment to spend more than £85 billion over the next four years on equipment and support for our Armed Forces. That reflects the fact that our Armed Forces will need to be present and persistent, and agile and adaptable, in an ever-evolving threat landscape. That is why it almost goes without saying that the most important thing in defence procurement is ensuring our people have the right capability, at the right time, to preserve our national security.

Our success hinges on a productive relationship with industry. The UK’s defence and security industry are world-renowned. Ministry of Defence spending in the sector secures more than 200,000 direct and indirect jobs across the UK, while the industry’s success as the world’s second largest global exporter of defence goods and services supports many thousands more. The sector provides our deterrent and underpins our critical national infrastructure. Through the MoD’s £300 per capita spend across the UK, it generates valuable skills and technology. The security industry alongside it, of more than 6,000 companies, is a font of enterprise and entrepreneurship. Last year, cybersecurity firms raised more than twice as much investment as they had in 2019.

Overall, defence and security is one of the binding elements of our successful union. Our world-class workforce builds everything from submarines to Typhoons right across the country. We have frigates made in Scotland, satellites in Belfast, next generation Ajax armoured vehicle technology in Wales and aircraft production in the north of England. We must never take for granted these industries, the skills they develop or the contribution they make to UK resilience, operational capability, and prosperity. We must do more to recognise explicitly the social value that government procurement can generate throughout the union.

To ensure that we continue to have onshore capabilities that meet our needs and continue to generate prosperity long into the future, I am today publishing our defence and security industrial strategy. I am pleased to say the strategy is a detailed policy document, and rightly so, but its significance can be summed up in a few sentences. It signals a shift away from global competition by default towards a more flexible, nuanced approach. It provides, and we will continue to provide, greater clarity about the technology we seek and the market implications long before we launch into the market, allowing companies to research, invest and upskill. It identifies where global competition may not be compatible with our national security requirements and, at last, it regards industry as a strategic capability in its own right—an industry we must devote our attention to if we are to maintain our operational independence.

Today, I want to highlight three themes in particular that are at the heart of DSIS. The first is our ability to work together to generate growth and prosperity across the union. DSIS sets the framework for greater integration between Government, industry, and academia. It will see us working more closely, too, with top-flight research and those companies, great and small, that make this country so celebrated in the field of innovation. Through a better understanding of requirements, companies will be able to seize opportunities, pool resources and upskill to deliver cutting-edge capability onshore in the UK.

That is a framework that works. Our future combat air system shows that the principles of DSIS are already delivering. A fundamental strategic decision for this country, it will ensure UK air power continues at the cutting edge as it evolves through this decade and beyond. We are investing more than £2 billion over the next four years in this British-led international collaboration, safe in the knowledge that it will leverage hundreds of millions of pounds of investment from the corporate sector. These future systems will not just build technology but develop skills and create opportunity for 2,500 apprentices over the next five years. “Generation Tempest”, as we have dubbed this cohort of future talent, will, in turn, create extraordinary export opportunities with our friends and allies overseas.

Of course, competition remains critical in many areas. Even where we have already developed close partnerships at the prime level, we will expect to see productivity incentivised and innovation encouraged. Across all our national security procurement, DSIS will mean more transparency, more clarity of our requirements and a more co-operative approach to business. We are replicating this joint approach in other sectors: ensuring that we deliver our strategic imperatives, from nuclear to crypt-key; complex and novel weapons; and new opportunities that are opening up in areas such as armoured vehicles as we develop a new land industrial strategy.

Critically, our spending on FCAS reflects an increased willingness to invest in research and development. Overall, we are investing more than £6.6 billion in R&D over the next four years. That will support next-generation capabilities, from space satellites and automation to artificial intelligence and novel weapons. The message that our R&D spend sends, coupled with the clear direction of travel we are providing about our future priorities, will give businesses the confidence to invest.

That brings me to another key element: we must forge stronger international partnerships. By doing more R&D, we will keep ourselves current and encourage the very best from outside these shores to collaborate with UK companies. I have already mentioned FCAS as one example of how a UK-led collaboration with allies and partners can work, but we see it elsewhere in other air programmes, such as the UK’s significant contribution to the US F-35 stealth fighter or our ongoing investment in Typhoon with our European partners. Time and again, we see how international collaboration can deliver the very best kit for our people.

As part of this international emphasis, DSIS also puts a renewed focus on exports. As we demand more of industry to meet our requirements, so we need to offer it more support to win abroad and deliver economies of scale. It is because of our recent investments in maritime that I am the first Minister for Defence Procurement in a generation to talk about selling our state-of-the-art ship designs to our close friends in Australia and Canada, in respect of the Type 26, and, we hope, to others around the world. Notably, our Type 31 is a frigate that will be multi-purpose and has been specifically designed with the needs of international partners in mind.

Our integrated review seeks to capitalise on this new export-led approach, not only setting out our plans to deliver the eight Type 26s and five Type 31s but highlighting our investments in next-generation naval vessels, including Type 32 frigates and fleet solid support ships. We believe it is time to spark a renaissance in British shipbuilding. That is why we are today changing our naval procurement policy to make clear our ability to choose to procure warships of any description here in the UK.

The third and final theme of DSIS that I want to highlight is achieving real reform in how we procure. Some of this is about driving pace and better working inside the MoD to deliver capabilities at the speed of relevance, but it is also about changing how we interact with our suppliers, reforming the Defence and Security Public Contracts Regulations 2011 to focus more on innovation and increasing the agility of acquisition. We are adopting the social value procurement policy to ensure that wider qualities such as skills creation or supply chain resilience are explicitly taken into account in tender evaluation. That will be mandatory under DSPCR from 1 June.

We will be doing more to incentivise continuous improvement in single-source procurement. We want to ensure that the supply chains of our primes are constantly open to innovators, and we want to ensure that our fantastic small and medium-sized enterprises—the lifeblood of defence—get a fair chance when it comes to winning work, not least from inward investors whose interest and investment in the UK we will continue to welcome.

DSIS signals a step change in our approach to the defence and security industrial sectors. Ultimately, DSIS will make a huge difference to our nation’s defence. It will help retain onshore critical industries for our national security and our future. It will help us develop advanced skills and capabilities. It will help us realise the Prime Minister’s vision of the UK as a science superpower. With defence procurement benefiting every part of our union, it will help galvanise our levelling-up agenda, creating a virtuous circle whereby the support we provide to those who defend and protect us becomes a catalyst that propels jobs, skills and prosperity in every corner of our United Kingdom. I commend this Statement to the House.”

My Lords, the publication of this strategy is welcome, especially since companies across all sectors have had an extremely tough year. The Government have noted that businesses have cut back on research and development, training and other investments in future capacity and productivity, due to Covid-19. However, the impact of the pandemic on the defence and security sectors is not explored in detail in the strategy. How many jobs have been lost? How many people remain on furlough? How much government support has been awarded to these sectors?

Labour welcomes the publication of this strategy. Indeed, the very use of “strategy” is a victory in itself. We welcome the confirmation that global competition by default, begun by the White Paper in 2012, has gone. It is high time that we put an end to a British Government being just as happy buying abroad as building in Britain. We also welcome the change in naval procurement policy and the commitment to invest £6.6 billion in defence research and development over the next four years. We welcome the Prime Minister’s extra £16.5 billion in capital funding after the last decade of decline, but 30,000 jobs in the defence industry have gone since 2010, and nearly £420 million in real terms has been cut from defence R&D. In many UK regions, the money promised today will still be well short of what has been taken away over the last decade.

The strategy

“aims to establish a more productive and strategic relationship between government and the defence and security industries.”

This is welcome, since the weapons of the future are just as likely to be developed in the private sector as in an MoD lab. We now need to ensure that this is the start of a new era, with the aim not only of making and maintaining in Britain but of developing the technologies and companies that we will need in 10 years’ time to procure in Britain. Innovation and growth are driven by our precious SMEs, and this is certainly true in these sectors. The defence supply chain is made up of highly specialised SMEs and the strategy even states that SMEs make up 95% of the security sector. We must ensure that these businesses are supported as well as protected.

It is welcome to see that the SME spend is going in the right direction, but it is not fast enough. The current MoD SME action plan states that the Ministry of Defence has a target of 25% of its procurement spend going to SMEs by 2022, but that target is not mentioned in the new strategy. Can the Minister confirm whether the target has been dropped?

The strategy says the Government will be publishing a fresh SME action plan to set out how the department will maximise opportunities for SMEs to do business with the MoD. The current SME action plan is due to last until the end of next year. Will the refurbished plan start after that?

The strategy also alludes to other new strategies, so it would be helpful for the Minister to give more details about when the new defence, science and technology collaboration and engagement strategy and the AI strategy will be published. How will the AI strategy seek to catch up with the long-standing AI investments in China and the US?

The National Security and Investment Bill is also currently progressing through this House, and it is interesting to see more detail about how it relates to the MoD, which was probed in Committee. The strategy reveals that a separate MoD directorate will be established, focused on broader economic security and supporting the implementation of the National Security and Investment Bill. How will that new directorate work with the investment and security unit in BEIS? Will the new directorate help businesses with the processes of mandatory and voluntary notifications?

Today the Government are asking industry to do more with more. Ministers have to get this right. The next step is to focus clearly on delivery. The document contains a wealth of detail, most of which is about the new initiative and changes in direction. Will the Minister commit to reporting to the House on progress in 12 months’ time?

My Lords, another day, another defence Statement repeat, and an opportunity for us to probe the Government’s thinking about wider issues of the integrated review in terms of security, defence and, on this occasion, the defence industrial base.

Like the Labour Front Bench, we broadly welcome this paper. However, I would be a bit more cautious than the noble Lord, Lord Tunnicliffe, and I have a few more questions that might sound a little more concerned about the Government’s thinking in terms of the future. As the foreword to the report states

“our forces require equipment which is state of the art. Just as we are refreshing what we require of our Armed Forces, we are reviewing the equipment they will need to face tomorrow’s threats and setting out a path for innovation for the future.”

That is absolutely right. However, should we be thinking about tomorrow or more about the day after tomorrow? I ask that in particular because yesterday’s Statement in the Commons reaffirmed the Government’s commitment to spending another £85 billion over the next four years on equipment and support for our Armed Forces. That spending is clearly very welcome, but it essentially takes us to the end of this Parliament. What is the longer-term thinking? Research and development is clearly important, but there is a danger that the Government are still thinking in parliamentary cycles and not necessarily about the wider defence procurement situation, which is very different and runs into decades, not merely two or three years. What thinking is going into longer-term planning? The Statement that has been repeated today gives some important insights, but it gives us tomorrow, not the day after tomorrow.

Unlike the noble Lord, Lord Tunnicliffe, I have a slight concern that the new approach signals a shift away from global competition by default. It is right that the UK is resilient, that it has a secure industrial base, that we are able to engage in research and development and that we should be able to have first-class building of ships and other equipment, as stated, right across the United Kingdom. The defence industrial base is clearly very important.

The Statement talks about exports. If the UK is saying that it is no longer going for global competition by default, what work are Her Majesty’s Government doing to persuade our partners and allies, and others who might consider purchasing from the UK, that they should not also pursue a domestically focused agenda? While it is clearly important that we develop things domestically, that export market is flagged up, so there are some questions that may need further exploration.

