Thursday 24 June 2021
The Grand Committee met in a hybrid proceeding.
Arrangement of Business
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person while others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
Global Human Rights Sanctions Regulations 2020
Question for Short Debate
My Lords, I warmly thank all those noble Lords taking part in today’s debate.
The passage into law of the Global Human Rights Sanctions Regulations 2020, usually referred to as the Magnitsky Act, was welcomed by all parties. It was a bold affirmation of the values that we hold in common with other democracies that have enacted similar legislation. At a time of intensified geopolitical contest between democracy and authoritarianism, the Magnitsky Act underlines our readiness to sanction powerful figures in authoritarian regimes who abuse state power in pursuit of personal enrichment.
However, the credibility of such sanctions depends crucially on our willingness to apply them without fear or favour, whenever and wherever gross abuses of state power occur. If Magnitsky sanctions were perceived beyond our shores as penalties that we confined to Russian oligarchs, Chinese intelligence officers and Burmese generals, they would soon lose their power to deter unacceptable behaviours in the wider world. So I should like to take the opportunity today to draw noble Lords’ attention to an example of where our failure to contemplate imposing Magnitsky sanctions could render us vulnerable to the charge of double standards. The case that I will describe, on which I have corresponded with Ministers for eight years, arises not from a hostile state but from one with which this country enjoys cordial relations: Dubai in the United Arab Emirates, which I have visited many times.
Mr Ryan Cornelius is a British national. He has had his assets seized in state-enabled corruption. He has been tortured and imprisoned after a grossly flawed legal process. Ryan is a British businessman. In Saudi Arabia, he built the largest precision tunnelling company in the Middle East from scratch. From Bahrain, where he settled in the late 1990s, he went on to launch a range of ambitious construction ventures across the region. One of them, undertaken with several partners, was a major residential and leisure complex in a prime location in Dubai called the Plantation.
When the global financial crisis struck in late 2007, the investment company that was funding most of Ryan’s ventures told him that its line of credit from the Dubai Islamic Bank had been called in abruptly. The investment company was able to negotiate a restructuring agreement to repay its loan, which totalled some $500 million, over three years. However, the Dubai Islamic Bank made it a condition of signing that Ryan should stand as a guarantor of the agreement and pledge his business and personal assets as collateral. Ryan had little choice but to agree, but in any case his assets were comfortably worth more than the loan. The Plantation alone had recently been valued at over $1 billion by two leading international assessors.
Shortly after the agreement was signed, Dubai Islamic Bank’s chairman was removed and replaced by the man who remains its chairman today, Mr Mohammed al-Shaibani. Mr Shaibani is also chief executive of the ruler’s court, a position that gives him direct oversight of every arm of government, including the security police and the financial audit department. Mr Shaibani is also chairman of Nakheel, Dubai’s largest property developer.
In May 2008, the repayment of the loan was proceeding ahead of schedule when Ryan was arrested at Dubai airport. He had a hood placed over his head, his hands were bound with zip ties and he was taken to a windowless room at Dubai police headquarters. After a hostile interrogation, he was given a statement in Arabic that he could not read, and told that if he signed it then he would be free to return to Bahrain. Instead, he was taken to a cell and held in solitary confinement for over six weeks.
Ryan’s partners were also arrested and held in solitary confinement. While he was there and unable to communicate with the outside world, Dubai Islamic Bank served 15 days’ notice of foreclosure and then took possession of the Plantation. Over the following months, his other businesses were either seized or forced into liquidation, and over the following years his personal assets were seized one by one, including, finally, his London home, leaving his wife and family homeless.
Ryan and his fellow defendants were held for two years before being brought to trial for fraud and money laundering. No translator was provided, and Ryan was unable to follow proceedings, but the judge announced at the end of the trial that he was unable to convict the defendants on the basis of the evidence presented. Ryan was not released, although by then he had been held for longer than the maximum sentence he would have received for a fraud conviction. A second trial was held in front of a new judge with different charges.
The prosecutor now charged that the unpaid balance of Dubai Islamic Bank’s loan amounted to theft from the state: a charge which required the bank to be reclassified as a state entity. The collateral that it had seized, including the Plantation, was dismissed as worthless. The new judge duly convicted Ryan and the other defendants and sentenced them to 10 years in prison. The judge also ordered them to pay $500 million to Dubai Islamic Bank and an additional fine of $500 million. Dubai Islamic Bank’s published accounts show no trace of the loss alleged by the prosecution. In a letter to the Central Bank of the UAE, in September 2008, Dubai Islamic Bank confirmed that the seized collateral exceeded the value of its loan.
The seizure of the Plantation, the imprisonment and the imposition of unrepayable financial sanctions is a typical criminal corporate raid, which cloaks thuggery in a veneer of judicial process to seize assets and force the victim into a hopeless position. State officials were the initiators, enablers and beneficiaries of the raid. This was corruption of the highest order.
Ryan served his 10 years in full, denied the statutory 25% reduction for good behaviour. But instead of being released in 2018, he and his former business partner were taken without notice to a judge’s office and informed that Dubai Islamic Bank had asked for their sentence to be extended by a further 20 years. It did so under a law which was enacted after their imprisonment and well after the alleged offence. That additional sentence of 20 years offends every basic principle of the rule of law. That sentence is itself unlawful and an affront to justice.
Ryan sought to appeal the new sentence but was told that he did not have the right to issue power of attorney to a lawyer. He decided to represent himself. On the day scheduled for the appeal hearing, Ryan was told that his name was not on the passenger list for the prison bus to the court. The judge then dismissed his appeal on the grounds that Ryan had not bothered to attend.
Ryan is now 67 years old. He will be 85 when his new sentence is complete. Two years ago, he tested positive for tuberculosis after a prisoner in an adjacent cell collapsed with the disease. It took 18 months before the prison authorities allowed him to receive medication. Ryan’s health has deteriorated alarmingly. A recently released fellow inmate testifies that he is kept in freezing conditions, with no bedding and subject to constant sleep deprivation. These conditions are cruel, degrading and inhuman; they amount to torture.
The powerful man keeping him in prison is no stranger to this country. In his High Court judgment of December 2019, Sir Andrew McFarlane found that Mohammed Al Shaibani had been present when the ruler’s daughter, Princess Shamsa, was abducted from the streets of Cambridge, drugged and taken to France against her will. Princess Latifa, another daughter whose bid for freedom ended in recapture, provided detailed audio testimony to a human rights organisation that she was threatened and coerced by Mohammed Shaibani on numerous occasions to make false statements to the British courts.
The extent of Shaibani’s personal determination to keep Ryan in captivity was made brutally clear by his response to a ruling by the Bahrain courts last year. Dubai Islamic Bank had launched civil proceedings in Bahrain against Ryan and his former business partner a year after their arrest to seize any residual assets there. The trial dragged on for 11 years, involved the appointment of numerous court experts and culminated in the Bahrain Chamber for Dispute Resolution. The verdict by a panel of three judges found last year that Ryan and his ex-partner owed no money to Dubai Islamic Bank and that collateral and payments made to the bank exceeded their loan by over $70 million. The chamber’s website states that its judgments are final and unappealable. It is clear from private testimony that Mohammed Shaibani intervened personally with the Bahrain authorities following publication of the verdict. Four months later, after a brief hearing, a judgment deemed unappealable was reversed.
Mr Shaibani has numerous other victims beyond Ryan, including his former business partner, and there are doubtless numerous Shaibanis in many jurisdictions. Failure to act on our part will confirm to them that they can continue to destroy lives, as Ryan’s has been destroyed, with impunity. This will only make life more hazardous for the British nationals on whose efforts overseas this country’s future prosperity depends.
My Lords, I congratulate the noble Lord, Lord Clement-Jones, on his initiative and on raising that rather alarming case. Perhaps it is a little early after one year, but it is surely right to review the operation of the regulations. I shall make three brief points in my three minutes.
First, I would welcome comment from the Government on the effectiveness of consultation between allies and the exchanges of information relating to the listing of individuals, on the extent to which the Government are prepared to listen to non-governmental organisations with expertise in this area, and on whether they are satisfied with the transparency of proceedings. Clearly, there is merit in examining, after one year, what is happening; there is merit, too, in yet again congratulating Bill Browder on the remarkable campaigns that he has led in the US, in Canada, in the Baltic countries and in the European Union and other international organisations —I am glad that Bill is on our side. I accept that lists need not be identical, but there is surely merit in co-ordination.
Secondly, I am puzzled by the fact that no serious Iranian officials have been listed. Surely there is a strong case for listing, for example, the individual responsible for shooting down the Ukrainian airliner or the individuals responsible for putting down the demonstrations in Iran in 2019. Is this for prudential reasons? Perhaps that is the only explanation that can be given for the Government’s approach to the Dubai individual mentioned by the noble Lord, Lord Clement-Jones.
My third observation is this: what does “effectiveness” mean in this context? How can it be measured, for example, in respect of individuals? In most cases, asset freezes and visa bans would not impact directly on the individuals who were responsible for torture. I think, for example, of the case of Sergei Magnitsky himself; one is concerned with listing not the individuals who carried out the torture in prison but those individuals further up the chain who were responsible for his treatment. It is unlikely that the small fry would have assets in the UK or would want to visit the UK. In my judgment, it is important to pass a clear message that these people are not welcome in the UK and other friendly countries and cannot salt their money away in our financial institutions.
My Lords, none of us has much time to say a great deal, but since I suspect that we are largely in agreement, across all parties and none, that the Magnitsky sanctions—in this jurisdiction now wrapped up in the Global Human Rights Sanctions Regulations—are a good thing, that may not matter.
I congratulate the noble Lord, Lord Clement-Jones, on drawing the case that he mentioned to our attention and on opening this debate so powerfully. It is important that the United Kingdom, no matter what our internal political differences and economic troubles may be, must never avoid imposing sanctions on individuals and Governments on grounds of mere expedience. The noble Lord, Lord Anderson, was right to mention Iran and the other matters that he drew to our attention.
I accept that any British Government’s foreign policy, which guides our Ministers, diplomats and international negotiators and thus affects the conduct of diplomacy, will need to anticipate and react to events outside our control. Whereas the conduct of government may be different in different countries, the need to abide by acceptable standards of conduct that do not ignore the rule of law or internationally accepted human rights cannot be compromised, must always be respected and is a universal requirement.
The torture of political prisoners in large, powerful countries, for example, needs to be responded to just as much as torture carried out in economically and militarily weak countries. The fact that we do or could sell more goods or services to a large country than a small one, while a superficially attractive reason and justifiable as realistic and nationally self-interested, to say and do nothing about the appalling behaviour of a large country’s leaders is, in the end, counterproductive and as morally acceptable as it would have been 200 years ago to prolong the slave trade.
Human rights abusers tend to be kleptocrats who thrive on the pain, suffering and stolen assets of the less powerful or politically inconvenient. If they use their ill-gotten gains and the laundered proceeds of crime to fill bank accounts or buy property here, we should recover those assets, tell the world that we have done so and return them to the victims of those crimes.
With these regulations, we now have the means to deter human rights abuses; it is Parliament’s job to ensure that this and any successor Government have the will to do so. I congratulate the Government on what they have done so far, but there is, in my view, a great deal more yet to do.
Like all noble Lords and everyone concerned to do something about human rights violations and corruption, I strongly support the Magnitsky-style sanctions. Rather than simply condemning wrongdoing with words, they bring home to perpetrators the consequence of their actions. They also have the advantage that a whole population does not have to suffer, and they allow for the necessary political relationships to continue, even with odious regimes. But how effective have these sanctions been? This is why the Motion in the name of the noble Lord, Lord Clement-Jones, is so welcome.