I ask the Minister to give us a bit more information about the proposals on procurement. Over the past decades—this is not a problem of any individual Government; it is systematic—there have been issues about major capital projects being prone to overspend and overrun, with knock-on effects on the defence budget. How will the changes to procurement affect this? Will we not have so many bespoke projects? How does that fit with the discussions that the Government are having with our defence industry? Can the Minister reassure us that the proposals put forward in the Statement and the strategy document are led by defence needs, not defence industry priorities?

My Lords, I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Smith, for their comments. I think I feel a bit like the musical song, “Getting to Know You”. I never seem to be quite away from this Dispatch Box on defence matters, but that is a privilege. I thank the noble Lord and the noble Baroness for their generally positive response to the strategy. I understand that the noble Baroness had some reservations and I shall try to assuage her concerns.

Frankly, I think this new defence, security and industrial strategy marks a watershed for the MoD. It is a substantial document. It is the first time in a long time that we have had true analytical discernment of what the challenges are. We need to understand not only what the threats are but how we are going to respond to them and then recognise that we actually need to be able to respond to them when they arise rather than thinking about the response and hoping to find the technology or the equipment some way down the line. The strategy completely turns on its head the whole pace and depth of the co-operation and collaboration with industry in a very positive manner.

The noble Lord raised the issue of jobs. As he is aware, the defence and security industry in this country is one of the major job providers. We think that over 200,000 jobs across the UK are sustained by these industries, which are globally recognised and renowned. The whole essence of the strategy is not only to secure the defence equipment support and technology that we need when we need it but also to ensure that there is an input to the economy and there is an export potential, so I think his reservation about the job situation is perhaps unfounded. We can look to the strategy to make a singular improvement in how we relate defence investment activity to a broader benefit to the economy and to our exports.

The noble Lord narrated a number of aspirations. I largely agree with them and I suggest that those are in essence met by the paper. He wanted to know how individual parts of the intelligence would join up, and he was interested in some of the specifics about acquisition and procurement.

In the section devoted to that, there are some very reassuring statements, including the proposed reform of the defence and security public contracts regulations, reforming the single-source contracts regulations, and publishing afresh the MoD SME Action Plan; I reassure him that is to be published later this year. In that connection, I mention the successful and effective investments of DASA, the defence and security accelerator, which has done pivotal work since it was introduced. It is an essential support, not least to SMEs and start-ups. That is conducive to a more diverse and innovative market.

The noble Lord particularly mentioned the artificial intelligence strategy. That will be in conjunction with the new defence artificial intelligence centre, which is hoping to accelerate the adoption of this transformative technology across the full spectrum of our capabilities and activities.

The noble Lord also raised the very important matter of measuring delivery against the laudable intentions and objectives of the strategy document. I say to him that, yes, this is recognised and that, because a lot of this is not just MoD but across government, Ministers across government, led by the Secretary of State for Defence, will regularly review progress against the strategy.

The noble Baroness, Lady Smith, was perhaps a little less warm in her reception of the document, although I detected that she is broadly in approval. She asked the pertinent question: is this about today or the day after tomorrow? I suggest that it is about both because, given how the strategy is structured, it recognises and continues much of the good work that has emerged in recent years. It is knitting that together, as I said, based on analysis of the threats we face and how we must respond. There are certain strategic imperatives and areas of independence of operation where we will want that to happen from providers in the UK. I say to her very strongly that this is a strong signpost of the direction of travel for both the MoD and our industry partners.

The noble Baroness asked a pertinent question, which was well justified, about the international community because, as the noble Lord, Lord Tunnicliffe, identified, we have departed from the former premise of “global by default”. She is quite right because, although there will be a premise on which we operate for our strategic imperatives and areas where independence of operation is absolutely critical—it will fall to our UK providers to assist with that—we also recognise of course the importance of the international community.

Our global alliances and partnerships are of strategic importance and, as a leading advocate for the development of innovative, adaptive capabilities, the UK will invest in emerging technologies, using the strength of the UK’s world-class industrial and technological base. We will be open to working with allies and partners through international programmes, and these existing initiatives will continue. There is clearly an opportunity to work closely with our partners and other industry providers abroad. The noble Baroness will be aware that the UK will work internationally to develop key military capabilities, such as developing our future combat air system.

So I reassure the noble Baroness that, although we understand that this Statement gives a clear direction of travel to encourage and support our United Kingdom-based defence and security industry partners, it is not to the exclusion of international provision, where we consider that that does not compromise our security but offers an attractive proposition.

The noble Baroness spoke about overrunning budgets in the past. That is a very legitimate reservation to mention. There have been procurement issues in the past and these have not been proud moments for the MoD. But the way in which the strategy is constructed and conceived, which is about engaging with industry from the earliest moment, identifying what we need, discussing with industry how that might be provided and then being sure that there is a constant monitoring process of how that develops as orders are placed, means that many issues that used to obstruct the smooth progress of our procurement contracts are now being ironed out. In some cases, they are actually being eradicated, because of the much more innovative and intelligent approach to how we liaise with our industry and security partners.

I have tried to answer the principal points the noble Lord and the noble Baroness raised. I hope I have addressed them adequately.

My Lords, I draw attention to my interests as set out in the register. This was a good review, which concentrated on many key points, including resilience. But is there not a risk that reducing the Regular Army reduces the connection between the Armed Forces and the public they serve, and hence reduces support for the Armed Forces and that very resilience we need to build up?

My noble friend asks a very perceptive question. We are satisfied that, despite a reduction to 72,500, we still have a very significant cohort of professional military. We are satisfied that we can discharge all the obligations falling upon us, whether in conflict, peacekeeping, or MACA requests for domestic resilience at home.

We have seen, through the response by the Armed Forces to the Covid pandemic, what tremendous respect and affection the public have for our Armed Forces, and I hope that that will endure. There may be other occasions where we deploy our Armed Forces on MACA tasks or other civil support tasks at home, and that will reinforce not only the professionalism they possess but the affection with which the public rightly regard them

I draw attention to my interests in the register. As our Armed Forces move from a platform-centric approach to capability to one focused on technological advantage, it is ever more important to connect the operational requirement to the best available technology quickly. In the world of romance, we would be advocating the need for a speed dating agency.

Previously, the romance has failed because the potential match is broken between the cautious process of defence procurement and the monopolistic position of defence industry primes. The relationship has in fact been an obstacle to the rapid achievement of technological advantage. So I ask the Minister: which part of the new defence industrial strategy establishes the dating agency? Who is in charge of it and how does the wider world of technical opportunity sign up to it?

I say to the noble and gallant Lord that I love the analogy; it is very apposite. He identifies an important point. He is aware that there is constant consultation and discussion within the MoD with our single services about what their needs are. In the past, the blockage has been in translating need into the production of kit or equipment. This new strategy makes it clear that there will now be a much smoother, clearer progression. The early engagement with industry is critical to establishing that we have identified what the single services want—and then we have to make progress in delivering that as efficiently and as swiftly as possible.

My Lords, given the Prime Minister’s commitment to thousands of additional jobs in the defence sector, can the Minister tell the House how the jobs envisaged in this Statement will be distributed across the regions and nations of the United Kingdom? How will the strategy contribute to levelling up between the north and the south? If she cannot give all those details at the moment, can she please place a copy of them in the Library?

Yes, it is a very important part of what we are doing. As the noble Lord spoke, I was looking at page 13 of the strategy document, which has a marvellous depiction of the reach across the United Kingdom of what we do with industry and security. It is very clear to me that this is all about the union and levelling-up. The noble Lord will look at those locations and see the potential for many of these areas to benefit from the fruits of the new strategy.

The Government state that the future will be digital, cyber and technological. It so happens that many years ago I was fortunate to be an Admiralty student apprentice, becoming a graduate engineer in the process. I call on the Minister to set out where the Government plan to find the young students who excel in the applied sciences now, this year, ready to develop the technical and engineering skills required for the 2,500 apprentices over the next five years. Most importantly, where will they find the highly qualified and skilled instructors to train this new model of a technician-based workforce?

This is all about an increasingly close partnership between government and industry. The noble Lord will be aware that industry, particularly in defence, employs not just many employees directly but many modern apprentices, and in some cases that has been found to be a proven route for learning and commitment to the corporate organisation. It is an exciting future for young people interested in STEM subjects. Across the nation, particularly in the devolved Administration areas, where I have engagement, there is an interest in progressing STEM and using the critical mass of the MoD providing those skills in the devolved nations to help them with their educational delivery.

My Lords, may I ask about the rollout of work? Part of the problem in the industry has been that work is inconsistent and erratic. While there is supposed to be a shipbuilding strategy, can she tell the House whether companies such as Harland and Wolff in Belfast will get actual orders to contribute by supplying ships and other vessels so that there is consistent work in the defence sector, rather than an erratic supply of work?

The noble Lord will be aware from the White Paper published on Monday that very close attention was paid to the rollout of an exciting shipbuilding programme. There is an intention to refresh our national shipbuilding strategy, and the Secretary of State for Defence is the shipbuilding tsar. So there is a real and rooted interest in the future of the shipbuilding industry in the United Kingdom. I am absolutely certain that all shipbuilders in the UK, if they are interested in the construction of naval marine craft, will engage with the MoD to see what opportunities await.

I can also say to the noble Lord, particularly in relation to Belfast, that of course we have Spirit AeroSystems and Thales. Indeed, I think it was Spirit AeroSystems that recently, this year, got a contract to develop the RAF’s lightweight affordable novel combat aircraft. We are very mindful of the contribution that can be made across the UK.

My Lords, this comprehensive industrial strategy is very much to be welcomed. I focus on the shipbuilding aspects to seek clarification from the Minister on a couple of points. It would seem that opening competition for building of warships is to be nuanced, to use the expression used by the Minister yesterday in the other place and in the strategy paper itself. The noble Baroness has touched on this—but, to be clear, does that mean that building warships offshore in future will not be precluded?

Secondly, the impression is given that RFAs such as future support ships may be classified as warships for the purpose of shipbuilding. Have the Government considered the implications of this, in so far as the present classification of RFAs as merchant ships allows them, among other things, freedom of navigation in certain territorial waters not allowed to warships?

I think the noble and gallant Lord would agree that what was outlined in the Command Paper is exciting, not just for the UK shipbuilding industry but for the Royal Navy. The thrust of the security and industrial strategy paper is obviously that we want to be sure that we have a sustainable defence industry in the UK, which includes shipbuilding.

On the noble Lord’s particular question on whether we would never look abroad for a ship, I would not say that. It would be a very short-sighted view to take. There might be a situation where a product was available and we would think it safe to buy it without compromising our operational independence.

The classification of ships is clearly a matter for the Secretary of State to determine. I am sure he will do that on a case-by-case basis.

My Lords, I think I would give eight out of 10 for this. I am delighted that the Government recognise the importance of defence industries and the sovereign capability. But I join the broadside from the other side of the House—from the noble and gallant Lord—about shipbuilding. Some months ago, the Prime Minister said that there was a renaissance in British shipbuilding, and he mentioned a lot of frigate orders. Since then, there has not be a single frigate order. The Type 32 talked about is not even on the design board. The first three Type 26 frigates were ordered five years ago and the first will not be delivered for another six years, which is appalling. Have there been any meetings between the Secretary of State, the Minister for Defence Procurement and BAE Systems to try to squeeze the time needed to build these ships, which would make them a lot cheaper, and to get sensible orders in for the remaining five, driving the costs down—or are they leaving it just to run and run as a cash cow for BAE Systems?