I recognise that the legislation on these sanctions is relatively recent and that sanctions take some time to really have an effect, but I very much hope that the Minister will be able to provide some indication of their effectiveness. It is difficult to find out from other sources what their impact has been and whether they are indeed having any real effect. Obviously, we hope that, first, those guilty of human rights abuses or gross corruption will desist from any more criminal activity. We also hope that such sanctions will prove a deterrent to other potential abusers of rights or those engaged in corrupt financial practices. These are the real goals; indeed, they are the justifying purpose of such sanctions in the first place.
I recognise that answering the question of the effectiveness of sanctions in relation to those two purposes is obviously very difficult. However, it may be that the Minister is able at least to indicate how the sanctions are working in practice: has the freezing of bank accounts, for example, been effective in the sense that it has been done in a way that has stopped the person finding a way of transferring much of the money out of the account just before it was closed? Criminals have an army of people trying to find a way around any legislation that hampers their activities. Regarding the refusal of travel visas, I wonder how many people listed for sanctions have tried to enter the UK and have been turned back or have applied for visas and been refused them.
I believe that particular attention needs to be paid to tax havens, where so much laundered money ends up. Those in such havens are only too anxious not to disturb the status quo from which so much money is made. It would be good to know how co-operative tax havens have been in the implementation of the sanctions.
Similarly, in relation to Saudi Arabia and those responsible for the death of Jamal Khashoggi, we cannot expect much co-operation from the Governments of Russia, Myanmar and North Korea, but we have a right to expect full co-operation with an important trading partner like Saudi Arabia. Is this forthcoming?
My Lords, I too agree that there are occasions when these Magnitsky sanctions may be the best available option to us. However, the increased use of such sanctions is a worrying sign that the organs of international arbitration such as the UN or the ICJ may be losing their effectiveness. These were the very institutions established in response to the tit-for-tat foreign policy that defined the 19th and early 20th centuries, with all their resulting catastrophes.
Our Government are a big advocate of the concept of “Global Britain”, an ambiguous phrase that sometimes means leading as a force for good in the world but at other times is simply a declaration that Britain is open for international business. My concern is that these conflicting visions of global Britain are sometimes mutually exclusive, and that when dealing with human rights abuses there may be a tendency to take the route of least domestic economic disruption.
Magnitsky can even play into this tendency, allowing us to feel that we have acted morally without incurring any costs and often failing to improve the situation. For example, I am not aware of any evidence that the sanctions placed on Chinese officials linked to Uighur human rights abuses have improved the situation in Xinjiang province. Our annual £80 billion total trade with China remains undisrupted. Harsher sanctions were placed on Belarus for the forced landing of a flight and subsequent arrest of a journalist—compared to China’s systematic programme of sterilisation, detention and re-education of the Muslim Uighurs. It is not insignificant that Belarus accounts for less than 0.1% of UK trade, compared to 6.8% for China. Is it not time for the Government to be honest and admit that the pursuit of global trade and investment opportunities can sometimes clash with their obligation to protect human rights? In other words, when it comes to global Britain, the Government cannot have their cake and eat it too.
Magnitsky sanctions will remain a useful tool, but I believe that they should be used selectively. If they are to be really effective, we need to work with allies continually, monitoring the effectiveness of these sanctions and ensuring that they are both based on transparent and objective criteria and applied absolutely thoroughly, not simply when it suits our economic interests. At the same time, the Government must do all they can to reboot the ICJ and support international law, backed up by all sanctions available to us.
My Lords, I too thank the noble Lord, Lord Clement-Jones, for securing this helpful debate.
I accept that this human rights sanctions regime marks a major positive step in our ability to identify and punish human rights violators. Along with the more powerful US Global Magnitsky Act, it amounts to an ability to cut off those targeted from two of the most important financial systems in the world. Dominic Raab rightly described it as having the potential to prevent human rights violators from being
“able to launder … blood money in this country”.—[Official Report, Commons, 6/7/20; col. 663.]
It is the role of your Lordships’ House continually to remind the Government of this potential and to point out where, against that ambition, more needs to be done.
I agree with the advocacy of other noble Lords, particularly my noble friend Lord Collins of Highbury, who argue that obvious human rights violators from Xinjiang, Myanmar and Belarus, for example, should be added to the list of those punished by these sanctions. Otherwise, human rights violators will be able to launder blood money in this country.
However, my main point is that these measures are less effective than they could be in respect of those targeted by them already. They were announced on 6 July 2020. Within days, parliamentarians and anti-corruption campaigners, drawing on research by openDemocracy, were warning that their full potential would be impeded by known and unaddressed deficiencies in the existing anti-money laundering regulations on which they rely.
Data from openDemocracy revealed that the UK’s AML systems were insufficient to prevent financial crime in the UK, and have enabled around 400,000 companies to evade declaring their “persons of significant control” and thus concealing their ownership structures. Those involved in illicit activities can structure their companies to take advantage of the 25% PSC ownership threshold to avoid declaring their interest at all. At the same time, others rely on a reported lack of enforcement of the requirement to disclose their PSCs.
So, while the Magnitsky laws are a useful power in the fight against human rights abuses, if the system that supports them allows beneficial owners to maintain their anonymity, the sanctions in many cases will be of no effect. An upgrade of the UK’s AML regime to ensure transparency and to prevent those engaged in illicit activities from exploiting this weakness in the UK’s system is required and long overdue.
I am aware that a review of anti-money laundering legislation is being carried out as part of the Economic Crime Plan 2019-2022. Specifically, actions 42, 43 and 44 of the plan are about transparency of ownership. To what extent will those actions address these specific criticisms? My sense is that they will not. Was this a deliberate omission, and if so, are the Government content to allow the problems identified to persist?
My Lords, I thank the noble Lord, Lord Clement-Jones, for securing this important debate and for raising the shocking case that he outlined. I also pay tribute to Sergei Magnitsky, who was murdered in a squalid Russian prison cell 12 years ago. He was a brave and incorruptible accountant and lawyer who was targeted and eventually killed because he exposed a huge tax fraud involving senior Russian government officials. He had been hired on behalf of the human rights campaigner William—or Bill—Browder, to whom I pay tribute for leading a campaign that has resulted in Magnitsky legislation being passed in countries around the world.
There is no doubt that London is one of the main destinations for money looted in Russia and elsewhere. According to a 2016 report by the House of Commons Home Affairs Committee, £100 billion is laundered through the UK’s banks each year. Four years ago, I introduced in the Commons a Bill to introduce Magnitsky sanctions in the UK, and I am very pleased that the Government, led by the Foreign Secretary on this issue, have taken action since. However, today I will raise two shocking incidents.
The first is Lukashenko bringing down a passenger plane to kidnap a leading opposition journalist, Roman Protasevich, and the second is the poisoning and arrest of Alexei Navalny in Russia. Both of these incidents caused shock and outrage when they happened and everybody demanded some type of reaction, but here we are, months later, and the shock and outrage has diminished to indifference. In looking at what we could do, it has become clear to me and many others that Magnitsky sanctions are a tool that work but only when they are applied to the right people. In the cases of both Lukashenko and Putin, Magnitsky sanctions need to be applied to those who have provided financial support to these regimes. Before he returned to Russia, Alexei Navalny published a list of people he thought should be sanctioned if anything were to happen to him, and I ask the Minister today to set out what assessment the Government have made of that.
The Belarusian opposition have also made it very clear that a group of financiers should likewise be sanctioned for their involvement and support for the regime. The opposition has named Mikhail Gutseriev as one of the regime’s key financiers, yet he has not been sanctioned by the UK despite the fact that he is on the EU sanctions list, and the European Union is usually much more timid than we are in these situations. This omission is also a huge missed opportunity because Gutseriev has significant property holdings here in the UK. Can the Minister set out today what assessment the Government have made of the case for sanctioning him?
My Lords, I agree with the principle of Magnitsky sanctions but have concerns about the implementation. Why? First, we need to remember the vast difference between war crimes and human rights. The European Convention on Human Rights, upon which the British Human Rights Act is based, is wholly inappropriate for application in combat and battlefield conditions. The law that should operate in such circumstances is the law of armed conflict, otherwise known as international humanitarian law.
Secondly, on the evidence, I listened with care to the noble Lord introducing the debate today, and it was a classic case of reliable evidence from known sources over a long time. However, that is not always the case. My understanding of the basic tenet of criminal law—I am not a lawyer—is that you have to know the identity of your accuser, the explicit detail of the evidence and the source of that evidence. That was relayed today, but that has not always been the case.
Thirdly, on imposing sanctions, I looked at some research work that has been done—there is a fair amount of it. The indication is that somewhere between 5% and, at the most, 30% of sanctions result in a desired change, so they have to be seen as a tool of last resort, one to be used when all other tools in the diplomatic toolbox have proved ineffective. I question whether sanctions should ever be used against democracies. Moreover, they are far more likely to affect ordinary citizens than any leader or any other individual being targeted. At a time when we in this country are talking about global Britain and look forward to forging new partnerships in the backdrop of Brexit, we should not rely on sanctions as a tool.
Finally, we should make sure that our own stable is clean. Three years ago, I read the report—and I have it here—from the UK Parliament’s Intelligence and Security Committee, published in June 2018, entitled Detainee Mistreatment and Rendition: 2001-2010. Frankly, I am shocked and appalled that my country should not only condone torture and extensive mistreatment of prisoners but actually in certain cases instigate it. To me as a senior politician with 47 years in Parliament, whatever the threats may be, such practices are totally unacceptable.
My Lords, I declare an interest as the director of the International Bar Association’s Human Rights Institute, which has advocated strongly for the use of targeted sanctions in appropriate cases. A key piece of our work in recent years has been the administration of a programme on media freedom around the world. It is supported by UNESCO, was led into existence by the United Kingdom and Canada, and now has 47 countries pledged in support. Last year, we produced a report on targeted sanctions, and I recommend it to all noble Lords; it is available through the International Bar Association website. The report is from a high-level panel of lawyers from around the world, chaired by our own former President of the Supreme Court, the noble and learned Lord, Lord Neuberger. The report is a product of their work, but it was drafted and the key work was done by Amal Clooney, a distinguished international lawyer.
There are a number of things that I would suggest we have to urge on our Government at this point in time, to strengthen and make more effective a regime that was brought into existence by the UK. Our Government should ensure that sanctions should be applied to non-state actors, including companies. States should ensure that sanctions can be applied to secondary participants; that is part of the Magnitsky regime. But it has to be recognised that some people can be complicit in abuses, even if they are not the direct abusers or those who ordered the abuse; those who are complicit can often be the funders, financiers, and people who do business with people like Lukashenko in Belarus. It defies my understanding why someone like Mr Gutseriev, who lives in Belgravia and is a sort of expat Russian who supports the Belarus regime financially and whose son does business with Lukashenko’s son, is not on our list—he should be on our list, as he is on the European Union’s list for targeted sanctions.
The third thing that I would urge on the Government in reviewing their use of sanctions is that it should be able to be applied to our own nationals. Some people acquire passports and are here, but they are complicit and involved in terrible abuses of human rights internationally.
States should provide a role for an expert committee—that was one of the recommendations that we made. There should be an expert committee independent of the executive branch of government in determining targets for sanctions—it could include retired judges. It is important that there is more transparency and that we can understand what the criteria are for the targeted sanctions.
We would also advise that a co-ordination committee should be established between key partners such as the United States, Canada and the European Union. Quite often, we seem to be targeting different people. For example, Carrie Lam is not being targeted by us—and look what has just happened in Hong Kong—yet she is targeted by the United States.
Yes, I am just going to draw to a close.
We must be concerned about what happens to journalists, and we should be prepared to sanction those who are interfering with media freedom, which is happening in too many parts of the world, where they close down the internet or go after editors and journalists. Our country should make a commitment to protecting them through targeted sanctions.