To take the last point first, no, absolutely not. While I welcome the noble Lord’s eight out of 10 for the report, which suggests that we are making progress, I think he makes a slightly harsh assessment of the shipbuilding programme. He is aware that we are committed to the eight Type 26 frigates being built in the Clyde, replacing the Type 23s and being in service for the late 2020s. He is also aware of the five Type 31s being constructed in the Forth at Rosyth, which should also be in service for the late 2020s. The Prime Minister outlined the desire to have five Type 22s. There is a steady drumbeat of orders and the yards are processing these orders. If I may say so, the noble Lord’s representation of the situation is rather dismal and not warranted.

My Lords, to follow up on the question from my noble friend Lady Smith, military procurement has a history of overrunning projects, which people will not back out of because of personal involvement—and there is something in there, too, about jobs. Are we going to have a strategy and justification for saying no to a project, particularly if that means that we are not buying an off-the-shelf replacement which meets a battlefield capacity that we think we might need?

I am sure the noble Lord will understand that the budget constraints on all departments, not least the MoD, are visible and exacting. Certainly, the MoD is very mindful, which is what underpins the strategy. How we spend money in future has to do two things: achieving the procurement and acquisition of the technology that we need as swiftly as we can get it when we need it, and ensuring that we contribute to the broader economy by generating activity in the domestic economy and possibly the potential for exports. The scenario that the noble Lord envisages is unlikely to arise because from now on procurement will proceed on a very different basis from what we have known in the past.

I remind the House of my interest as chairman of the Reserve Forces 2030 review. If we are to meet the ambitions of the integrated review, we need to find better ways to share skills between the private sector and defence. One way is the use of the sponsored reserve—for example, the Voyager programme, whereby Airbus engineers service the aircraft during the week then don their uniforms at weekends, giving an assured capability. That is, however, an underutilised resource, with fewer than 1,500 instances across defence. Is now the time to ensure that all future major defence contracts include a provision for sponsored reserves?

I thank my noble friend for his interest in and continued focus on reserves. I also thank him for his report, the Reserve Forces 2030 review, which will be presented to Parliament soon, as my right honourable friend the Secretary of State said in another place on Monday. As the Secretary of State also acknowledged, in previous decades there has been resistance within MoD to recognising the potential of reserves and using them properly. On sponsored reserves, which my noble friend highlights, they are indeed already playing a significant role. I know that the Armed Forces are looking at the options for developing their role, for example in growth areas like space, cyber and other applied digital skills.

My Lords, as president of the CBI, I can say that industry welcomes the new defence and security and industrial strategy, or DSIS, and the vision that lays out the defence sector’s strategic relationship with industry. The DSIS is ambitious regarding R&D and innovation, exportability and global Britain, and the creation of BARPA is an exciting opportunity. Will the Minister explain how the Government will ensure that innovation is rewarded fairly with a collaborative approach, with the management of intellectual property helping to crowd in private sector investment and MoD R&D activity? Also, does she agree that, by using its purchasing power to help pull developing technologies through to market at the leading edge of science and technology, it will drive prosperity and generate thousands of highly skilled jobs across the country?

The last point the noble Lord alluded to is very important. Yes, I agree, and we hope that that indeed will be the consequence of the application of this strategy in practice.

On the other issues to which the noble Lord referred, again, early, close engagement between MoD and industry will go a long way to achieving the clarification he seeks. Certainly, introducing intellectual property strategies into the MoD’s acquisition processes for defence programmes to better incentivise and manage risk will also go a long way towards addressing some of the points he raises.

My Lords, I welcome the integrated review and the defence papers that have come from it; that shows a willingness to engage in long-term thinking. My concern is that the emphasis on sovereign capability comes up against our long history of overspending on defence procurement and the difficulty of controlling programmes. What is the Government’s attitude towards common European defence procurement as a means of securing greater cost-efficiency? Why is it that in Europe we are ending up with two separate attempts to produce a next-generation future combat air system? Would it not make more sense to go for a single common approach? In the past, the financial viability of UK defence business has often been secured by arms sales. Do the Government recognise that in future, this is likely to come up against lots of ethical foreign policy and human rights concerns?

The strategy lays out a clear basis for how we will engage not just with our companies at home but with potential suppliers abroad. At the end of the day, we want a quality product providing what our Armed Forces need at a price fair to the taxpayer. Internally, we will be very clear about the pricing structures for these products. Equally, we are very clear that, if we are going abroad or dealing with an international provider, we will monitor and scrutinise that closely. We will be guided on a case-by-case basis as to what we need, who best can provide it and whether it needs to be regarded as a strategic imperative or to have operational independence, in which case it will almost certainly be with a UK provider.

My Lords, it is all very well for the Government to tell us that there will be opportunities for the British defence industry. Does the Minister agree that sometimes, contracts have been awarded strongly influenced by political or industrial pressures, which sometimes leave our forces with unbalanced structures and indeed with equipment inferior to the best available? Surely, the prime need is that the forces should get the best that is available. One example is the Challenger 2 battle tank: the promised export orders fizzled out very quickly and we were left with a tank which could not share its ammunition with any of the other NATO forces.

The sort of scenario to which my noble friend refers may well have happened in the past—but that is where it belongs. The point of this strategy is that there will be hard imperatives for the commercial decisions we take. These will be based on what we need, what is best and who can best provide it for us.

My Lords, I am afraid that the time allocated for this Statement is now up; my apologies to the speakers who were not called.

Sitting suspended.

Arrangement of Business

Announcement

My Lords, the Hybrid Sitting of the House will now resume. I ask all Members to respect social distancing.

For the Third Reading of the Domestic Abuse Bill, I will call Members to speak in the order listed. Short questions of elucidation after the Minister’s response are discouraged; any Member wishing to ask such a question must email the clerk. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely wants their voice accounted for if the question is put, they must make this clear when speaking. We will now begin.

Domestic Abuse Bill

Third Reading

Clause 85: Monitoring of serial and serious harm domestic abuse and stalking perpetrators under Multi-Agency Public Protection Arrangements

Amendment 1

Moved by

1: Clause 85, page 72, line 3, leave out “this Act” and insert “the Domestic Abuse Act 2021”

Member’s explanatory statement

This amendment clarifies a minor defect in the drafting.

My Lords, I am grateful for your Lordships’ patience in enabling me to table and move this short amendment, whose purpose is to correct a minor defect in my original drafting, for which I apologise. I am grateful to the clerks for their advice.

I understand from the Sunday Telegraph that the Government are going to create a super-database, which would include domestic abusers and stalkers, as well as sex offenders. If this were the case, I would naturally be delighted. This would enable police, prison and probation services to track offenders guilty of violence against women and would be a huge step forward in our efforts to tackle gender-based violence and misogyny.

I pay tribute to all those who have campaigned over many years to make this a reality, especially my formidable friend Laura Richards, as well as survivors and the families and friends of victims. I emphasise that we have never been asking for a separate register for stalkers and perpetrators of domestic violence but rather that they should be included on ViSOR—the violent offender and sex offender register. I am sure that we will receive more details when the amendment agreed last week is considered by the Commons after Easter, but I hope that the intention, if not the details, will be on the face of the Bill. Likewise, I have outlined details of the perpetrator strategy which must be an integral part of the policy relating to the database. There must be a statutory requirement for police, prison and probation services to risk assess and manage perpetrators, in partnership with domestic abuse and stalking services. Unless this is mandatory, the key professionals will not always come to the table, and their participation is vital.

I thank the noble Lord the Minister for his work on these issues and, specifically, the noble Baroness, Lady Williams, for all that she has done and for her letter received this morning. Sadly, the letter was not as explicit as some of the media briefings, but I am grateful to her for recognising that there is a consensus that more needs to be done. I suggest that there is a consensus on the actions needed. As the noble Baroness has said in the past, we have already agreed on the ends; I think and hope that, as a consequence of the debate and vote on my amendment on Report, we are now close to agreeing on the means that will bring about a cultural change, focusing on the perpetrators and saving lives. I look forward to hearing the results of the discussions between her officials and experts in developing the database and the perpetrator strategy. I beg to move.

My Lords, I first apologise on behalf of my noble friend Lady Williams of Trafford, who is unable to be present today. The Home Secretary has asked my noble friend to deputise for her at today’s meeting of the G6, which the UK is hosting. The G6 meeting of Interior Ministers is one of the most important long-term, multilateral forums in which to discuss priority home affairs issues with some of our closest security partners. I hope that noble Lords will therefore understand the importance of my noble friend attending that meeting, but she is, none the less, disappointed that this means that she cannot be here today.

I turn briefly to the amendment which, as the noble Baroness, Lady Royall of Blaisdon, has explained, is purely a drafting amendment and, as such, the Government will not oppose it. My noble friend made clear on Report what the Government’s substantive view now is of Clause 85 of the Bill. I hope that the House will forgive me if I do not repeat that position today. It is now for the other place to consider this and other amendments agreed by your Lordships’ House.

My Lords, I am grateful to the noble Lord the Minister for expressing the Government’s position on this amendment. I am sure we are all very proud of the fact that his noble friend Lady Williams, the Minister, is representing the Government at the meeting of the G6.

Amendment 1 agreed.

Motion

Moved by

My Lords, I hope noble Lords will permit me to say a few words to mark the completion of the passage of the Bill through this House. I say, with some hesitation, that this is one of those Bills which has shown your Lordships’ House as its best. My hesitation does not arise from the proceedings on the Bill. Those were marked by speeches of high calibre and engaged debate and, undoubtedly, led to an improved Bill. My hesitation is due to the fact that this was the first Bill on which I worked in my time in this House. When I began work on it, I had nothing to compare it to, but I was fortunate to have the support and wise counsel of my noble friends Lady Williams of Trafford and Lord Parkinson of Whitley Bay. They were right about everything else they told me so, as they have assured me that this Bill shows the House at its best, I am relying on them to be right about that as well.

Having mentioned my noble friends, I must pay tribute to them and give my thanks to those who have supported them and me in this endeavour. We have had the benefit of expert support from officials and lawyers across no fewer than eight government departments: the Home Office; my department, the MoJ; the Ministry of Housing, Communities and Local Government; the Department for Education; the Department of Health and Social Care; the Department for Work and Pensions; the Department for Business, Energy and Industrial Strategy; and the Department for Digital, Culture, Media and Sport; not to mention the devolved Administrations in Scotland, Wales and Northern Ireland, which have also had a hand in this Bill. I also thank the Bill managers, Charles, Pommy, Oliver and Georgina, and the private secretaries, Rebecca and Patrick; their work has been exceptional. If nothing else, the range of government departments and people I have just mentioned shows that tackling domestic abuse is everyone’s business. We are very grateful to all those involved across government.

In addition, we are grateful to Members from across the House. I thank those on the Front Benches opposite for the constructive way in which they have dealt with the Bill, and the very courteous and constructive way in which they have engaged with me. I thank the noble Lord, Lord Rosser, the noble Baroness, Lady Wilcox, and the noble Lord, Lord Kennedy—I am particularly pleased that this Bill is the culmination of his four-year campaign on the issue of GP fees. Last, but certainly not least, I am grateful to the noble Lord, Lord Paddick, for bravely sharing his own experiences of domestic abuse, and to his colleagues on the Liberal Democrat Front Bench, the noble Baronesses, Lady Hamwee and Lady Burt of Solihull, and the noble Lord, Lord Marks of Henley-on-Thames.