My Lords, I, too, thank the noble Lord, Lord Clement-Jones, for leading this debate, because the Magnitsky sanctions are an incredibly important tool for democracies, and the story he told about Ryan is heartbreaking. I do hope that Mohammed Shaibani faces penalties of some sort at some point. The penalties are a deterrent but, for the deterrent to work, they must be applied without fear or favour. That is where I think the sanctions perhaps fall down. The right reverend Prelate the Bishop of St Albans was absolutely right to say that sanctions have shortcomings, but they are a tool that we can use to show just how much we care about human rights and issues of democracy.
The issue that I should like to raise with the Minister is that of how Hong Kong has abused the pro-democracy newspaper, the last one existing, Apple Daily. The Government froze its assets and it has had to close. It was interesting that the people of Hong Kong massively supported the newspaper. It normally prints 80,000 copies; on the day that it closed, it had to print 1 million to keep up with demand. That is how much the people of Hong Kong wanted it to survive.
The Government closed it because, they said, it had gone against the national security Act. It came into force in 2020, but the Government said that it had printed some stories back in 2019 which were illegal. When the Government brought in the national security Act, they said that it would not be retrospective, but here, apparently, it is. I would argue that the Government have committed an illegal act, and it is time for sanctions against Hong Kong.
What plans do the Government have to start implementing sanctions more widely, including over Hong Kong? What are the problems with placing such sanctions on every human rights abuser? I really do not want to hear that it is politics, because that is not a good answer. What is the process? How quickly can the Government impose sanctions after a human rights abuser has been identified? Quite honestly, if we do not make a stand in some of these cases, we look out of step with our allies and other democracies. It is time that we were a little braver about this and actually believed in democracy.
My Lords, I, too, thank the noble Lord, Lord Clement-Jones.
Why have London-based companies not been prosecuted for aiding and abetting corruption by former South African President Zuma and his corrupt business cronies the Gupta brothers, Ajay, Atul and Rajesh? Why have UK and US sanctions against the Gupta brothers and Salim Essa not yet yielded results? I first asked the Chancellor in September 2017 to take action, so why have HSBC, Standard Chartered and Baroda—all global banks based in London and functioning under UK laws and regulations—still not been prosecuted for facilitating gigantic money laundering by the Zuma family and the Gupta brothers?
As Paul Holden from Shadow World Investigations demonstrated to the commission of inquiry into state capture under Deputy Chief Justice Zondo, millions went via British banks and into the vast laundromat operated by Altaf Khanani, now under investigation by the US for laundering money for global drug cartels and terrorist groups. A recent University of Stellenbosch study indicates that South Africa lost 1.5 trillion rand—£750 million—in the five years between 2014 and 2019 in looting and money laundering, which, for a relatively small economy emerging from decades of apartheid, is a massive cross to bear.
The Gupta family are reported to be either in Dubai, where they appear to reside, or in India, where they often visit. The Dubai financial district styles itself as a 1960s/1970s-type Swiss-bank-secrecy jurisdiction, so why do the UK and US Governments tolerate such blatant money laundering by the Dubai authorities, supposedly allies? Further, it appears that the UAE does not extradite its own citizens. It may well be that the Gupta brothers and their family have attained UAE citizenship, either by buying property or by some similar mechanism. The South African authorities have secured an extradition treaty with Dubai and the UAE but are now struggling to get the Dubai authorities to comply with the spirit of it.
Why does India not extradite the Gupta brothers, given that the South African authorities have now put two of the brothers and their wives on the Interpol list? While one of the brothers, Ajay, is still said to be an Indian citizen, the second brother, Atul, took South African citizenship and presumably gave up his Indian citizenship in the process. Why have the Indian authorities been invisible in dealing with the money laundering at the Bank of Baroda branch in Johannesburg, and why they have not taken strong regulatory action to demonstrate to all Indian banks that they will not tolerate such lax money laundering standards by their banks in their overseas operations? And why has Hong Kong not taken action over the many Gupta money laundering transactions that went through it?
While the US and the UK have listed the Gupta family assets and are able to freeze them if deposited in US or UK banks, will the Minister ensure that this listing applies to assets held in non-US or non-UK banks in the UAE or India, or to arresting any members of the Gupta family were they to be on US or UK territory? I have written today to the Chancellor requesting action and urged that he meet South Africa’s Finance Minister to progress all this.
My Lords, the Global Human Rights Sanctions Regulations have full support across the House, as we have heard today, and I add my tribute to the work of Bill Browder. However, in the debate on those regulations when we were considering them, I warned that the powers alone are not enough and that:
“They must be used correctly, be applied to the correct individuals and form part of a wider foreign policy that stands for human rights”,—[Official Report, 29/7/20; col. 329.]
a point emphasised by the right reverend Prelate. I too welcome the recent announcement of sanctions on those responsible for the continued suppression of democracy and human rights in Belarus, and I welcome the fact that the EU, the US and Canada are imposing their own sanctions in parallel.
However, why have we been slow to mirror the sanctions of the US in relation to China? Here I pay tribute to my noble friend Lady Kennedy, whom China has attempted to silence but she continues to stand up for human rights. There is overwhelming evidence of human rights violations taking place in Xinjiang, yet the Government have not been prepared to extend sanctions to all those responsible. Labour called on the Government to apply sanctions to the Myanmar military following the brutal human rights violations in September 2020, yet there was no action until after the February 2021 coup. Time and again, the Government have been too slow to act and not nearly comprehensive enough in the application of sanctions, a point made by the noble Lord, Lord Clement-Jones, in his introduction. Are we going to see further sanctions applied to Xinjiang officials? Why were sanctions against Myanmar officials delayed for so long?
There must be a broader strategy to stand up for human rights whenever they are under threat, and that means more than sanctions. For a start, the Government must strengthen the Modern Slavery Act and clamp down on reporting loopholes. I have raised this issue with the noble Lord, Lord Ahmad, on numerous occasions. The Foreign Secretary announced these changes nearly six months ago, and one would have hoped to have seen them by now. Can the Minister tell us today when the long-promised amendments to the Modern Slavery Act will be introduced? We need to ensure that the Government take action against hostile business owners so that they no longer have an escape route from the reporting mechanisms of the Modern Slavery Act.
My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling this debate and all noble Lords for their insightful contributions. I will try to address all the points raised, but if I cannot I will write to noble Lords and place copies in the Library.
On 6 July 2020, the Government established the global human rights sanctions regime by laying regulations in Parliament under the Sanctions and Anti-Money Laundering Act 2018. This sanctions regime gave the UK a powerful new tool to hold to account those involved in serious human rights violations or abuses. The regime is not intended to target individual countries, but allows for sanctions to be imposed on individuals and entities involved in serious human rights violations or abuses around the world.
The global human rights sanctions regime reinforces the UK’s role as a force for good and defender of the rules-based international system. It complements and enhances the UK’s global leadership of the promotion and protection of human rights around the world. It also enable the Government to use asset freezes and travel bans against those involved in serious human rights violations and abuses. The measures can also be applied to those who facilitate, incite, promote or support perpetrators of human rights violations or abuses. This includes those who profit or benefit from the violations or abuses. The human rights included within scope of the regime are: the right to life; the right to not be subjected to torture or cruel, inhuman or degrading treatment or punishment; and the right to be free from slavery, nor be held in servitude, nor be required to perform forced or compulsory labour.
Since we launched our global human rights sanctions just under a year ago, we have designated nearly 80 people. This includes designations for those involved in some of the most notorious human rights violations in recent years mentioned by noble Lords, including in Belarus, Myanmar, China, Russia and North Korea. The designations that we have put in place demonstrate that the UK will use these sanctions to stand up for human rights, including in support of the rights of those from minority groups.
On 22 March, the Foreign Secretary sanctioned four Chinese Government officials, and the public security bureau of the Xinjiang Production and Construction Corporation, for their role in the serious human rights violations that have taken place—and persist—against Uighur Muslims in Xinjiang, as mentioned by noble Lords. These measures were taken alongside the US, Canada and the EU, sending the clearest possible signal that the international community is united in its condemnation of China’s human rights violations in Xinjiang and on the need for Beijing to end its discriminatory and oppressive practices in the region.
Just this Monday, the UK, along with the EU, US and Canada, imposed sanctions against individuals from across the Belarusian regime, in response to the detention of Roman Protasevich and Sofia Sapega, following the unlawful diversion of the Ryanair flight last month, and for the continued suppression of democracy and human rights in Belarus. Although these designations were imposed under our Belarus regime rather than our global human rights regime, noble Lords will see that protecting human rights is a central issue in these new sanctions.
We are debating the effectiveness of the global human rights regime. As mentioned by noble Lords—including the noble Lord, Lord Anderson, and the noble and right reverend Lord, Lord Harries of Pentregarth—this regime came into action last July, so it is less than a year old. One must bear in mind that sanctions are a long-term policy tool, and their full impacts and effects become clear only with time.
The noble Lord, Lord Browne of Ladyton, spoke of the wider policy approach, but this is part of a wider policy approach and will be most effective in conjunction with other policy interventions, and with the support of our international partners—as mentioned by other noble Lords, our partners in the US, Canada and the EU. I note that Australia is also looking at Magnitsky regulations as we speak.
That said, our global human rights sanctions regime has drawn attention to some of the most critical situations in the world. It has established a deterrent to those who might commit human rights violations and abuses. It has helped to build a coalition of key allies—which is really important—calling for improvements in human rights around the world. It has focused attention on China’s policies in Xinjiang and raised a reputational cost for those looking to benefit from China’s activities there. It has also sent a strong message in response to events in Belarus. These signals will be heard not just by those immediately designated but by perpetrators and victims of human rights violations and abuses around the world.
It is also important to regularly review our sanctions to ensure that they are still fit for purpose. As required by Section 30 of the Sanctions and Anti-Money Laundering Act 2018, the Government will report annually to Parliament on all sanctions regulations and whether the regulations remain appropriate for the purposes stated within. In addition, as raised by other noble Lords, we will conduct periodic reviews of autonomous sanctions designations every three years under the sanctions Act.
I will come to the questions raised by noble Lords. The noble Lord, Lord Clement-Jones, raised issues relating to Ryan Cornelius, and I know that the noble Lord has had a number of meetings with responsible Ministers from the other place. As noble Lords will be aware, the Foreign, Commonwealth and Development Office continues to be in contact with Mr Ryan Cornelius and his family to provide consular assistance. Consular officials have raised Mr Cornelius’s health concerns with the local authority and continue to ensure that he receives appropriate medical treatment.
The noble Lord, Lord Anderson, was asking about how we make decisions on who to sanction. All decisions must be taken in accordance with the designation criteria set out in the regulations. We have published a policy note setting out factors likely to be relevant to designation decisions. We also, as the noble Lord asked, consult with NGOs. We have published an information note aimed at NGOs and civil society organisations to support dialogue with the Government. As set out in the information note for NGOs, we need the following information. What is the activity that justifies the application of sanctions? Who is the person? How and to what extent is the person involved in that activity?
The noble Lord, Lord Austin, raised the issue of Navalny and Belarus and was asking why we have not sanctioned those involved in Navalny’s detention. We have called on Russia to fully declare its Novichok programme to the OPCW and to conduct a thorough investigation into Mr Navalny’s poisoners. The UK applied sanctions last October to six individuals and an entity involved in his poisoning. We continue to work with our international partners to hold Russia to account, and we will continue to consider designations guided by the purpose of the regime and based on the evidence.
The noble Lord, Lord Browne of Ladyton, brought up the subject of economic crime. Her Majesty’s Government are committed to combating illicit finance. We have strengthened our response through the landmark plan published in July 2019, which brought together government, law enforcement and the private sector to deliver a whole-system response to economic crime. A key pillar is the money laundering regulations of 2017, which regulate and supervise all businesses most at risk of enabling money laundering—including financial institutions.
The noble Lords, Lord Anderson and Lord Browne of Ladyton, asked how Her Majesty’s Government will monitor and evaluate sanctions regimes. Her Majesty’s Government will report to Parliament annually, as I said earlier, and as required by Section 30 and 32 of the sanctions Act. We will report annually to Parliament on all sanctions regulations.
The noble Lord, Lord Austin, and the noble Baroness, Lady Kennedy of The Shaws, mentioned two individuals: Mr Gutseriev and Mr Oleksin. We have already imposed over 100 designations in response to the fraudulent elections and subsequent human rights violations in Belarus. We will continue to keep all evidence and potential listings under review guided by the objectives of the UK sanctions regime. However, it is not appropriate at the moment to speculate on who may be designated, as to do so could reduce the impact of those designations.
The noble Lord, Lord Hain, brought up the subject of the Gupta family and South Africa. As he is very much aware, Ajay, Atul and Rajesh Gupta and their associate, Salim Essa, were at the heart of a long-running process of corruption in South Africa, which caused significant damage to its economy. We sanctioned these individuals under the global anti-corruption sanctions regime. While the imposition of sanctions is at the discretion of the Secretary of State, Her Majesty’s Government cannot advise operationally independent agencies on which cases to take on.
The noble Baroness, Lady Kennedy of The Shaws, mentioned the media—I will have to go through this quite quickly. We launched a media freedom campaign in November 2018 and, as part of the campaign, the FCO helped to launch the Media Freedom Coalition and the Global Media Defence Fund.
The noble Baroness also mentioned the high-level panel of legal experts. The sanctions regime meets a number of the recommendations set out in their report, including the ability to respond to serious human rights abuses and violations globally. It can apply to non-state actors, including companies, and to secondary participants; it is not limited to officials.
The noble Baroness, Lady Jones, brought up the subject of Hong Kong. The Government have taken clear and decisive actions in extending our existing arms embargo on mainland China to include Hong Kong, suspending the extradition treaty with Hong Kong and creating a new visa route for British nationals (overseas). We have raised this matter with our international partners at the UN Human Rights Council and at the recent G7 summit. We will continue to engage and co-ordinate actions with our international partners as befits our historic commitment to the people of Hong Kong.
I have not answered all questions, but I will write to noble Lords on those that I have not answered.
To ensure our sanctions have maximum effect in the future, when setting out new sanctions we are likely to consider cases where we can co-operate and co-ordinate with our international partners and where our action is most likely to have a positive impact on the underlying situation. This is because, in practice, targeted sanctions are most effective when they are backed by co-ordinated, collective action.
The Grand Committee stands adjourned until 3.35 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.
Flood Plains: Housing Development
Question for Short Debate
To ask Her Majesty’s Government what assessment they have made of the impact of building major new housing developments on functional flood plains in the context of climate change; and whether they intend to amend planning law accordingly.
My Lords, I am delighted to have secured this debate, which is very timely given the Environment Bill currently before the House and the planning Bill due imminently. I look forward to all contributions from noble Lords, not least my noble friend the Minister who will respond from the Front Bench. I am very aware that these issues relate to dual responsibility, not just to the Ministry of Housing but to Defra. My noble friend will be as aware as I am of the impact that floods have had across North Yorkshire and the whole region on many occasions. I refer to my interests in the register and note that I am co-chair of the All-Party Parliamentary Water Group and vice-president of the Association of Drainage Authorities.
The Library prepared a note today setting out why this is such an issue. Some 5.2 million properties are at risk of flooding, and there is a fear that that may double. The definition of a functional flood plain is
“land which would naturally flood with an annual probability of 1 in 20 or greater, or land that is designed to flood in an extreme flood.”
The Environment Agency has stated that
“as of 31 March 2019, 121,000 residential properties were in areas at high-risk of flooding from rivers and the sea, and 458,000 were in medium-risk areas. 239,000 residential properties were in areas at risk of flooding from surface water, with a further 395,000 at medium-risk.”
I have been campaigning on these issues for a number of years. They include such issues as ending the automatic right to connect water supply to major new developments, building more appropriate housing, ending the practice of building on functional flood plains, using more natural flood defences such as the Slowing the Flow at Pickering pilot project—which is a brilliant example of land use management in the interests of protecting communities downstream from flooding—and using SUDS and other sustainable drainage to prevent sewage spills into existing developments. Implementing other conclusions from the Pitt review of 2007 and giving water companies the status of statutory consultees on planning applications for major new housing developments would also help. There is a role for building regulations to make houses more resilient to floods and ending the combined sewer overflows.
The floods of 2007 brought substantial damage to Pickering and other parts of North Yorkshire, and the new phenomenon of surface water flooding. It is not generally understood that it is impossible to obtain insurance for houses built after 2009. Developers are meant to build houses that are not subject to flooding; if the houses then flood, the householders are ineligible for insurance. I hope that my noble friend will commit to keeping this under review and holding the developers to account.
I hope that my noble friend can also explain the obsession with building executive-style housing of three, four and five-bedroom houses, when there is an obvious need for starter homes of one or two bedrooms, which are equally in demand for those starting a career or employment and those facing retirement. I am thinking in particular of the farmers who will be invited to take retirement through the environmental land management schemes in the Agriculture Act; there is nowhere for them to go. This is an acute problem for tenant farmers and the whole rental and owner-occupier market.
Will my noble friend undertake to liaise with the Minister at Defra as regards catchment management control as the best way of tackling flood management and identifying areas prone to flooding? There are many bodies with a role to play; I am looking at the drainage boards, local authorities, farmers, landowners, district councils and others. I pay tribute to the work of drainage boards in this regard in low-lying rural areas and welcome the fact that the Environment Bill looks to create new ones and permit possible future expansion of internal drainage boards where appropriate.
I would like to highlight the importance of regular maintenance and routine management of river systems across a catchment and the damage caused where none is done. I make a plea to my noble friend and his counterparts in Defra for increased revenue spending to bolster resources with the use of properly skilled, experienced engineers. This would keep rivers, surface water systems, gullies, SUDS, insulation flows, and so on, clear of debris and would reduce the flood risk.
The environmental land management schemes have a role to play under the provisions of the Agriculture Act in rewarding farmers for public good, of which flood prevention and flood alleviation will be crucial: for example, by storing water temporarily to prevent communities downstream from flooding. However, as my noble friend may be aware, there is a problem with the Reservoirs Act possibly thwarting this. In that vein, I welcome the recent report on reservoir safety, published by Defra in March and drafted by Professor Balmforth, which focuses on the need for a better system of risk assessment of reservoirs rather than simply categorising them by size.
I draw my noble friend’s attention to the conclusions of the Pitt review which to date, as of June 2021, have not been adopted. In particular, recommendation 10 calls for
“The automatic right to connect surface water drainage of new developments to the sewerage system”
to be removed, or at least to amend that right to connect to a public sewer, making it conditional on meeting requirements in design, construction and the guidance code for adoption. We should also oblige local authorities and other highway agencies to seek to prevent, in maintaining, upgrading or building new infrastructure, untreated run-off from roads and other open surfaces from being discharged into water courses, such as was used successfully in the US Clean Water Act, to ensure a more sustainable management of surface water. That is the most unacceptable form of combined sewer overflow, which could be prevented.
Recommendation 20 of the Pitt review asked that
“The Government should resolve the issue of which organisations should be responsible for the ownership and maintenance of sustainable drainage systems.”
That is a particular problem for retrofit. Going forward, I accept that SUDS have a crucial role to play, but the question of who is responsible for them and maintaining them after construction is key to their success. Recommendation 21 says:
“Defra should work with Ofwat and the water industry to explore how appropriate risk-based standards for public sewerage systems can be achieved”—
for example, through a greater use of SUDS and more natural flood defences such as “slow the flow” schemes.
I will end with some questions to my noble friend and recall some of the recommendations of the report that I was involved with, Bricks & Water. Basically, we called for extra funding to be provided to local planning authorities to ensure that new development is located in accordance with the National Planning Policy Framework and to pursue enforcement action against developers who do not comply with planning conditions.
Given the uptake of property flood resilience measures and continued development within the flood plain, will the Government either extend the Flood Re scheme to cover residential buildings constructed after 1 January 2009 or put an alternative scheme in place? Further to Defra’s recent consultation on the amendments to the Flood Re scheme, will the Government extend this remit to offer discounted insurance premiums to home owners who have installed property flood resilience measures and provide funds for home owners to build back better after a flood?
I have further questions in conclusion for my noble friend. Can he provide further detail on the process of planning policies and processes for managing flood risk, which may need to be strengthened, and how he intends that they will reduce flood risks? Will the Government commit to further strengthening planning policy to prevent new development in areas of high flood risk, such as functional flood plains? Will the Government commit to consultation on inclusion of property flood resilience measures within building regulations as part of the ongoing review?
It is not just North Yorkshire, Pickering and the Vale of York as well as the whole region of Yorkshire that has suffered these substantial floods; it is also the case with Gloucestershire, Lincolnshire and other parts of the country. Therefore, I end with a call to my noble friend and the Government that, based on the experience of floods that we have seen in successive years, we should build appropriate houses in appropriate places and end the practice of building inappropriate houses in inappropriate places. I am grateful for the opportunity to debate these issues, and I look forward to other comments in the course of the afternoon.
My Lords, I congratulate the noble Baroness, Lady McIntosh, on getting this debate and on showing her expertise and knowledge in this field. In particular, I commend her report Bricks & Water, which raises many of these issues.
This Session of Parliament has seen rather a contradictory approach by the Government in this area. On the one hand, we have the Environment Bill and the associated preparations for climate change in COP 26, along with a general recognition of the need to mitigate and adapt to climate change. On the other hand, we have a planning reform Bill that is likely to dilute or omit protections and adaptations that are needed due to man’s intervention and climate change.
We know that substantial numbers of houses are prone to flooding and that extreme events such as massive storms and sea surges will be far more frequent. We know that surface flooding and the breakdowns in drainage and sewerage systems are already with us. However, we are still not taking the measures needed, and the problem is becoming worse. We need to ensure that developers and the construction industry do not add to the problem and that local authorities do not see building on flood plains or flood-prone areas as an easy way in which to meet their affordable housing quotas or to provide up-market riverside dwellings to raise the tone of the neighbourhood.
Frankly, we need an absolute ban on building on category 3 land, at the very least. At present, the only brake on such developments beyond the individual planning processes is the role of the Environment Agency, which has responsibility not only for mapping the flood risk but for general guidance on developments in flood-prone areas—and of course, that is where you find the experts on total flood systems and river systems management, as the noble Baroness indicated. Of course, it is a statutory consultee in such planning proposals, but, frankly, that does not work.
I was a member of the board of the Environment Agency when we were explicitly given these new roles. I remember saying at the time that we were accepting responsibility without power—the privilege of muggins through the ages. I am afraid that that anxiety has been borne out: the Environment Agency has not had the resources to examine anything like all planning proposals, even the large ones. When it does comment or object and call for modifications to developers’ proposals, it can be totally ignored by the local authorities and even by the Planning Inspectorate. The Environment Agency combines expertise in this field with understanding of river and flood responses, yet it has no real power.
I suggest that, on the one hand, the presumption of any proposals for building at least on category 3 flood plains should be absolutely prohibited, and the Environment Agency should have the power to enforce that—or, alternatively, given the Bill that is before us, we could place a duty on the office for environmental protection that there should be no new developments on land that is most subject to flooding and, if necessary, the OEP could overrule the planning system, the Environment Agency and any other public body, if new developments are being given the nod. That is a possible role for the OEP, which would make it effective in this adaptation field.
I have a number of questions for the Minister to answer now or in writing. How many planning decisions in England over the past five years have involved building on flood plains, particularly in category 3 areas? On how many of them had Environment Agency advice been given as a statutory consultee, and to how many did the agency object or put in significant modifications? How many have actually gone ahead?