I will also take a moment to thank other Members of this House who have worked very hard. I thank my noble friend Lady Newlove, as well as the organisations which aided her, on their work on non-fatal strangulation —something that is now part of the Bill as a Government-drafted amendment. I thank my noble friend Lady Morgan for her work on threats to release intimate images. Again, this is now part of the Bill as a Government-drafted amendment. In that context, I must give my personal thanks to the noble and learned Lord, Lord Judge, who discussed with me some of the legal issues raised by that amendment.

I thank the noble Baroness, Lady Lister, and my noble friends Lady Bertin and Lady Sanderson—if I may respectfully group them together—for their campaigning on coercive and controlling behaviour, which also is now part of a Government-drafted amendment. I thank my noble friend Lord Polak, who campaigned tirelessly on community-based services. This is something we have now taken on board. We may not have agreed on all points, but I also thank the noble Baronesses, Lady Campbell and Lady Grey-Thompson, for raising the important issue of carers in the Bill, which will be explored further in another place. Finally, I thank my noble friend Lady Altmann and the other sponsors of the amendments dealing with get. It is a somewhat recondite point, but one which causes real distress and suffering.

Whether we have agreed or disagreed, as the noble Baroness, Lady Royall, mentioned a moment ago, in scrutinising this Bill, we have all been striving for the same outcome: ensuring that victims of domestic abuse and their children have better protection and support, and that perpetrators are brought to justice. As she said, the differences have invariably been about the means of achieving this, not the ends involved.

We will of course reflect carefully on the nine amendments agreed by your Lordships’ House against the advice of the Government. We will set out our position when the Bill returns from the other place in due course. We will inevitably debate this Bill at a future date, but I know that all noble Lords will join me in hoping that it will soon be on the statute book, making a real, tangible and positive difference to the 2.3 million victims of domestic abuse each year. I therefore beg to move that the Bill do now pass.

My Lords, along with my noble friends Lord Kennedy of Southwark, Lady Wilcox of Newport and Lord Ponsonby of Shulbrede, I will take this opportunity to thank the noble Baroness, Lady Williams of Trafford, the noble Lords, Lord Wolfson of Tredegar and Lord Parkinson of Whitley Bay, and the Bill team for the patience and willingness to listen that they have shown throughout the passage of this Bill—not just in the Chamber but in the very many meetings that have been held with noble Lords on issues raised in amendments, and in the debates that have taken place. There have been a significant number of instances when Ministers have acknowledged the arguments that have been made in support of amendments and accepted them, put down appropriate government amendments or given undertakings of progress towards the objectives being sought that did not require amendments to the Bill. Ministers deserve full credit for that, and for their willingness to consider the arguments presented.

We have also really appreciated the helpful and informative briefings we have received from outside organisations committed to addressing the issues covered by this Bill. Along with my Front-Bench colleagues, I thank Grace Wright in our office for all the extensive and invaluable work she has done, liaising with so many others involved with the Bill both in Parliament and outside, and keeping us fully briefed on the Bill and its amendments as it has progressed through this House.

There have been a significant number of occasions when this House has agreed amendments to the Bill against the advice of the Government. It remains to be seen what will happen when those amendments are considered by the Commons in what I fear will be a somewhat truncated debate in the other place. What has been interesting is the number of amendments that the Government have accepted, or that have been carried in this House, which have been led not by Front-Benchers but by Back-Benchers, Cross-Benchers and the Bishops’ Benches. That reflects the wide cross-party, Cross-Bench and Bishops’-Bench backing that there has been for so many of the issues debated during the passage of this Bill. It is a Bill that has had very little to do with party politics.

The Bill now goes back to the Commons, where I hope it will not just be the Lords amendments that have government support that will be fully considered. While much progress has been made, there is still scope for further improvement in, and addition to, the content of a Bill that is rightly regarded as a once-in-a-generation opportunity to address head-on the major issue of the unacceptable level of domestic abuse in our society.

We have talked about the Istanbul convention at some length during our debates. The stated purpose of the convention is preventing and combating violence against women and domestic violence. Turkey has just made a decision to annul its ratification of the convention and Poland appears set to follow. This is a major backward step. America under President Biden and European leaders have condemned Turkey’s action. Sadly, we cannot add our voice to theirs, because we have still not ratified the convention. Let us hope that by the time this Bill has had further consideration, completed all its parliamentary stages and become an Act, we will be in a position to ratify the convention in full, and no longer be outsiders.

My Lords, the noble Lord, Lord Wolfson, stole my line. I was going to say that this Bill represents the House at its very best. I can most certainly confirm that to him. The Government have not only listened but gone out of their way to examine the feasibility of good ideas brought forward from all parts of the House. The noble Baroness, Lady Williams of Trafford, and the noble Lords, Lord Wolfson of Tredegar and Lord Parkinson of Whitley Bay, have all gone the extra mile, and I would particularly like to thank their incredibly hard-working Bill teams.

Speaking of which, I thank our own one-woman Bill team, Sarah Pughe, who has responded to my pretty much daily calls with good humour and total dedication. Like the noble Lord, Lord Rosser, I would also like to thank all the outside organisations which have given freely of their time and expertise to help us with this Bill.

However, the wins in the Bill are not for us; they are for the victims and their children. So I thank the Government on their behalf, especially for accepting some of the major amendments on non-fatal strangulation, threats to share intimate images and the extension of the ban on cross-examination. I thank them also for accepting the amendment on post-separation abuse, although I was sorry that this was won at the cost of not moving the amendment that would have added disabled people’s carers into the definition of “personally connected”, the initial vote on which had previously secured a huge majority.

We were also promised a public consultation on evicting perpetrators who are joint tenants and who sit pretty in the family home while the victim is forced to leave. The cross-party group that moved this amendment and others will be holding the Government’s feet to this particular fire, to see what measures they will take to redress this injustice.

Despite strong votes in favour of measures to support them, migrant women were losers in the Bill. There will be no information firewall between the police and immigration, no recourse to public funds and no equality of protection, even though the latter is prescribed by the Istanbul convention. As the noble Lord, Lord Rosser, said, we still have to ratify this, and it weakens our position internationally while we are in that situation.

All victims were potential losers, with the failure of the Government to acknowledge strong support for perpetrator strategy amendments. There will be no multi-agency co-operation, no register of perpetrators and no overall perpetrator strategy—yet. But the amendment tabled by the noble Baroness, Lady Royall, certainly gives us hope. Victims who commit violence against the perpetrator will not have the justification of reasonable force, despite usually being weaker and having to resort to using a weapon to defend themselves, and nor will those who commit offences under coercion. The Government also rejected a registration system for child contact centres. All these amendments commanded strong majorities, so we may well see them again once they have been discussed in the Commons. I hope some further movement can be made by the Government to give these victims the protection they deserve.

Finally, I thank our Bill team, especially my co-leader and noble friend Lord Paddick, who has done so much of the heavy lifting where the police are concerned. He has helped and guided me throughout. The noble Lord, Lord Wolfson, is not the only one for whom this is the first Bill he has led on. I thank my noble friend Lord Marks, whose amazing skill and knowledge has brought us through the courts issues, and my noble friend Lady Hamwee, who did so much in the preparatory stages and on migrant women, and whose support for me has led to a close personal friendship. Other noble Lords have added their passion and expertise, including my noble friends Lady Brinton, Lady Hussein-Ece, Lady Jolly and Lady Walmsley, my noble friends Lord Strasburger, Lord Palmer of Childs Hill and Lord Alderdice, and last—but certainly not least—my noble friend Lady Benjamin. I also give great thanks to my noble friends Lord Dholakia and Lady Featherstone for their contributions in Committee.

It has long been an ambition of mine to play a leadership role on this historic Domestic Abuse Bill. I am so grateful to have had the opportunity to play my part. Thank you.

My Lords, I am delighted and honoured to make the concluding Cross-Bench speech at the Third Reading of this important—indeed, landmark—piece of legislation. I first thank, as so many others have, the three Ministers who have piloted the Bill through this House and the hard-working Bill team. They are so essential to the whole process. The Ministers have been most courteous and extremely hard-working, and they have listened sympathetically, sometimes, to the large number of amendments and the enthusiasm—sometimes passion—with which we have put forward our points of view.

This has become a very good Bill. The Government are to be congratulated on much of the draft Bill and on their amendments, which go a long way, but not quite the whole way, to making it an excellent Act. The widening of the interpretation of domestic abuse and the groups personally connected is excellent. I am particularly delighted by the recognition of the adverse effect of domestic abuse on the children of the family. The appointment of a domestic abuse commissioner is very helpful and I hope the Government will listen sufficiently to her recommendations. There remain areas of considerable importance, which we are sending back to the other place for their reconsideration. I hope that many of our amendments may eventually be accepted and incorporated into the Bill. As the noble Lord, Lord Rosser, has already said, it really will be time, when this Act is passed, to ratify the Istanbul convention.

There will be financial challenges, especially for local authorities, in carrying out the requirements of the legislation. It is important that there is no pecking order and that specialist community-based services are sufficiently funded. Migrants and refugees need to be put higher up on the list of those who need help. Those who are victims of domestic abuse ought not to be at risk, especially of the possibility of deportation. I have, as chairman of the National Commission on Forced Marriage, referred many times to the victims of forced marriage, especially the young women and men—some under 18—who are at risk of being forced into marriage. Equally, as co-chair of the All-Party Parliamentary Group on Human Trafficking and Modern Slavery, I remain concerned about some groups of victims of modern slavery, especially those in domestic servitude. I am glad that the draft statutory guidance refers specifically to these groups. In conclusion, I congratulate the Government on the Bill and hope there will be even more improvements made in the other place.

I am delighted to have played a small part in this Bill, and I pay tribute to my noble friend Lord Wolfson and his colleagues: my noble friend Lord Parkinson, and, especially, my noble friend Lady Williams, who has been involved in so many Bills in this Session. I believe the Bill will leave the House in a better place.

I pay particular tribute to the noble Baronesses, Lady Finlay and Lady Burt, and the noble Lord, Lord Ponsonby, for supporting what I believe is a key amendment on recognising standards for all child contact centres and services. Just as a loophole which has been identified in safeguarding 16 to 19 year-old children will be closed by the important Education and Training (Welfare of Children) Bill, which passed its Second Reading last Friday, I believe this small but important amendment, moved so ably by the noble Baroness, Lady Finlay, and passed by the House, will close a potential and existing loophole by safeguarding children in all child contact centres. I hope my noble friend will embrace this small but important amendment, and that it will be maintained when the Bill passes to its next stages. I am delighted that the Bill has passed this House in a much-improved state. The Minister should take some credit for that.

My Lords, in the seven-plus years I have been in your Lordships’ House, I have been involved in a lot of Bills but this is the first of its kind. There was never one like this, because it has been special. The Bill was universally welcomed but then attracted about 200 amendments, which were fiercely argued. The Government suffered nine defeats in votes and made many concessions. There are still gaps. Other noble Lords have listed them but, for example, there is the Istanbul convention. However, the process has turned a good Bill into a very good Bill.

For me, making misogyny a crime was a priority. I am deeply sad we have not done that but we have moved towards it, and it is a step in the right direction by the Government which we can use to test the process. The Minister said something about this showing your Lordships’ House at its best, but I would argue the Bill shows the Government at their best as well. I wish this were the pattern with all Bills—that this House does its stuff and the Government listen. That would mean we produced much better legislation every time. On behalf of the noble Baroness, Lady Bennett of Manor Castle, and myself, I thank the Ministers for all their hard work and co-operation. I say a big thank you to the noble Baroness, Lady Williams of Trafford, and the noble Lords, Lord Wolfson of Tredegar and Lord Parkinson of Whitley Bay. It has been an experience, and I think it has worked wonders.

My Lords, I see the time and I hope the House will not think me discourteous if I respond very briefly. I am very grateful for the kind words of the noble Lord, Lord Rosser. He was quite right to remind us that the Bill had cross-party support. He was also right to remind me to thank—I fear that I did not, but I do now—the noble Lord, Lord Ponsonby of Shulbrede, who brought his experience as a magistrate in family matters to the attention of the House, which was very helpful in number of issues, and the noble and learned Lord, Lord Falconer of Thoroton, with whom I debated some of the legal matters. I apologise to the noble Baroness, Lady Burt of Solihull, for stealing her lines. I would put it this way: she reassured me that I was, in fact, correct when I said what I did.

The House benefited, as it always does, from the considerable experience and wise counsel of the noble and learned Baroness, Lady Butler-Sloss. I am sure we are all grateful to her. As for my noble friend Lady McIntosh of Pickering, I hope she will allow me to disagree with her when she said that she played a small part. She did not; she played an important part and, with that very important correction, I very much endorse what she said.

Last but certainly not least, if I may put it in those terms, to hear the noble Baroness, Lady Jones of Moulsecoomb, praise the Government is a wonderful thing. It shows that miracles do happen. I can assure her that the Government always listen, we just cannot always say yes. I hope noble Lords will forgive me for being brief, but I do see the time and I beg to move that this Bill do now pass.

My Lords, I thank the House for its leniency. I welcome the super register that has been proposed. I convey my thanks and respect to all noble Lords who have spoken in this debate. It has been my long-standing hope to participate in a small way in this debate, and an honour to have done so. I extend my thanks to the noble Baroness, Lady Williams, and the noble Lords, Lord Wolfson and Lord Parkinson, for their contributions and dedication to this cause. It has been much noted that the sisterhood across the House was incredibly powerful, and I wanted to state that. We have a common purpose in making real changes to the lives of survivors, so will there be a public information campaign to empower women with a message that our society has marked this day to say that we utterly reject violence against women? It is everyone’s business, as has been said, to begin the process of eliminating violence and abuse. It will send a very powerful message to all, around the world, that we intend to stand against violence and abuse in every form.

My Lords, I am grateful for the comments of the noble Baroness. Of course, this Government oppose violence in all forms, especially violence against women. As to the publicity campaign she mentions, she will be aware that there are a number of areas where the Government already have publicity in this area. I am very happy to speak to her to understand particularly what she has in mind, and I will arrange to have that conversation in due course.

Bill passed and returned to the Commons with amendments.

My Lords, I believe it is the intention of the House to proceed straight to the next business, but we shall have a short pause for the rearrangement of Front Benches and so on.

Financial Services Bill

Report (1st Day)

My Lords, I shall call Members to speak in the order listed. Short questions for elucidation after the Minister’s response are discouraged. Any Member wishing to ask such a question must email the clerk. The groups are binding. A participant who might wish to press an amendment other than the lead amendment in a group to a Division must give notice in debate, or by emailing the clerk. Leave should be given to withdraw amendments. When putting the Question, I will collect voices in the Chamber only. If a Member taking part, remotely wants their voice accounted for if the Question is put, they must make this clear when speaking on the group.

Amendment 1

Moved by

1: Before Clause 1, insert the following new Clause—

“Duty of care for financial service providers

(1) The Financial Services and Markets Act 2000 is amended as follows.(2) In section 1C, after subsection (2)(e) insert—“(ea) the general principle that firms should not profit from exploiting a consumer’s vulnerability, behavioural biases or constrained choices;”.(3) After section 137C insert—“137CA FCA general rules: duty of care (1) The power of the FCA to make general rules includes power to introduce a duty of care owed by authorised persons to consumers in carrying out regulated activities under this Act.(2) The FCA must make rules in accordance with subsection (1) which come into force no later than 6 April 2022.””Member’s explanatory statement

This new Clause would strengthen the FCA’s consumer protection objective and introduce requirements for the FCA to make rules for financial services firms that amount to a statutory duty of care.

My Lords, Amendment 1 is in my name and that of my noble friend Lord Eatwell. I thank the noble Lord, Lord Sharkey, and the noble Baroness, Lady Bennett of Manor Castle, for adding their cross-party support on this important issue and look forward to their contributions to the debate. I also thank the noble Baroness, Lady Penn, the Deputy Leader of the House, the noble Earl, Lord Howe, the noble Lord, Lord True, and their officials for making time to discuss this issue after Committee, which has helped us considerably and shed some light on the complex set of consultations that the FCA and the Treasury itself are conducting over the next few months, all of which are happening, of course, during the pandemic and at a time of significant change in duties and responsibilities in all quarters.

In his excellent speech in Committee, my noble friend Lord Eatwell set out the case for the introduction of a duty of consumer care to be placed on financial services providers, which he argued would strengthen the FCA’s consumer protection objective and introduce requirements to ensure that firms operating in the financial sector should not profit from exploiting a consumer’s vulnerability, behavioural biases or constrained choices. I can do little better than rehearse his main points again. Markets in financial products sold to individuals, households and small businesses are seriously inefficient, mainly because of asymmetric information, as the seller of the product typically knows much more about the risks involved in making a particular investment or other financial transaction than does the consumer.

Secondly, given that the FCA’s strategic objective is about promoting competition in the market, thereby improving consumer outcomes, it can either regulate each individual financial product to ensure that the consumer is probably informed, or it could adopt the principle enshrined in Amendment 1 and make general rules, including the power to introduce a duty of care owed by authorised persons to their consumers. The case for a duty of care for consumers was argued very strongly at the time the current regulatory structure was set up; indeed, I was present in many of those debates. But, absent primary legislation or changes to it, the FCA has, perforce, adopted the first option and attempted to deal with each consumer detriment issue as it arises. However, by its own admission, this has not gone very well. From its consultation entitled, Our Future Approach to Consumers in 2017, through to the feedback statement published in April 2019, the FCA has wrestled with the issue of duty of care and is still wrestling today, with a review scheduled to start, we understand, in May 2021.

My noble friend’s case was that the status quo is failing and a new approach is urgently required for two main reasons. First, new products are always coming on to the market, which means that the FCA is always playing catch-up to introduce new rules and has to take time for appropriate consultation and so on to deal with the new threats to consumers. The rush to get a handle on “buy now, pay later” products in this legislation speaks volumes about that approach. Secondly, financial products are now available with one click via the internet, with all that that implies about the failure of the conventional approaches of “know your customer” and the need for careful concern about going through the paperwork and understanding the terms and conditions of what you may be signing up to. In short, fintech, with all the benefits it can bring—well argued by the noble Lord, Lord Holmes— signals the end of the current FCA regulation as we know it. The case for a duty of care approach is unanswerable.

Amendment 1 provides the FCA with the means to end its failure to meet its consumer protection duty through dogged adherence to a failing competition objective. The enactment of the power to introduce a duty of care for consumers would rightly place responsibility for ensuring that markets function well firmly on the shoulders of those who have the information required to attain that goal. If the FCA has the power to introduce a duty of care for consumers, it could finally begin to live up to its strategic objective.

Far too many consumers are being treated inappropriately, whether by the mis-selling of products, by the denial of rights or by obstruction of responses to complaints and so on. If the Government wish to improve on the consumer protections previously enshrined in EU legislation, the introduction of a duty of care on consumers is a safe and sure way forward. It is a way to ensure that markets function well for the benefit of the consumer, as it should be.

I am sure that, in responding to this debate, the noble Baroness, Lady Penn, will try to persuade us that there is no need for this amendment, as future consultations to be carried out by the FCA and the Treasury will cover all these points in detail and so all will be well. Indeed, either or both of these exercises may require primary legislation—that is quite likely—and we will be back again in a few months’ time debating the same issues all over again, when the Treasury has decided on its responses to the consultations and brings forward legislation to implement another generation of regulatory frameworks. I put it to the Government that, while the wording of the amendment may not be perfect, the intent—particularly the wording of subsection (2),

“that firms should not be profiting from exploiting a consumer’s vulnerability, behavioural biases or constrained choices”—

is worth holding on to and action should be taken now. I give notice that, in the absence of a positive response today, I am minded to test the opinion of the House on the amendment. However, if the Minister is prepared to commit to bring this back at Third Reading, with an agreed wording, we could work with her to settle this issue. I beg to move.

It is a pleasure to follow the noble Lord, Lord Stevenson of Balmacara, and to support this amendment. The noble Lord has made a strong and compelling case for both parts of the amendment. The case for and against a duty of care was discussed extensively in Grand Committee and I do not propose to revisit the arguments in detail.

In his speech in Grand Committee, the noble Lord, Lord Davies of Brixton, made a simple but important point:

“The truth is that the industry has a systemic tendency to malfeasance.”—[Official Report, 22/2/21; col. GC 112.]

I listed in Committee some of the many serious instances of malfeasance over the last couple of decades—I am sure that they are familiar to us all—which amply demonstrate the truth of the observation made by the noble Lord, Lord Davies. There can be no doubt that the temptation to malfeasance and the opportunities for malfeasance grow, and are deeply rooted, in the huge inequality of arms. The noble Lord, Lord Eatwell, emphasised that in Committee, as the noble Lord, Lord Stevenson, has just noted. There can be no doubt either that the culture within parts of the financial services industry is, to say the least, not oriented to serving the best interests of consumers. John Lanchester has graphically described the industry as treating its customers as “an extractive resource”. All this is true in an industry that is highly regulated. This inevitably leads to the conclusion that the regulatory regime is obviously and severely deficient.

The FCA has consulted on the duty of care at least eight times in the last five years and is about to do so again, starting in May, apparently. It is not clear, given the Treasury’s current consultation on the FSFRF, why we need two consultations covering the same ground. I know that some respondents to the HMT consultation have already proposed a new duty of best interest or duty of care. There is no reason to suppose that this new, and much delayed, FCA consultation will come up with anything more than equivocation, fence-sitting or long grass, if its previous efforts are anything to go by. Last time round, the FCA found that most respondents considered levels of consumer harm to be high and that change was needed to protect consumers. None of the financial services respondents wanted a duty of care, but 92% of consumers did, in a popular survey commissioned by the FCA’s own consumer panel.

The industry resists a duty of care for obvious reasons of self-interest, sometimes presented as a concern that such a duty would increase costs ultimately to the consumer. This does not say much for our financial services’ belief in competition, nor does it acknowledge the fact that, for example, PPI was sold at a commission rate of 87% or that the industry has had to find the funds to pay over £50 billion in redress for PPI alone.

The Government have argued that a duty of care is not necessary because, to quote the noble Baroness, Lady Penn, they

“believe that the FCA already has the necessary powers to ensure that sufficient protections are in place for consumers, and has the will to act, without the need for a statutory duty of care”.—[Official Report, 22/2/21; col. GC 117.]