To go back to what the noble Baroness, Lady McIntosh, asked, how many of Sir Michael Pitt’s recommendations remain unenacted? In more immediate terms, will the Minister and his colleagues in MHCLG insert a new clause in the planning Bill to ban absolutely all building on flood plains or at least in category 3 areas?
My Lords, I am pleased to take part in this debate instigated by my noble friend Lady McIntosh. In case my noble friend the Minister thinks this is a Yorkshire issue, I underline again that while my experience is also Yorkshire-based, the problems of flooding affect, have affected and will affect in future upwards of 5 million properties, homes and livelihoods. The effect both economically and traumatically on individuals, families and businesses is both terrible and long-lasting.
Climate change presents great challenges, and all the preparations and changes to planning laws that we might be contemplating now have to reflect a worst-case scenario over the next 50 to 100 years. Too often we legislate for the short term without fully appreciating the likely extent of the problems that we face in the medium or long term.
Flooding has of course been with us in the past. I remember the floods that affected Ripon and other parts of Yorkshire in 2007, as my noble friend said, when the Skell, Ure and Laver rivers, which all meet there, overflowed and a large number of properties were flooded. More recently, there has been a propensity of flooding in York and parts of Leeds. In the case of Ripon, the 2007 events led to a £14 million scheme that gave some protection to properties. In reaction to those events, there was also determination to make changes to architecture, providing improvements to vulnerable buildings so that they could meet any future threats.
It is on resilience to flooding that I wish to concentrate my remarks. The excellent report from the House of Commons Environment, Food and Rural Affairs Select Committee, under the chairmanship of my good friend Neil Parish, called inter alia for a more clearly defined flood resilience objective, or PFR. This includes the construction of flood defences but also deals with the pressing issue of the nature of the construction of properties that have received planning permission on flood plains, where the risk of flooding is small but possible in the lifetime of the buildings.
In other parts of the world where flooding is a threat, there are clear requirements that any construction must be undertaken in a way that minimises the effects of flood-water. We need the same approach here. Flood doors, airbrick covers and non-return valves should be part of regulations; underground tanks for excess water or houses on stilts should be part of the architects’ thinking; and sharing knowledge and experience should be more encouraged.
The Select Committee report underlines that few PFR measures have been introduced. The Environment Agency suggested in 2019 that over 200,000 residential properties should have resilience measures added, but currently only 500 properties a year are being enhanced. The insurance companies are keen to see this as well, and in some cases where flooding has occurred are offering sums to ensure that PFR is applied to properties on top of flood-related losses.
What about the future? Local planning authorities are caught between a rock and a hard place—or a potentially flooded place. They are being pressed to approve more and more applications for development, including on functional flood plains, and they feel the pressure all the time. This means that Environment Agency advice on flood mitigation can be overridden by planning authorities. That must be reversed. The agency should be able to veto developments unless they have proper flood mitigation in place. Although the current building regulations have been brought up to date to ensure certain standards of insulation, safety and convenience, they must be amended to include flood protection measures for new properties. I can sense no resistance to such changes from anyone.
We must try to ensure that, where the risks of flooding are new and presenting themselves for the first time, the insurance industry responds positively to small and medium-sized enterprises that might not be able to mitigate their losses or be eligible for government assistance. The Flood Re scheme to smooth residential property insurance cover is of help, but we all know of the distress caused by flooding and its long-term effects, which can never be fully compensated.
I conclude my remarks by again paying tribute to my noble friend Lady McIntosh of Pickering. The flood defence scheme to which she referred in Pickering itself was cleverly designed to slow the flow of flood-water through the headwaters on Pickering Beck. It was promoted and supported by my noble friend with great enthusiasm and energy. An equal display of enthusiasm and energy by the Government in their flooding and planning policies would be most welcome to us all. Naturally, we expect nothing less of our noble friend the Minister.
My Lords, I too congratulate the noble Baroness, Lady McIntosh of Pickering, my friend from the other side of the Chamber. I support what she and the noble Lords, Lord Whitty and Lord Kirkhope, said. Quite honestly, it is ridiculous that anybody builds on flood plains. I could understand it if we were skilled at building on stilts, an idea alluded to by the noble Lord, Lord Kirkhope, and skilled at accessing places on water, but building the sort of houses we build on flood plains is madness.
We all know that flooding is becoming increasingly severe and is expected to get worse and worse as climate change worsens. The Climate Change Committee warned just last week that the climate is changing,
“as studies into extreme weather events show that human-induced climate change has increased the likelihood of some observed UK precipitation extreme events linked to significant flooding impacts.”
That basically means there will be more flash floods as rain hits us harder and faster than we are used to, so we are likely to see more flooding. The Environment Agency has estimated that the number of houses built on flood-risk areas will double to 1 million homes in the next 50 years, and I think that will be a gross underestimation unless the Government change something quickly.
One argument the Secretary of State for Housing, Robert Jenrick, put forward for building all these new homes was that it would help young people on to the housing ladder. I do not know how many young people can afford a house in the south-east of England, but I suspect not very many. Of course, developers do not care. They get the money for the houses regardless; they just want to build as many homes as they possibly can as quickly and as cheaply as they can.
The noble Baroness, Lady McIntosh, talked about starter homes, community land trusts and affordable homes. These are options we must look into and be more serious about. For some reason, although the Government talk about them and set up ways to have them, they never seem to happen. We cannot solve Britain’s housing crisis—it is not just in Yorkshire but is a national crisis—by building shoddy homes in dangerous places, which is what this is. We need high-quality, safe, energy-efficient homes situated in ecologically sound places. That means that they stay dry. If the Government live up to their stated environmental ambitions or have the slightest bit of common sense, the way forward is obvious: we simply do not build on flood plains.
This should not even be a debate. I hope the Minister will state the obvious today— that will not happen—but I fear we will get some woolly answer about consultations and things happening in due course. It is a national problem that we cannot fix once these houses are built, because they will not be safe, dry or good to live in and, as several noble Lords have already said, it will be impossible to insure them. Once again, the Government are building for failure, and I do not understand why any Government would do that.
I congratulate my noble friend Lady McIntosh of Pickering, not only on securing this debate but on her very good introductory speech on this matter. I refer to my interests as set out in the register, particularly those relating to wildlife and conservation: I am on the advisory board of River Action and chairman of the Essex Climate Action Commission.
My noble friend and other noble Lords have raised many pertinent points with which I would agree. Flooding obviously causes misery, as well as expense. As we have heard, particularly from my noble friend Lord Kirkhope of Harrogate, the matter of insurance is a real problem for many people. I also emphasise that I agree with the noble Baroness, Lady Jones of Moulsecoomb: the idea of building on a flood plain would, to most people, seem a complete no-brainer. Why would you want to do that when there is that risk, particularly when you do not have to? However, as has been said, local authorities and others are under pressure to find new areas for homes.
We have heard how my noble friend Lady McIntosh of Pickering worked very hard regarding the flooding measures. There are also natural flood reduction measures that can be considered, but they are not the only answer.
I mentioned that I am chair of the Essex Climate Action Commission; we have been looking at how many existing houses are already potentially at risk of flooding due to climate change, not least because of the rising sea level. That is something else that must be borne in mind.
I want to give some thoughts to my noble friend the Minister that might be worth looking into. The Wildfowl & Wetlands Trust, of which I have been a member for a long time, has produced a useful piece of work called A Blue Recovery. One of the many things in that is how new wetland cities have been created—particularly in China, but there is no reason why we should not look at that here. We can think back to the garden cities that were created quite a few decades ago now. I think the idea of wetland cities might be very appealing. We might be able to do flood reduction, and it could be a nice place to live. To go back the idea of just putting up a lot of houses—never mind the affordability, which is a crucial matter—I have found that, once people have got into those alleged “starter homes”, a lot of them want to move out of those estates as quickly as possible. If, instead, you created a whole new town or city based around waterways and wetlands, it would be good for biodiversity, flood prevention and, critically, carbon capture.
I just say: please, we must not build on flood plains, but let us also think of other innovative ideas that might help.
My Lords, it is a pleasure to follow the noble Lord, Lord Randall of Uxbridge, on this important topic. I congratulate the noble Baroness, Lady McIntosh of Pickering, on securing this important debate and for outlining comprehensively the case for addressing housing developments on functional flood plains in the context of climate change and the whole role of planning in relation to that.
I recall that, under the then chairmanship of the noble Baroness, Lady McIntosh, the EFRA Select Committee in the other place, of which I was a member, had an inquiry on this specific issue and took evidence in relation to Flood Re and sustainable drainage schemes. Particular reference was made by the noble Baroness, as chair, of the whole area of non-implementation of the Pitt review, which was shortly after 2012. It is interesting to note that these issues are still pertinent. Indeed, the noble Baroness, Lady McIntosh, had submitted an amendment to the Environment Bill which urges the Secretary of State to make provision by way of regulations to approve and promote sustainable drainage systems and natural flood defences.
The Government, by way of strengthening the Environment Bill, should ensure that proper and adequate controls are put in place so that effective mitigation measures ensure that major new housing developments are fully protected and episodes of flooding are avoided. It is worth noting that we are now experiencing warmer, wetter summers and warmer winters—undoubtedly the result of climate change. Heavy rainfall with large amounts of surface water has already caused problems for housing estates constructed on functional flood plains.
I realise that this issue is devolved to the devolved Administrations, but I would like to give an example from my former constituency where I reside. From a Northern Ireland perspective, last summer we experienced very heavy rainfall in Newcastle, which is at the foothills of the Mourne mountains where the rivers flow directly into the Irish Sea. This is a coastal town and the dwellers experienced much inundation of water. Some have now lived in other properties for a considerable time while waiting for their houses to be renovated and improved or while waiting on the necessary insurance. Because of that heavy rainfall, rivers flowing into the Irish Sea burst their banks and have overcome roads, footpaths and houses, causing considerable damage and distress.
My colleague, the Minister for Infrastructure in Northern Ireland, has accelerated a flood alleviation scheme, on which work has already started. Previous flood alleviation schemes in this town, which were initially successful, simply displaced water, which resulted in last year’s flooding episode. It is important to ensure that the latest scheme is resilient and resistant to the displacement of water to other locations. Therefore, the National Planning Policy Framework is key. It states that:
“Where development is necessary … the development should be made safe for its lifetime without increasing flood risk elsewhere.”
It is important that housing, both private and social, is provided where there is a clear need as long as it meets environmental standards and is resistant to flooding waters. That is why construction on flood plains should be opposed unless there is a specific need, and then it should be carefully circumscribed by planning regulations. Sustainable drainage schemes should be availed of. Like other noble Lords and the noble Baroness, Lady McIntosh, I ask when the PLP review will be fully implemented, and when will a planning Bill be published that will deal with these particular issues?
My Lords, it is a pleasure to follow the noble Baroness, Lady Ritchie, and I am grateful to the noble Baroness, Lady McIntosh, for giving us the opportunity yet again to raise our concerns about concreting over natural flood plains. I declare my interest as a vice-president of the LGA. I am currently working on the Environment Bill, where both water management and recycling are high on the agenda. My speech is largely recycled from previous contributions.
The truth is that your Lordships continue to make very valid and cogent points about the dangers of building on flood plains, but the Government continue to ignore this. Many years ago, a developer put in an application on the Somerset levels. This was rejected by the local district council, but the developer appealed. The then Secretary of State overruled the district council and allowed the development. This was before the catastrophic floods of 2014, when the Somerset levels were on every TV news bulletin.
Ministers and opposition spokespeople visited in their droves and royalty came, complete with wellies—although, to be honest, they really needed waders. They came to look at the plight of those whose homes had been flooded—a miserable experience. Some of those flooded were in new houses, some in homes which had been there for a considerable time. The ancient village of Muchelney was completely cut off and could be accessed only by boat. It took several months for the water to completely recede and some sort of normality to return.