Not even the FCA agrees with the first bit of that. In evidence to our Liaison Committee last Tuesday, Sheldon Mills of the FCA was reported as agreeing that the concept of treating customers fairly needed more development if it was to protect them. He confirmed that the FCA would be consulting on options to deliver a higher level of consumer protection in markets. It would be hard to look at the disasters, catastrophes, rip-offs and assorted scams that litter our financial services landscape and justify those two ministerial assertions. Where is the evidence of sufficient protection? Where is the evidence of the will to act in any timely fashion?

If the Government really believe in sufficient protection and the will to act, how do they explain the FOS data? In 2019-20, the FOS dealt with 250,000 cases, one-third of which were judged in the consumer’s favour—evidence of ongoing, large-scale malfeasance. The figures are even worse when it comes to products aimed at the financially vulnerable: 89% for guarantor loans, 84% for doorstep loans and 78% for logbook loans. This does not show sufficient protection or a will to act; it shows a failure to sell the right products to the right people, to explain them properly or to handle complaints properly. Customers were surely right when they told the FCA consumer panel that the customer is not at the heart of business decisions.

FiSMA 2000 does not protect consumers adequately. The FCA is always playing catch-up. Malfeasance continues to grow and to take new forms. Redress is patchy, time-consuming and stressful. A duty of care would address these problems. That is what the FCA consumer panel recommended in its submission to the Treasury’s FSFRF review last month. A duty of care would provide a strong and clear incentive for real, lasting cultural change in our financial services industry. I hope that the Minister will be able to accept our amendment or commit to bringing an equivalent to us at Third Reading. If not, I hope that the noble Lord, Lord Stevenson, will press this amendment to a vote.

My Lords, I am pleased to speak to this amendment. I have worked in this industry for many years. The numerous scams, frauds and scandals that have plagued consumers are ongoing. It seems clear, as the noble Lord, Lord Sharkey, said, that the Financial Services and Markets Acts 2000 does not protect consumers. I thank the noble Lord, Lord Stevenson, for his clear explanation of why the amendment, in all its parts, is required.

A duty of care on providers to make sure that they are considering the interests of their customers would certainly help to address the asymmetry of information between the providers and the consumers. It might also assist customers in the manner that the products that are developed are offered. Too often, providers develop new products with new complexities that are clearly not user-friendly. The FCA requirements are that the risks and details of the products must be disclosed, but the disclosure documents are impenetrable to the ordinary person. Those working at the FCA and those working for the providers understand the language used—it is natural to them—but the vast majority of the public do not understand the specific product literature which the FCA has been relying on to offer this kind of protection. It is clearly not helping consumers to be faced with bamboozling jargon and many pages of legalese in the product descriptions and the terms and conditions.

The FCA consulted on this in 2017 and it released a statement in 2019, and other consultations have covered this as well. I congratulate the Government for having engaged on this issue, and my noble friends Lord True, Lady Penn and Lord Howe; I know they have all worked on this issue. But, from a practical perspective, and as someone who has worked in this industry, developed product for consumers and worked with consumers on the other side who have suffered detriment, I believe that the fears about competition are somewhat overdone. All firms, if they have a duty of care, will then have to look after customers, so the issue of competition should not really pose so much of an impediment. Markets currently function in the interests of providers rather than consumers, and regulators are reactive to problems rather than trying to pre-empt problems that have been highlighted and pointed out for two or three years before anything is actually done—by which time so many consumers have lost out.

Of course I believe that firms should not profit from exploiting the public’s lack of understanding and education when it comes to retail financial services. Successive Governments have talked about improving financial literacy, but they have not managed to achieve this. In practice, providers do not know their customers, the customers do not understand the product literature and, indeed, it seems that there is very often no requirement for the provider to even ask basic questions of the consumer before the consumer buys a particular product. There are countless examples of areas where just a basic question could have prevented a consumer buying an inappropriate product.

So I urge my noble friend on the Front Bench to take up the offer of the noble Lord, Lord Stevenson, and work with him and other interested Peers to come up with a form of words for Third Reading that can prevent a vote on this issue and can also help accelerate the important duty of care that is required. Waiting for a consultation later this year is simply not good enough when it comes to the kinds of scandals and scams that we know are going on day in and day out.

My Lords, it is a great pleasure to follow the noble Baroness, Lady Altmann, and her powerful plea, which I hope the Government will listen to. I also speak to Amendment 1 in the names of the noble Lords, Lord Stevenson of Balmacara, Lord Sharkey and Lord Eatwell, to which I was pleased to attach my name, as I did to a very similar amendment in Committee.

Any noble Lords who have read the Second Reading debate will note that I majored on a “duty of care” in my speech. I used what you might call an expanded definition of “duty of care” to suggest that it might not be too much to put on the face of the Bill a demand that the financial sector should not engage in reckless, fraudulent, corrupt, obviously damaging systemic behaviour, including shipping off tranches of cash into tax havens, deploying complex financial instruments that they clearly do not understand and handing over control of markets to automated systems without adequate controls—things that threaten the security of all of us. But while I believe that principle remains sound, the lawyers convinced me that, in narrow legal terms, “duty of care” could not be stretched that far.

What the amendment here clearly introduces is a duty of care to individual customers. As proposed new subsection (2)(ea) says, their

“vulnerability, behavioural biases or constrained choices”

should not be exploited. Once, perhaps, such a clause was not necessary. There was a not ideal, but certainly useful, constraining paternalism: your local bank manager would look after you, both in limiting borrowing and in making allowances for unexpected disasters, personal and business. That has long gone—as of course has, almost universally, the local bank manager and, all too often, the local bank branch—so we need the law to step in to protect people to constrain the behaviour of financial institutions. As noble Lord, Lord Sharkey, said, we are in a situation where malfeasance has just continued to grow, with technical developments being one cause of that and, as noble Baroness, Lady Altmann, said, scandals and fraud have plagued consumers.

So that is the institutional side of where we are, but we also have to think about the state that people and our society are in today and make the law fit for our modern times, for these are times of massive insecurity. The idea of saving, or of even making the incoming funds match the essential outgoings each month, was an impossible dream for millions of people even before the arrival of the SARS-CoV-2 virus.

No one can know when sudden illness might strike—this Bill has been championed by Macmillan Cancer Support, to whose work I give credit—or it could be a redundancy or a pandemic that strikes people unexpectedly. That is one side of vulnerability and care that financial institutions should acknowledge. As Macmillan highlights, almost one in three of those severely financially impacted by their cancer diagnosis had to take out a loan or credit card debt. That is a public health issue. What we have are institutions that have been making profit from customers, sometimes for decades, and they have a duty to act compassionately and fairly in such circumstances.

But I think we also need to pay a bit of attention to the elements of the proposed new clause referring to “behavioural biases” and “constrained choices”. The noble Lord, Lord Holmes of Richmond, has been a rather isolated champion in this Bill on issues around the use of artificial intelligence algorithms and issues such as their potential bias, but he has also highlighted the way in which financial companies now have a historically uniquely detailed understanding of customer behaviour and the chance to exploit that through complex, opaque mechanisms.

As the noble Lord, Lord Stevenson of Balmacara, said in introducing an amendment, there has always been asymmetrical access to information between financial sector companies and their clients, but this has been massively magnified by technology—something that is only likely to grow. To create an assumption that this inequality of arms should not be misused should, we hope, constrain the behaviour of the financial sector—or at least, if it does not do that, provide a potential route for redress should it occur. There are already many who have need to seek redress for the behaviour of financial sector companies. I spent time with some of them this morning at a meeting of the Transparency Task Force.

As noble Lord, Lord Stevenson, said, the Government are likely now to say “Wait”—but why? We know that there is already an existing massive problem and a huge risk. If the Government do not acknowledge the need to act now, I offer the Green group’s strong support for the intention of the noble Lord, Lord Stevenson, to test the view of the House.

The noble Lord, Lord McNicol of West Kilbride, has withdrawn from the debate, so I call the next speaker, the noble Baroness, Lady Tyler of Enfield.

My Lords, I am pleased to speak in support of Amendment 1. First, I must apologise to the House that I have been unable to participate in earlier stages of the Bill—a matter of real regret to me—but I have been following proceedings closely. I declare an interest as a member of the Financial Inclusion Commission and president of the Money Advice Trust.

I am very keen to support this amendment, which takes forward a very important recommendation from the report of the Financial Exclusion Select Committee, which I chaired, in 2017. That report recommended an expansion of the remit of the Financial Conduct Authority to include both a statutory duty to promote financial inclusion, and a statutory duty of care. In my view, the two are closely linked, but I will obviously focus now on this very important duty of care amendment.

At the Liaison Committee’s follow-up inquiry on financial exclusion, held only last week, powerful evidence was received from charities and others active in the sector that the commercial model only goes so far, and that legislation is required to put an obligation on banks and other financial service providers to provide appropriate services to customers and have proper regard to inclusion.

The regulatory principle at present that firms should treat customers fairly only, in my view, enshrines a weak duty to the consumer. This is further weakened by the principle in the Financial Services and Markets Act that consumers should take responsibility for their decisions. We have already heard examples today of how treating customers fairly does not remove conflicts of interest and or provide sufficient deterrents to firms from mis-selling products and services. Bluntly put, the consumer responsibility principle fails to take into account the imbalance in market power between firms and their customers. Overdraft charges are a good example. It was clear that these were disproportionately falling on more financially vulnerable customers, and banks could and should have known that and done something about it. They did not act by themselves so regulation was introduced. That is why I support a duty of care on firms to act in their customers’ best interests.

A similar duty already exists in other sectors—for example, for legal and medical professionals through the Solicitors Regulation Authority principles or the General Medical Council’s good practice guide, so there is clear precedent. A duty of care on all financial services providers would ensure that they took a much-needed proactive approach in their dealings with customers, acting in their best interests and reinforcing the principle that a firm cannot profit from consumers’ vulnerability, biases or constrained choices. Importantly, it would also incentivise providers to ensure that products and services are what is called fair by design, with inclusion built in from the start.

In 2019, the Treasury Select Committee concluded that it would support a legal obligation:

“While a legally enforceable duty might still require customers to take their own legal action to seek redress against a provider, its very existence would remind providers of their duty to act in their customers’ best interests at all times.”

That is the nub of the matter. I strongly support the amendment.

My Lords, it is a pleasure to take part in this debate on the first group of amendments on the first day of Report on the Financial Services Bill. I declare my interests as set out in the register.

I congratulate the noble Lord, Lord Stevenson of Balmacara, on tabling this amendment and on the way in which he introduced it. These arguments have been put since at least 2017, when we debated the Financial Guidance and Claims Bill. What has happened in the interim has merely strengthened those arguments on the need for a duty of care. During the last year, as in so many other areas of life, we have seen exactly why something in this space would assist. Now that we have the excellent vaccine rollout and inoculation programme, such a duty would put a capital “B” into the “build back better” approach. It would be a real example of “better”.

I will not rehearse the arguments that I made at Second Reading and in Committee. I want to take this opportunity again to thank Macmillan Cancer Support and congratulate it for everything that it continues to do in this area. According to the testimony of a cancer patient,

“I felt I was battling my bank as well as cancer.”

Will the Minister consider what can be done between Report and Third Reading? With the Easter break in between, there is time, so this is more than timely. Can she reassure noble Lords of the potential for movement on this specific point of a duty of care?

My Lords, I shall be very brief. I spoke on this issue at length in Committee. The Government may take note that every single speaker today from across the House has supported the concept of a duty of care and non-exploitation and has urged the Government to act.