There are an estimated 5.2 million properties in England at risk of flooding. The Environment Agency says that if the current rate of planning applications on functional flood plains continues, this could double in 50 years. The Somerset Levels are not the only area in the country prone to repeated flooding, as we have heard. The Environment Agency website has detailed maps of where functional flood plains are, so this is not a mystery to planning authorities.
On the district council where I was a councillor, all planning applications had spaces for the Environment Agency, highway authority, et cetera, to make comments on the application. Often they left them blank or merely had no concerns. All statutory bodies are extremely busy, and the Environment Agency in particular has to respond to emergencies on a regular basis, especially now that climate change has radically altered our weather patterns. It has not helped that Defra, in its wisdom, has cut the Environment Agency budget. I believe it is time for the Government to make it a legal requirement for the Environment Agency to respond to all planning applications of more than five homes, where they are likely to be situated on a functional flood plain.
It would, of course, be helpful if local authorities were given the power to refuse all applications on flood plains, regardless of their merits, unless significant flood prevention schemes were part of the application. Developers believe that a likely occurrence of once in 200 years means they can ignore guidance. There are many communities in which a “once in 200 years occurrence” has happened twice in the last 20 years.
The Somerset Levels are very definitely functional flood plains. When severe rain is predicted, there is a plan for which sluice gates will be opened, in what order and when. Sometimes the whole area is flooded if the rain is persistent over a long period of time. The whole object of flooding the plains is to keep a safe level of water in the River Parrett and prevent the town of Bridgwater flooding. That objective has been fulfilled for many years, but for how much longer if more homes are erected? Perhaps those homes will be erected on platforms via stilts and residents will buy boats instead of cars to keep in the spaces under their homes.
The Government’s proposed planning Bill has come in for considerable criticism; I have a premonition that at some stage I will be speaking during its passage. It is time that the Government had an overall strategy on how they are going to manage water, safely store it during winter for use during the summer droughts and deliver the number of homes needed without building anywhere near flood plains. Can the Minister confirm whether there is such a strategy? This must be a strategy that local people with knowledge can contribute to and not one that is cobbled together from on high.
The noble Baroness, Lady McIntosh, and others have raised very significant issues. I hope the Minister is listening. It is unacceptable for London’s city-dwelling civil servants to produce policies which have devastating effects on rural areas. I am sure he is aware of this and will be taking note of our comments.
My Lords, I add my appreciation to the noble Baroness, Lady McIntosh, for creating the opportunity for us to take part in this debate, which is extremely close to my heart. My first crisis as leader of Leeds City Council was dealing with the impact of Storm Eva around Christmas 2015—the worst storm to hit Leeds since the mid-19th century.
It is hard to really get across just how much the impact of these events hits at the time, but the lasting effects are truly devastating. When he is able to do so, I recommend that the Minister visits Leeds to see the work that we have done since that time. Our flood alleviation scheme brings together a combination of the most advanced technology in Europe with natural flood alleviation measures, which we have heard so much about today, and the Pickering model for Leeds, going right up into the Yorkshire Dales, with extensive tree planting and other land-use management measures. The issue remains that so many people are still at real risk of flooding in future. It is not an accident that there are so many voices from Yorkshire here today. One thing that we have managed to do in Yorkshire is to bring together a whole range of different constituencies to look at all the measures that we can take to address this issue.
It is now over a year ago that the chief executive of the Environment Agency, Sir James Bevan, gave a very stark warning about the risks of housebuilding on flood plains. We are very disturbed to see that the Government have failed to take any action that we can see up to this point. All the comments today go further to get across just how serious the situation is. We have heard about the number of properties at risk of flooding, which equates to one in six properties, and the projections into the future are very stark indeed, if serious action is not taken. One thing that we do know is that, combined with sea levels on the rise, more extreme weather events are likely to take place. So why are the Government still allowing completely inappropriate buildings on flood plains? It simply has to stop—and it is my firm belief that the power to do so is within the Government’s hands.
Could the Government equip local authorities, as the local planning authorities, with the necessary funding and powers to resist unsuitable development on flood plains? They must also include the powers to consider flood-resilient design in all areas at risk of flooding. We have a real problem with repeated cuts to funding for local government across the board, which has led to planning departments across the country with too scarce a resource to be able properly to consider all the complexities of these applications. According to the LGA, what we know is that councils have lost 60 pence out of every pound from central government funding over the last 10 or 11 years. Can the Minister confirm what recent engagement he has had with local authority leaders over the funding of planning departments? Can we insist on future funding flexibility to local government and reflect the increases in line with inflation?
On top of this, the Government’s own National Planning Policy Framework and planning practice guidance on flood risk and coastal change do not even mandate councils not to build on flood plains—they merely request it. Those are the Government’s principal documents giving guidance to councils on flooding and flood plain areas. Can the Minister confirm whether the Government intend to update those documents? This issue is urgent and the Government’s action must be, too. I hope that the Minister can assure the Committee that change will be forthcoming.
My Lords, I congratulate my noble friend Lady McIntosh of Pickering on securing this important debate and campaigning on flood-related matters so ardently. I am grateful to all noble Lords who have contributed this afternoon. The debate has been passionate and very well informed. I am glad to hear that noble Lords share the Government’s commitment to ensure that flood resilience and reducing flood risk is a priority.
Flooding presents a risk to homes, towns and cities every year. The devastating effects of flooding can be seen year on year and, as my noble friend set out in her Question, climate change is a critical consideration in thinking about the future. As the recent UK Climate Risk Independent Assessment sets out, climate change will increase sea levels and associated flooding as well as river, surface and groundwater flooding changes due to altering rainfall patterns. Flooding goes right to the heart of our communities, and the Government take that risk very seriously.
To directly address my noble friend’s Question, our national planning policy is clear: new housebuilding and most other forms of development should not be permitted in the functional flood plain, where flood-water has to flow or be stored. Areas at little or no risk of flooding from any source should always be developed in preference to areas at higher risk of flooding. I cannot comment on individual planning applications or development plans, but our planning policy ensures that only water-compatible or essential infrastructure developments are allowed in the functional flood plain. That should not include new homes.
The National Planning Policy Framework sets out a clear, overarching policy on flood risk: inappropriate development in areas at risk of flooding, whether an existing or a potential future risk, should be avoided and, where possible, alternative locations at a lower flood risk should be identified. That is known as the sequential test. Where development is necessary, and where there are no suitable sites available in areas with a lower risk of flooding, the proposed development should be made safe without increasing flood risk elsewhere. This is the exception test. Where these tests are not met, new development should not be allowed.
That policy recognises that it is unrealistic to completely ban all development in flood-risk areas, as currently around 11% of England is in national flood risk zone 3, which is commonly referred to as high-risk. Flood zone 3 is split into two separate zones by the local planning authority: zones 3a and 3b, where 3b is classified as functional flood plain and has the highest likelihood of flooding. Large parts of many major towns and cities comprise land classified as flood zone 3. However, I have to stress that building on land assessed as high-risk is not the same as functional flood plain. Even then, building in flood zone 3 is not common, as less than 0.2% of land use in flood zone 3 is residential. Areas at the lowest risk of flooding can still experience flooding following a very heavy downpour, which is why we have prioritised the use of sustainable drainage systems for all development in areas at risk of flooding.
In addition to the framework, there are further safeguards in place to protect against inappropriate development on areas at high risk of flooding. The Environment Agency must be consulted on planning applications in areas at risk of flooding from rivers and the sea, and in critical drainage areas. Lead local flood authorities must be consulted on surface water drainage considerations in applications for all major new developments. Their comments and advice should help inform the local planning authorities’ decisions on planning applications and ensure that they are in line with the framework policy on flood risk.
The framework is clear that flood risk assessments are needed for all areas where development is proposed that are at risk of flooding from all sources, both now and in future. Appropriate design and risk considerations that include an allowance for climate change need to be included in any flood risk assessment. Allowances that consider future impacts of climate change on flood risk incorporate a precautionary risk-based approach for more vulnerable areas. This means that increased levels of resilience are factored in.
Our planning guidance recognises the need for appropriate flood resilience and resistance measures. Guidance highlights that such measures are unlikely to be suitable as the only mitigation measure to manage flood risk. We are clear that flood resistance and resilience measures should not be used to justify development in inappropriate locations.
For any major developments within flood zones 2 and 3 where the Environment Agency raises objections on flood risk grounds, the local planning authority is required to consult the Secretary of State if it is minded to grant an application against the agency’s objections. This provides the Secretary of State with an opportunity to call in the decision.
In July 2020, the Government published the policy statement Flood and Coastal Erosion Risk Management, which sets out the Government’s long-term ambition to create a nation more resilient to future flood and coastal erosion risk. This means that we will reduce the risk of harm to people, the environment and the economy. Boosting our resilience will mean that more properties will be protected and communities will be better prepared to reduce the impacts when flooding happens.
The Government are not standing still on this issue. We are assessing the current protections in the National Planning Policy Framework and are considering options for further reform, as part of our wider ambitions for an improved planning system. As part of that, we recently consulted on proposed changes to the framework, including to clarify that the sequential test should consider all sources of flood risk.
We are also finalising our review of our policy for building in areas at flood risk. This will seek to ensure that communities have the reassurances that they need that future development will be safe from floods. The Government are investing a record £5.2 billion in a six-year capital programme for flood defences that will better protect 336,000 properties from flooding and coastal erosion, which will become even more vital in the light of our changing climate.
In summary, my noble friend asks an important question. I can reassure her and the Committee that we not only have incredibly strong protections against the development of new homes on the functional flood plain but that we are working to ensure that these are as effective as possible.
I will now respond to some of the additional specific points that have been raised during the debate. We had a call from the noble Lord, Lord Whitty, and the noble Baronesses, Lady Jones of Moulsecoomb and Lady Blake, to have a complete ban on development on functional flood plains. As a Government, we feel that to ban development in flood zone 3 would mean that land that could safely be built on could no longer provide the economic opportunities that our coastal and riverside settlements depend on. That is why we are against an outright ban.
My noble friends Lady McIntosh and Lord Randall and the noble Baroness, Lady Blake, wanted to see sufficient resource for local authorities both to improve flood resistance and to boost enforcements. The Government want to ensure that local authority planning departments are well resourced and that planning professionals have the right skills to make creative decisions and take forward our ambitions, which will be outlined in the forthcoming planning reform Bill. Since 2010, we have provided direct grant support to local authorities and neighbourhood planning groups to help them engage their communities in neighbourhood planning to shape and influence the places in which they live and work.
My noble friend Lady McIntosh also raised the issue of the automatic right to connect to sewerage. The Government’s planning practice guidance already includes a hierarchy for sustainable drainage options that favours non-sewer solutions. The guidance is clear that draining to a combined sewer should be the least-favoured option in new development. Removing the right to connect to an existing sewer does not offer clear benefits over the current arrangements. It is likely to add costs and delay the planning process.
My noble friend Lady McIntosh also referred to catchment management control liaison and asked whether I could liaise with Defra on that matter. In its Flood and Coastal Erosion Risk Management policy paper, Defra has committed to increase the number of waste management schemes within and across catchments to reduce flood risk and help manage drought risk, and I can assure my noble friend that we will work with Defra on that.
My noble friend also referred to Flood Re and asked whether we could extend it to those homes that were built after 2009. Homes built after 2009 are one of the categories of property excluded from Flood Re, as she pointed out. This mirrors a similar exclusion in the statement of principles, a voluntary agreement between Her Majesty’s Government and the insurance industry that was the forerunner of Flood Re. Measures introduced in 2006 and reaffirmed in 2012 through the National Planning Policy Framework should ensure that homes are built only where appropriately robust flood mitigation is in place.
The noble Lord, Lord Whitty, also referred to the implementation of the Pitt review recommendations. Defra has informed me that all recommendations from the review were accepted by the Government, and the Flood and Water Management Act 2010 was introduced as a result.
The noble Baroness, Lady Ritchie of Downpatrick, wanted to know the publication date of the planning reform Bill. It was announced in the Queen’s Speech and will be introduced in the autumn.
I conclude by reassuring your Lordships that the Government are committed to reducing the risk that flooding poses to our communities. We acknowledge that climate change will increase the risk of flooding. We have strong protections in place to ensure that inappropriate developments are not given permission to go ahead in areas of high flood risk, especially new homes. We are working hard to go further via our planning reforms, investing £5.2 billion in flood defences and reviewing flood policy.
My Lords, the Grand Committee stands adjourned until 4.40 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, which we are not expecting, the Committee will adjourn for five minutes. The time limit for the following debate is one hour.
Official Development Assistance
Question for Short Debate
My Lords, I begin by declaring my interest as an ambassador for HALO, a Scottish-based charity that has acted on mine clearance and the removal of improvised explosive devices around the world, most topically in Afghanistan, to which I shall return in a moment or two. I recommend to your Lordships an article written by the chief executive of HALO, James Cowan, a former Major General in the United Kingdom Army. In the current issue of the Spectator, he writes a most compelling article, following the murder of 11 HALO employees in Afghanistan last week.
I wish to approach the question of the proposed cuts in the overseas aid budget more generally. I have reached the conclusion that these reductions are ill thought out, mean spirited and damaging to our interests at home and abroad. Perhaps rather improbably, I take my cue from the Chancellor of the Exchequer, who has said that it is difficult to justify the size of the aid budget in present circumstances—to which I say, well, how does he know? He has never tried to do so. If he had knocked on a few doors in Chesham and Amersham, he might have found a few people who were sympathetic to the view that the cuts were not in the best interests of either the people of the United Kingdom nor, indeed, those whom the use of overseas development aid is supposed to help.
As a consequence, my conclusion is that the reason for the cut is political, but I have to confess that I see no legitimate political reason—so I have been forced to ask myself whether there is an illegitimate reason. I hope that I am wrong and that it can be shown to my satisfaction that these cuts are not just a dog whistle. I have also sought to ask myself how many of the Government’s party publicly support these cuts, and I can provide the answer to that—it is precious few. I know of members of their party who are, on the other hand, viscerally opposed to the cuts: John Major, Theresa May, Andrew Mitchell and David Davis. You might describe that as a broad spectrum of Conservative thinking and experience, not to mention the noble Baroness, Lady Sugg, who will no doubt speak later and who resigned from the Government so that she could speak against the proposed cuts.
At the heart of this issue is the extraordinary fact that the Government have proposed cuts without a proper policy base to support them. There is a document called the international development review, but it is having a pretty long gestation as it circulates around departments, and it has not yet been published—indeed, some say that it has not yet been approved. Precisely what sort of Government are they who take action to breach the status quo when they have no resolved policy base? There is no question of urgency—indeed, anything but. I am convinced that abroad, these proposed cuts have damaged trust among local communities and locally engaged employees in those areas where overseas aid is effective.
These cuts have been proposed without an impact risk assessment, without considering conflict sensitivity, without regard to the many partnerships we have with other countries and without understanding that cuts are quick, but rebuilding takes longer. They have been proposed without considering the damage to our reputation, particularly among the countries of the G7. Of those who went to Cornwall, no others are cutting their aid budgets; indeed, President Biden has asked Congress for more. Worst of all is that these cuts are proposed with neither consultation nor transparency for the charities and agencies that work in the field.
Let me finish by returning to James Cowan. In the article I referred to, he said that the Halo Trust will not leave Afghanistan notwithstanding the events of last week. He said, much to my surprise, that
“Halo has cleared 850,000 landmines … in Afghanistan, and almost 14 million mines and other explosive items worldwide.”
I offer Halo as being illustrative and typical of the professionalism and commitment of so many of the agencies and charities who look to the United Kingdom for financial support for their work.
As we speak, all over the world, there are countless local, national and international charities and agencies helping to alleviate the suffering of the poor. They are helping, sometimes in difficult circumstances, to maintain human rights. They are helping to increase life chances, particularly those of girls and women. The fact is that the United Kingdom has been a notable contributor to these efforts. Indeed, our commitment is enshrined in statute. A reduction in support will diminish the effectiveness of the charities and agencies which depend on it. It will inhibit them in the valuable work they carry out. The agencies and charities deserve better from this Government.
I thank the noble Lord, Lord Campbell, for asking this Question.
My Lords, despite the difficulty caused by the lack of transparency around the details of the cuts, analysis by Save the Children indicates that gender equality-focused programming is being severely affected, and women and girls will suffer disproportionately. An estimated 20 million women and girls will not be reached by programming as a result of the reduction in funding. Some 700,000 fewer girls will be supported by education, 2 million fewer supported by humanitarian assistance, 8 million fewer supported by nutrition interventions and 9 million fewer women and girls supported to access clean water and sanitation. These cuts will, sadly, undo progress towards gender equality at a time when the pandemic has rolled back women’s and girls’ rights by a generation.
The Foreign Secretary has confirmed that the FCDO
“carried out an equalities impact assessment”,
the only one I believe, which
“showed no evidence that programmes targeting those with protected characteristics were more likely to be reduced.”
Given the analysis I referred to and the huge cuts of up to 85% to family planning and contraceptive programmes, alongside no similar cuts to male-focused programmes, I fail to understand how these cuts are not worse for women and girls. My first questions are: do the Government still consider that women and girls have not been disproportionately impacted by the cuts, and when will they publish the equalities impact assessment?
Turning to girls’ education, I welcome the UK contribution announced at the G7 to the Global Partnership for Education, an increase of 15%. However, given the increased need I point out that the percentage burden share of the UK contribution to GPE has actually fallen, and the G7 failed to raise the $3.5 billion needed to hit the $5 billion target of the GPE replenishment summit that we are hosting in July. I fear this is a regrettable ripple effect of cutting our aid spending by such a large amount; it makes it a lot harder for the UK to encourage other countries to do more when we are doing less.
It is difficult to get to the bottom of the detail, given the lack of transparency, but, as far as I can uncover, this GPE increase is being paid for by cuts to wider education programming such as Chevening and the prosperity fund. Given these equivalent cuts, that means that total spending on girls’ education has still decreased by 25%. My final question is: do the Government recognise this 25% reduction? If not, will they publish the detailed figures so that we can understand the reality of the situation?
My Lords, I too thank my noble friend Lord Campbell of Pittenweem for tabling this debate.
For what it is worth, my personal opinion is that the resounding defeat of the Government’s party in the by-election in Chesham and Amersham, one of its safest seats, by my party should be a salutary reminder that the Prime Minister’s Teflon qualities are wearing thin. What I heard on the doorstep was dislike and distrust of this Government, which made it much easier to get our points on planning issues across. The Government have underestimated the damage that cuts to the aid budget will do, not just to the UK’s reputation abroad but to their own brand. Whether or not you agree with the cuts, what sticks in the memory is that the Government willingly broke a manifesto pledge. For voters, trust is a commodity that, once lost, is hard to regain.
How does a cut to the aid budget hurt us? Let me count the ways. In a global pandemic we let down the poorest in the world, the only country in the world to cut its aid programmes, and we did so in the most brutal way possible. Without notice, we cut research funding to some of the brightest and best in developing countries. Our cuts forced nutrition centres and health clinics to close. Our cuts led to water sanitation projects being cancelled. Our cuts mean that 78,000 healthcare professionals will be left untrained and millions therefore left untreated. Our cuts mean that over 700 million donated treatments are at risk of going to waste—et cetera, et cetera.
As if trashing our reputation for trustworthiness were not enough for this Government, we have now learned that they are toying with the idea of retaining part of the £19 billion from the IMF’s proposed drawdown for special drawing rights. These, although designed to add additionality to our aid and development programmes—
Indeed. They may instead be swallowed into the 0.5% ODA limit, so we will be seen as greedy as well as untrustworthy. Can the Minister assure me that that is not the Government’s intention?
In conclusion, the latest ICAI report is a damning indictment of the lack of transparency in UK ODA spending by the new FCDO, reversing the excellent reputation held by DfID.
My Lords, I thank the noble Lord, Lord Campbell.
During the recent G7 summit the UK Government committed $600 million in additional funding to the Global Partnership for Education in developing countries over the next five years, as the noble Baroness, Lady Sugg, mentioned. HMG went further in urging other nations to donate at least $2.75 billion to the GPE. That is welcome news but at least two questions immediately arise: has this contribution on the part of the UK been agreed and budgeted for, and how far will it replace the cuts imposed on female education programmes as a result of the reduction in ODA?
My concern remains Afghanistan. Violence in that country is increasing by the day. In the 24 hours from 20 June around a dozen districts fell to the Taliban, mostly in the north of the country. Since 1 May, when the USA officially began its drawdown, more than 50 districts out of a total of 400 have been taken by the Taliban. The combination of bombings, fear of attack and the ravages of Covid-19 are destroying considerable gains achieved in educating girls over the past 20 years.
Will the Government make a sustained effort to focus on the institutions of democracy? That must include schools as well as higher education bodies to demonstrate support for that vital democratic and long-term investment, and to give courage to those who continue to resist the Taliban by steadfastly keeping schools open and the teaching of girls alive. The Government know that educating girls is the single most effective pathway to overall development. We urgently seek reassurance that HMG are honouring their commitments to human rights, to open societies and to the education of girls.
My Lords, I echo the thanks expressed to the noble Lord, Lord Campbell, for this debate. There are many reasons for honouring the manifesto commitment to 0.7% aid, of which the Conservative Party can be proud. I will focus on just one.
Our National Health Service has done a fantastic job during the pandemic and been rightly lauded for doing so. One of the reasons for its success is its superb workforce, no fewer than 170,000 of whom are foreign, the vast majority from poorer countries which are struggling in the face of the pandemic. Figures show that Indians make up the largest number of foreign staff members at 27,000, followed by Filipinos at 23,000. Ghana provides over 3,000, Zimbabwe 4,500 and Pakistan 4,400. The fact is that we are taking more out of developing countries, when we poach their doctors, nurses and other skilled professionals, than we are putting in through aid.
I know from our close relationship in the diocese of Worcester with Morogoro in Tanzania how great is the shortage of health professionals in the developing world and how difficult it is to recruit, train them and pay for that training. Though the noble Baroness, Lady Harding, talks of reducing our reliance on foreign employees, Matt Hancock speaks of a new Windrush generation, to recruit the best from abroad. The Chancellor of the Exchequer has just been quoted as observing that it is difficult to justify the aid budget in the present circumstances. Is not the sad truth that, as we break our promise of 0.7% aid to the poorest in our world, we are taking more out of the developing world than we are putting in? Does the Minister agree that, in so doing, we are stymying the crucial effort to eradicate the pandemic worldwide, which we really should be ensuring happens?
The noble Baroness, Lady Young of Old Scone, has withdrawn, so I call the noble Lord, Lord Sarfraz.
My Lords, last week our permanent envoy to the UN said that the situation in Myanmar is fast becoming a humanitarian crisis and that 60% of healthcare facilities are not functioning. I have spoken to a number of NGOs on the ground, and their message is consistent. They are struggling with resources. I therefore welcome the Government’s announcement that we will reprioritise our spending towards urgent humanitarian needs in Myanmar.
I would be grateful if my noble friend the Deputy Leader could tell us what progress has been made on reducing our reliance on consultants and advisers in deploying our overseas development assistance? Looking across our portfolio, it is incredible that the same names appear over and over again. For example, take the Palladium group. It is hired by us to work on dozens of projects across the world. It operates in 90 countries and claims expertise in every aspect of development: healthcare, education, environment, infrastructure—it does it all. There are half a dozen organisations like it which are repeatedly mentioned across our country reports. We are propping up a development industry. Between them, they employ hundreds of consultants and grant writers. As a result, smaller, local, less polished but much more impactful organisations never get a chance to partner with us. They now need us more than ever before. As we reprioritise our commitments, let us also broaden who we work with; even if they do not have glossy presentations or host global development summits, they may well give us much more value for money.