In all the speeches, both before today and referenced again today, we have heard about this chain of malfeasance, whether it has been described as scandal or fraud or an abuse of customers. Clearly, the existing legislation does not work, or we would not have this kind of history with new scandals cropping up, sadly, on a regular basis. Like it or not, treating customers fairly is interpreted by both the industry and the regulator as exceedingly light touch, to be offset by the “caveat emptor” principle—the taking of personal responsibility—to which the noble Baroness, Lady Tyler, referred. This is unacceptable. This Government often say that they focus on outcomes. The outcomes have been unacceptable. Look at the outcomes and the chain of scandals. Here is the opportunity to act.

In response, the Minister might say that there are effective tools, such as the senior managers and certification regime. Anyone who has followed the progress of this Bill and the amendments through Committee will have heard how that has broken down. It has, in effect, become something of a busted flush. The Minister might say that scandals have been picked up very early because we have working whistleblowing channels. Again, from listening to the discussion throughout Committee stage, it is clear that this scheme is not working. The analysis in the Gloster report reinforces that.

We do not need a ninth consultation. Every time there is another major scandal, the FCA’s response is to have another consultation. In the end, there is something like a freckle of movement. This issue needs to be seized by the scruff of the neck and resolved before more people suffer injury. The regulator needs to be put on the front foot. By supporting this concept and this amendment or something equivalent to it, the regulator will finally be put on the front foot and the industry will recognise that it has been duly warned and must reconsider the way in which it behaves.

I hope that we shall hear from the Minister that we shall see an equivalent proposal at Third Reading because, if not, I will not hesitate to ask all my colleagues and every Member of your Lordships’ House to support any decision by the noble Lord, Lord Stevenson, to move this to a Division.

My Lords, during our debates on this Bill, we have referred several times to the success of principles-based regulation in this country. We have contrasted it with the more prescriptive regulatory structures introduced within the European Union. The idea of a duty of care is a prime example of principles-based regulation because it presents a principle from which particular actions can be derived. It is now very important, given the financial stresses created by the pandemic to which several noble Lords have referred in their contributions to this debate. This is but one example of the unexpected pressures in the financial system that arise on a regular basis, not least because of the fintech innovations referred to earlier which require a flexible, principles-based approach. The strength of this approach is that is encompasses financial innovation—the changes to which many noble Lords have referred.

I understand that later in the consideration of this Bill the Government will bring forward measures to regulate the “buy now, pay later” market. This would already have been encompassed in a duty of care. It would not have slipped through the gap. If there had been a general duty of care in place, consumers would have received some degree of protection already.

One of the striking things about the issue of a duty of care and the FCA rulebook is that a number of measures that amount to a duty of care exist in the rulebook already. There are “know your customer”, “treating customers fairly” and the consumer credit rules, which require assessment of creditworthiness. What is striking is that this specific list has gaps in it.

Many noble Lords referred to the examples of malfeasance; it is this structure that creates the environment for and encourages malfeasance. It encourages testing of boundaries and of gaps. If there were instead a broad principle it would significantly discourage that persistent, competitive drive to test the gaps that exist in the current list of consumer protection measures in the FCA rulebook.

It is not simply that the lack of a duty of care creates the inability to deal with malfeasance; it actually creates it by the structure it presents for a very competitive market. We all know that this particular structure—having a specific list of something in a legal document—always raises the question of what has been left out. That is exactly the case in the FCA rulebook. It lacks the firm foundation of principle.

In Grand Committee, the noble Baroness, Lady Penn, was quite right to argue in summing up that

“the FCA is already taking steps to ensure that financial services firms exercise due care and regard when offering products, services and advice to consumers.”

She was right that there is a list, but she was quite wrong to then argue that a statutory duty of care

“does not add to the FCA’s existing powers in this area.”—[Official Report, 22/2/21; col. GC 116.]

Of course it does. It must do, in one of the most dynamic industries in the United Kingdom, associated with innovation, change and competition. It is the very nature of successful principles-based regulation that actions should derive from general principles.

The FCA lacks this statutory declaration of general principle. This is why Macmillan Cancer Support’s campaign Banking on Change was necessary, and why it is so important to place a general principle of duty of care on the statute book. My noble friend Lord Stevenson has made a very specific offer to the Minister with respect to Third Reading. I strongly urge her to accept it.

My Lords, I am grateful to the noble Lords who have put forward this amendment, and I appreciate the strength of feeling that exists around this important issue. I also pay tribute to the arguments made in previous stages of this Bill, including in Grand Committee. Noble Lords have spoken passionately about the need to tackle issues of consumer harm that exist in the financial services industry, and I agree that it is essential that this issue is addressed effectively.

The Government are committed to ensuring that financial services consumers are protected and that steps are taken quickly to address issues when they are identified. The noble Lord, Lord Eatwell, argued for a principles-based approach to financial services regulation. That is what is contained in the FCA’s principles for business, which govern financial services firms’ treatment of their customers, as well as the specific requirements in the FCA’s handbook.

I hope noble Lords will not mind if I set out the principles of business, because that will help us in considering the amendment. The principles include:

“A firm must conduct its business with integrity … A firm must conduct its business with due skill, care, and diligence … A firm must pay due regard to the interests of its customers and treat them fairly … A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair, and not misleading … A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client … A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.”

These fundamental principles aim to protect consumers who often have less knowledge and expertise than the firms providing them services.

The FCA has recourse to disciplinary action, including public censure and financial penalties, against firms that breach these principles. These are not hypothetical powers. The FCA has a long history of imposing sanctions on firms that breach the principles. For example, in September 2019 the FCA imposed a penalty of almost £24 million on the Prudential Assurance Company after it breached the principles, including the principle that firms must pay due regard to customers’ interests and treat them fairly.

While the FCA’s principles set the standards of how firms should treat their customers and its enforcement powers allow it to ensure that these are met, it recognises that the level of harm in markets is still too high and is committed to identifying and addressing this. While the coronavirus pandemic has caused the FCA to delay the next stage of this work, it has remained a priority and the FCA has announced that it will publish a consultation in May. This consultation will explore how the FCA could strengthen and clarify firms’ duties to consumers in order to reduce consumer harm. Specifically, the FCA will review its principles and how it applies them in practice, and whether the way in which firms have responded to the principles is sufficient to ensure that consumers have the right protections and get the right outcomes. The FCA expects to announce the next steps following that consultation by the end of the year.

I should also emphasise that the FCA is undertaking extensive work more broadly to ensure that all consumers, including those who are vulnerable, are protected. In February, the FCA published guidance on how firms should treat vulnerable customers to ensure that they are compliant with their obligations under “treating customers fairly”.

I reassure the House that the Government recognise the strength of feeling and agree that it is critical to ensure that consumers are protected. The Government believe that the FCA already has the necessary powers and is acting to ensure that sufficient protections are in place for consumers without the need to impose a duty of care or expand the consumer protection objective. The noble Lord, Lord Sharkey, quoted FCA evidence to the Liaison Committee last week on the effectiveness of the “treating customers fairly” principle of business as a point contrary to this. However, this is exactly the subject of the FCA’s forthcoming consultation.

The noble Lord, Lord Stevenson, asked the Government to look specifically at the wording of proposed new subsection (2) of his amendment and consider how they could take that sentiment forward. To address a couple of those points, the FCA is undertaking extensive work to ensure that all consumers, including those who are vulnerable, are protected. One of the key areas of focus for the FCA’s 2020-21 business plan is to ensure that the most vulnerable are protected. As I said, the FCA has recently published new guidance on how firms can treat vulnerable customers fairly.

On ensuring that firms do not take advantage of behavioural biases, the FCA’s principles of business already include the principles that a firm must conduct its business with integrity and must pay due regard to the interests of customers and treat them fairly. The FCA recognises that behavioural biases and vulnerabilities can drive consumer harm. Therefore, in its 2018 publication Approach to Consumers, the FCA set out its expectation that

“all firms to frame decisions for customers based on real consumer behaviour and not to mislead them or exploit behavioural biases.”

In order to better understand this area, the FCA has undertaken extensive research to identify areas of concern. For example, a research paper published by the FCA in 2020 examines the use of online experiments to create behaviourally informed consumer policy. This has allowed the FCA to better account for how behavioural biases impact its work when introducing rules or remedies to protect consumers. This research has already been applied in numerous areas of FCA policy and has resulted in concrete action against firms which have exploited consumers’ biases and constrained choice. For example, in April 2020 the FCA introduced new rules on overdraft pricing which took into account the fact that complex charging structures and high charges had previously been used to take advantage of consumer bias. These rules include stopping firms charging higher prices for unarranged overdrafts than arranged overdrafts, and requiring banks to do more to identify customers who are showing signs of financial strain.

Let me directly address the accusation that the FCA prioritises its competition objective over consumer protection. The FCA has three operational objectives which have equal standing in legislation: to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers. I reassure noble Lords that the FCA balances these objectives evenly and applies them in concert to achieve the best outcome for consumers. In this sense, the three objectives are interconnected and all contribute to protecting consumers from harm. The FCA’s 2017 mission statement sets out more detail on how these three objectives are applied through decision-making frameworks. It does not believe that the consumer objective can be delivered through competition alone, nor that competition should be prioritised over consumer protection.

The Government will continue to work closely with the FCA to ensure that the concerns raised by this House can be addressed. However, I am afraid that I cannot commit to returning to this issue at Third Reading, so if the noble Lord, Lord Stevenson, wishes to test the will of the House, the time to do so is now. None the less, I hope he may reconsider and instead withdraw his amendment.

My Lords, thank you for a very good debate. It has been a fine example of the way in which Report brings together the arguments made in Committee and allows the House to come to a collective view about the issue in question.

In her customary way, the noble Baroness, Lady Penn, gave a full and considered response, and I thank her for that. She focused more on what she called the strength of feeling in the House and did not really engage with the strength of the argument. I hope that when she reflects on that, she may recognise that that is a bit of a weakness. The arguments are not to be ignored simply because they are expressed strongly. They are to be looked at seriously, because they are trying to attack a pernicious problem that is causing huge consumer detriment, as exemplified in the many speeches we have heard today, particularly from those who have worked in the industry for a number of years. The noble Baroness, Lady Altmann, and others gave examples that were redolent of the experience of trying to make the system work.

I think the Minister also accepted in her speech that the Government want regulatory structure to protect consumers and said that the level of harm was perhaps too high. In explaining how the FCA’s three objectives are expected to operate—which must be a logical mess, when you analyse them—she illustrated why my noble friend Lord Eatwell and others wish that we had a better, principle-based and less list-based structure for the way in which the regulators carry out their work. As the noble Lord, Lord Sharkey, put it—he could not have put it more simply—FiSMA does not protect consumers, malfeasance is flourishing and may even be encouraged by the current structure, and redress is patchy, lengthy and not really available to those who need it most.

The issue before the House, therefore, is whether the existing process and procedures, the existing wording which sets them out and the existing objectives, which are constraining what the FCA can and cannot do, are the best we can get to. The arguments that have been made, particularly the devastating figures from the ombudsman’s service, suggest that we are not in a good place on this. This was picked up by many speakers, including the noble Baronesses, Lady Tyler and Lady Kramer.

In the context of the need for better financial well-being as we recover from the pandemic and the chance to do things better, are we really saying that the best we can come up with is to wait for another consultation, which will probably just be another exercise in playing catch-up and result in a longer list of rules and requirements? Why do we not just set a very high tide mark for what we expect our regulators to do and, if the consultation proves the case, reduce the requirements where that is proportionate and appropriate?

I do not understand why the Minister felt unable to take the issue away, talk about it and come back at Third Reading. She challenged us to put our views to the House. I would therefore like to test the opinion of the House in this matter.

I shall now put the Question. We have heard a Member taking part remotely say that they wish to divide the House in support of this amendment, and I will take that into account. The Question is that Amendment 1 be agreed to.

We now move to the group consisting of Amendment 2. Anyone wishing to press this amendment to a Division must make that clear in debate.

Amendment 2

Moved by

2: After Clause 5, insert the following new Clause—

“Periodic independent review of regulators

(1) The Financial Services and Markets Act 2000 is amended as follows.(2) After section 1S (reviews) insert—“1SA Periodic independent review of regulators(1) The Treasury must appoint a group of at least three independent persons to conduct a periodic general review of the effectiveness of—(a) the Financial Conduct Authority,(b) the Prudential Regulation Authority, (c) the Bank of England in respect of its functions under Parts 1 and 5 of the Banking Act 2009 (bank resolution and payment systems) and Part 2 of the Financial Services Act 2012 (recognised clearing houses), and(d) the Payment Systems Regulator.(2) The general review must take place every two to three years and must include a review of—(a) internal operations and controls;(b) systems for responding to whistleblowers, parliamentary correspondence and reports, and public concerns;(c) regulatory perimeters;(d) the effectiveness of rules and the regulatory burden;(e) whether all statutory and public policy objectives have been met;(f) the operation and effectiveness of engagement practices before and during rule making;(g) the skills base of staff;(h) any other matter the independent persons consider relevant;(i) follow up from the previous review and any other intervening review under this Act;(j) any other matter requested by the Treasury or a relevant Committee of the House of Commons or House of Lords.(3) On completion of the review, the persons conducting it must make a written report to the Treasury—(a) setting out the result of the review, and(b) making such recommendations (if any) as the persons consider appropriate.(4) A copy of the report must be—(a) laid before Parliament, and(b) published in such manner as the Treasury considers appropriate.”(3) In section 1T (right to obtain documents and information) after “1S” insert “or 1SA”.”

My Lords, this amendment is an evolution of the amendment I tabled in Committee and called the “Skilled person review of the regulators”. I thank the noble Lord, Lord Sikka, for adding his name on Report.

Since Committee, I have received growing expressions of interest in the concept as an important process for improving financial services regulation—indeed, one that could be replicated for other systemic regulators. My purpose in tabling the amendment here is further exploration. I have reframed the amendment to be an independent person’s review via a new Section 1S(a) in FSMA that broadly follows the format and definitions already contained in Section 1S. Under the section, the Treasury can establish an independent person review of the FCA. However, it has not been deployed as a routine matter, but rather to deal ad hoc with specific instances, as have reviews under Section 77. My proposed new Section 1S(a) would provide for general review by at least three independent persons and would take place after every two to three years. That period has been chosen so that it can reflect when there are changes in appointments of the regulators. It also broadly reflects the two-year cycle envisaged in Australia for its financial regulator oversight board and the EU’s three-yearly reviews of the ESAs. Today, the ABI circulated a note supporting the idea, but it thinks that a longer period might be better, as indeed I first proposed.

I have also added to the list of regulators which are to be subject to the review to cover not only the PRA and the FCA, but the Bank of England for its other regulatory functions and the Payment Systems Regulator. I did that on the suggestion of UK Finance, which has also taken an interest in my amendment as potentially filling in a gap in accountability. It has argued in response to the Treasury’s framework review consultation that covering all banking and finance regulators is needed for a coherent and consistent approach to the whole sector while structural changes are breaking down the distinctions within it. I thought that a fair point and have included it as food for thought.

The list of issues for review are largely taken from the matters found to be at fault in the Gloster report, such as internal operations and controls, responding to whistleblowers, regulatory perimeter and the skills of staff. It also covers the effectiveness of rules and regulatory burdens, which it is important to study periodically as a check. But it is important to note that I do not propose some kind of routine second-guessing on rules as they are made, but more like an impact assessment after they have bedded in.

A long list may not be needed and could perhaps be left to the independent person to prioritise, but one other addition I have made is to follow up on any other intervening review. The amendment also provides a similar right to information and documents, as a Section 1S review would have, by adding proposed new Section 1S(a) to the existing provision in Section 1T of FSMA.

In the clauses that immediately precede this amendment, the PRA and FCA are each given the power to make all the policy and rules for financial services save for the broad public interest objectives and “have regard to” measures defined in FSMA. The way that that is done front-runs the conclusion of the future regulatory framework consultations, and I see two consequences. One, which is conceded in the Government’s consultation, is that Parliament will want to undertake additional scrutiny. We will deal with that in later amendments and it is urgent. A second consequence is that we are conferring a lot more power on our regulators, one of which has been the subject of a flow of negative findings. This amendment is not intended to address the first consequence or to diminish in any way the constitutional position of Parliament regarding scrutiny—far from it: it is meant to address the second consequence. It also replaces some of the scrutiny of the EU which included three-yearly reviews of the European supervisory authorities.

With the present ad hoc reviews being a failure, the regulator may or may not reform itself adequately; we just have to hope that it does. That is what Dame Elizabeth Gloster said to the Treasury Select Committee. She also said that she was not a management consultant who could implement those changes. Regrettably, I do not think that the Treasury Select Committee or other committees of Parliament are in that position either. No matter how frequently the regulators may produce reports on their activities or senior executives appear before committees, does Parliament have the capacity to do the type of inspection that is gained in an independent review? If it can, why do we keep needing to have ad hoc reviews?

The parliamentary system may work well for the scrutiny of rules against policy objectives and for pointing out where review into failure is needed, but it is harder for it to look systematically at what goes on in terms of operations and controls, the skills base of staff or how well change management has been brought about. For that, the word of the chair and the executives has to be taken. In all earnestness, I am sure that they believe that they have done a good job and will not say otherwise, but in business, the value of outside eyes is well known, and the regulators also use that in supervision. That is where there is a gap that regular, independent reviews can fill. If the basic concept is accepted, it could indeed be done in other ways, but what is needed is the will to review for quality control and not just after a fault is known.

Before I finish, and because this is the first amendment on Report that deals with oversight arrangements, I will reference briefly, as others may, that since Committee we have had letters from the regulators that lay out broadly how they see accountability at present. The content is somewhat disappointing, given that the debates and suggestions made in Parliament have hardly been secret. I would say that it is unbalanced for the Government and the regulators to grab front-running positions in which constitutional power is removed from Parliament, for that is what removing this layer of statutory instrument does, and not pledge simultaneously to restore equivalent constitutional rights.

Although financial regulation, supervisory processes and oversight have been worked through on previous occasions, they do not yet work or are not yet being worked so as to keep things up to scratch. Having regular, independent reviews can fill that gap and have a place within the future regulatory framework. I beg to move.

My Lords, the issue I want to highlight, as I did at earlier stages, is how to make regulators more accountable, given the well-established phenomenon of regulatory capture. Regulatory capture is where an industry regulator like the FCA and the other bodies mentioned in the amendment comes to be dominated by the industry that it is charged with regulating. The result is that the agency, which is meant to act in the public interest, works instead in ways that benefit the industry.

I do not think that there is any doubt that this happens, and the question is: what do we do about it? The important point to understand is that this does not happen because of inadequate, ineffective or corrupt individuals—rather, it happens because it is systemic. It is an institutional rather than an individual problem. There are various reasons for why it happens. First, a regulated industry has a keen and immediate interest in influencing the regulator, whereas customers are less motivated. They have normal lives to lead and they engage with the industry only for brief periods. However, participants in the industry are there all the time. Secondly, industries tend to devote large budgets to influencing the regulator, which inevitably has an impact. Lastly, there is the aspect of the whole industry community. People tend to move from the regulator to the industry and back to the regulator. That is bound to have some impact on the personal relationships that are established.

There is therefore no question that the phenomenon exists. How bad it gets and what we do about it is what we need to address. The first step is to acknowledge the problem and to recognise and address the challenge. The next step is to make the regulators as accountable as possible, which poses the question: who regulates the regulators? There are many ways to do that but we have before us in Amendment 2 a proposal for a periodic, independent review of the regulators.

What I have in mind is something akin to a school inspection, which does not happen because a school has demonstrated problems but is just part and parcel of a regular process that focuses the minds of all those involved. At the moment, regulating the regulators is effectively left to the Government whenever they care to turn their minds to the issue. The problem is that Governments have many other things to think about and the result is that addressing the problem tends to happen only after it has arisen. The public become aware that there is some deficiency in the regulator and therefore action has to be taken. How much better it would be to pose questions as to how the system can be improved before we encounter the problems. That happens only under a regular, independent review, as proposed under the terms of the amendment.

My Lords, this is the first time that I have spoken on the Bill on Report and I draw the attention of the House to my interests as set out in the register—in particular, shares that I hold in listed financial services companies.

I have considerable sympathy for the amendment because the financial regulators are not very accountable. At the moment, there are set-piece appearances before the Treasury Select Committee in the other place and occasional appearances before committees of your Lordships’ House but these do not amount to a systematic and comprehensive examination. The Government often rely on the fact that annual reports are laid before Parliament but the annual reports of regulators get no more attention paid to them than the annual reports of companies. With rare exceptions, they provide few insights of value. By their very nature, annual reports accentuate the positive and shy away from the negative.

The problem of the accountability of regulators is not confined to financial services regulators. I could say much the same about Ofcom, Ofgem and other regulators, but we cannot solve the problems of the world in this Bill. The accountability of the PRA and the FCA is covered in the future regulatory framework, the consultation that has recently been completed. We discussed this a little on our first day in Committee and I hope that my noble friend the Minister will provide some information on the next steps when he responds to the amendment. The consultation closed over a month ago and the Treasury must have some idea on what it will be doing next and when.

If the outcome of that review, so far as accountability is concerned, is a well-developed form of parliamentary scrutiny, either jointly between both Houses of Parliament or within each House, the need for an independent review clause such as that contained in Amendment 2 would recede. Parliamentary committees can look at issues in depth but only if they are properly focused and well resourced. On that basis, the noble Baroness, Lady Bowles of Berkhamsted, might want to await the legislation implementing the outcome of that review rather than tackle the issue in this legislation, because action could be set in a broader, more holistic context regarding how the regulators will operate overall in due course.

If the noble Baroness, Lady Bowles, wishes to pursue her amendment—I thought I heard her say that it was more of a probing amendment for today—it would be wise to look again at its drafting because it calls for one review covering four regulators, but they are all different in what they do and how they do it. I am not convinced that there would be sufficient focus if one review tried to cover all the regulators—the two major ones and the two smaller units with regulatory responsibilities, one in the Bank of England and the other being the Payment Systems Regulator in the FCA.

In addition, I, like the ABI, wonder whether a review every two or three years is too frequent for the kind of in-depth review that the noble Baroness, Lady Bowles, has in mind. A rolling series of reviews, perhaps carried out over five years but concentrating on individual regulators, would provide more information of value to those seeking to hold them to account. However, the noble Baroness, Lady Bowles, has the right ideas in the amendment, although it may not be right for this Bill.