The noble Lord, Lord Cashman, is unable to take part in the debate, so I call the noble Lord, Lord Bruce of Bennachie.
My Lords, I draw attention to my entry in the register as a corporate adviser to DAI and a consultant with the Westminster Foundation for Democracy.
Last year, official development assistance from all donors reached a record $161 billion. Most of the largest donors increased their aid budget as we were cutting the UK’s. Germany achieved 0.7% as we moved away, and Australia has reversed last year’s cuts. The UK is exceptional, but in a shameful way. The decision to cut aid is ideological and deeply damaging to the UK’s reputation and the needs of the world’s poorest. It undermines any credibility for the ridiculous and meaningless slogan “global Britain”.
What concerns me is the damage to the UK’s reputation and the long-term weakening of the UK’s development capacity. I have two examples. A long-standing flagship programme to transfer title to 14 million parcels of land to farmers in Ethiopia has been halted. Disgruntled with the UK’s betrayal of trust and determined to meet the needs of small farmers, the Ethiopian Government are looking to other donors. In Bangladesh, a strategic partnership with BRAC, established by DfID 10 years ago, has been cut. It is being continued by Australia and Canada but, without the UK, it will be cut by 30%. The UK’s aid programmes have been delivered flexibly and cost effectively by a wide range of large and small development partners, all of which fulfil a role. Faced with cuts at this scale and speed, some may fail. Others will let experts go or redeploy them to programmes with other donors.
The Government boast of a record economic bounceback, which will mean that we may miss even 0.5%. Will cuts be restored if that happens? Will we stay behind France and Germany in our delivery? They have taken over the UK leadership position. The problem is that, if the UK looks to get back its lead, capacity will not be available and previous ODA recipient countries might have found more trustworthy development partners.
My Lords, I declare my interests regarding malaria and neglected tropical diseases, as set out in the register. The UK has led globally in these two areas in the fight against death and disease and has been extremely successful in saving hundreds of thousands—indeed, millions—of children’s lives and preventing disease and disability. Yet the cuts that have been made have damaged programmes for both.
The cut to the UK flagship programme for NTDs, Ascend, will mean putting a stop to 151 million scheduled treatments this year, and the malaria programme in Nigeria, funded by the UK and SuNMaP 2, will now end two and half years early and will mean a huge deficit in the fight against malaria in Nigeria, one of the countries with the highest prevalence. Cuts to UKRI will take away the capacity in our academic institutions which have in the past provided the basis for the work that has been so successful in the vaccine development against Covid.
I hope that the Government will recognise that it is counterproductive both to their reputation and future capacity to fight disease and pandemics to cut spending in these areas. I further hope that, when the Global Fund replenishment comes up, they will make good these cuts and ensure that we have these basic health provisions that help not only us but the whole world.
My Lords, it is a pleasure to follow the noble Baroness, Lady Hayman, and I thank the noble Lord, Lord Campbell, for securing this debate. I commend particularly the contribution of the noble Baroness, Lady Sugg, who has shown her absolute commitment to those in need of our aid.
Let us run through where some of these cuts are falling and how we have found out about them. It is thanks to the UN Population Fund—UNFPA—that we know the UK Government are cutting their funding for its programmes by 85%, down from $211 million to $32 million. The UK Government are that organisation’s largest donor, a major supplier of contraceptives, other sexual and reproductive health products and some maternal and newborn health supplies. We provide contraceptives to about a third of users in some of the poorest countries.
We have learned about another cut from the World Health Organization. We will see millions of people at risk of dying from neglected tropical diseases—to which the noble Baroness, Lady Hayman, just referred. These diseases mostly affect people in the poorest countries. This is a particularly disgraceful, disgusting waste: some 280 million tablets are likely to expire and have to be incinerated because of the withdrawal of this money.
From the World Food Programme, we learn that in Yemen, considered to be the world’s worst humanitarian crisis, will see a cut of nearly 60% in UK aid. Nearly half the population—13.5 million people—is already struggling to get enough food, and that is expected to rise by 3 million by the end of this month.
So what gender assessment have the Government carried out of their decisions? Will they publish a gender assessment? Will it publish a poverty assessment? How is it that this seems to be hitting what is perhaps the 1% of the world’s poorest people? Has it actually been targeted at women and the poorest?
My Lords, I, too, congratulate my noble friend on securing this timely and extremely important debate, and commend him on his powerful opening speech this afternoon.
On Monday this week, the Prime Minister set out his ambition to make the UK a science superpower, yet these cuts not only undermine current and future science research but that very ambition. Many projects will have funding cuts midway through, leaving them unable to complete critical work such as vaccine development or fighting future pandemics through AMR research. This means that millions of pounds worth of British taxpayers’ money which has been invested in those projects now risks being lost. Making cuts at this most critical time, particularly given the opportunity for leadership through the G7 and COP 26 presidencies, risks damaging the UK’s position on the global stage.
Innovations for global public health need public funding, because there is no incentive for private research. We should recall that it was innovations such as work on malaria vaccines which helped lead to the Oxford/AstraZeneca vaccine. This research, long funded by UK ODA, has built a depth of expertise in infectious disease vaccines that is almost unparalleled. Does not the Minister agree that there is a very real risk that such innovation will not be there when we need it in future if we do not fund it now? In the wake of Covid-19 and with budgets tightening around the world, does not the Minister further agree that applied health research is exactly what is needed right now to make our limited budgets go further?
My Lords, I welcome this debate and thank the noble Lord, Lord Campbell, and other speakers for their important contributions today. I shall keep my comments brief: most points have already been covered.
During the gracious Speech, the Government committed to provide aid where it has the greatest impact on reducing poverty and alleviating human suffering, but rather than providing aid where it has the greatest impact there, the Government have cut global health spending by up to 40%, affecting people of all ages. This is occurring at a time when the pandemic is having the greatest impact on low and middle-income countries. Specific health initiatives have been devastated by these cuts and are sure to set development back enormously. These include a 95% to polio eradication, a 90% cut to addressing neglected tropical diseases, an 80% funding cut to UNAIDS and a reduction of 80% to addressing WASH programmes providing water, sanitation and hygiene to people in poorer nations. How is this increasing the UK’s ability to strengthen relations globally and to meet its commitments to help younger and older people in poorer countries?
Development aid is not purely an act of charity. By limiting the spread of deadly diseases such as AIDS and Covid in poorer nations, we help keep our own country safe. In the recent resurgence of nationalism in this country and elsewhere, we have, sadly, seen a less internationalist or global approach by this Government. I conclude by remarking that we live in a global society where it is in everyone’s interest to eradicate poverty and prevent the spread of deadly diseases. If we reduce our international development contribution as a nation, we do so at our own peril.
My Lords, I thank my noble friend Lord Campbell of Pittenweem for asking this Question and outlining it so clearly and powerfully. Many of his points were supported by those taking part in this short debate.
The noble Baronesses, Lady Bennett and Lady Greengross, referred to the relatively little-noticed but devastating submission by the World Health Organization to the IDC in the Commons, which referred to the set of 20 neglected tropical diseases which
“affect the poorest people in the poorest countries”
“kill, blind, disfigure and maim, causing considerable and largely untold suffering to millions of people worldwide.”
The submission goes on to say that,
“as a consequence of the aid cuts, 20,000-30,000 individuals are likely to die, with the uncertainty in that estimate related to expected recent increases in disease incidence due to COVID-19-related programmatic delays.”
“the withdrawal of UK funding makes it likely that an estimated in-country inventory of”
277 million tablets
“donated by British and international pharmaceutical companies will expire and need to be incinerated”.
Can the Minister commit that no tablets meant for the poorest people in the world will be destroyed as a result of these cuts? That is my first question.
My second question relates to something that the Leader of the House was unable to provide me. Last week I asked her, as a member of the Government, to do something which members of the British Government have been doing for 25 years, which is to encourage the other richest countries in the world to meet their UN target of 0.7%. She was unable to do that, so I would like that reassurance in this debate today that it remains the position of the Government that we are encouraging all other developed countries to meet their obligations, which this Parliament enshrined in our law.
My Lords, the short answer to the question posed in this debate is: none. To refuse to publish full information on the cuts as well as any kind of impact assessment illustrates how reckless the decision is. The noble Baroness, Lady Sugg, was absolutely right to ask her question and I hope the Minister will confirm specifically when the equalities impact assessment will be published, given that many of the cuts fall on programmes relating to women and girls. Although the full extent of the cuts is not clear, totalling over £4 billion, we know that aid to Yemen is cut by 60%, humanitarian relief to Ethiopia is cut by 95%, and child nutrition projects are cut by 80%. When will the Government introduce legislation to abandon the 0.7% commitment in the International Development Act? It is shameful that they are still blocking a Commons vote on this issue.
The donation of surplus Covid-19 vaccines is welcome. The Prime Minister has confirmed that the value of donated doses will be additional to the £10 billion ODA budget in both 2021 and 2022. However, with the economy expected to rebound, it is possible that a 0.5% ODA budget will exceed £10 billion. Will the Minister therefore confirm that this means that those doses will be offered in addition to the 0.5% of GNI? Can he also indicate whether the Government have responded to proposals by the ONE campaign to accelerate the timeline for sharing those doses, which is vital in the current situation?
My Lords, I begin by thanking the noble Lord, Lord Campbell, for tabling this Question and for the long experience that he has brought to bear on the subject before us. I add my thanks to all other speakers for delivering so many insightful contributions in such a restricted speaking time.
I say first to the noble Lord, Lord Campbell, that the move to spend 0.5% of our gross national income on official development assistance was a far from easy decision. It was taken in response to an extreme economic and fiscal situation, which last year saw the highest peacetime levels of borrowing on record—£300 billion—following the seismic impact of the pandemic. This year we are forecast to borrow a further £234 billion with another £109 billion the following year, and these unprecedented circumstances have forced the Government to take unprecedented action. Noble Lords will be aware from previous debates of the extraordinary support that we have provided to the UK economy, to jobs and business, on top of the need to balance multiple departmental priorities.
Nevertheless, in spite of the reduction to the ODA budget, it remains the case that the UK will spend £10 billion on overseas development assistance in 2021 and, in looking at how best to deploy that large sum, Ministers have been clear on two counts: first, that we should allocate our aid budget in accordance with our key strategic priorities and, secondly, that we ensure—as we always endeavour to do—that every penny of our aid brings with it maximum strategic coherence, maximum impact and maximum value for taxpayers’ money.
The FCDO is now working through what that means for individual programmes, in line with the priorities that we have identified. Those priorities are seven in number: climate and biodiversity; Covid and global health security; girls’ education; science and research; open societies and conflict; humanitarian assistances; and trade. Inevitably, for the period when we spend 0.5%, there will be reductions across all regions and sectors, compared to what we would have spent under 0.7%—but because of our priority setting, not all sectors will see the same percentage reduction.
In working through the allocations, Ministers have been mindful of the impact on four groups in particular: women and girls; the most marginalised and vulnerable; people with disabilities; and people from other protected groups. In that context—and this answers my noble friend Lady Sugg—the FCDO has carried out a central equalities impact assessment across our bilateral country spend, looking at risks and impacts, and this has been considered by Ministers as they reviewed plans. The Foreign Secretary is considering carefully whether to put the central overarching assessment into the public domain. As she said, the central assessment showed no evidence that programmes targeting those with protected characteristics were more likely to be reduced or discontinued than other programmes.
I cannot yet specify in any granular detail what our planned spend will be this year, either by project or by country. Given that we are in a one-year spending settlement, the FCDO’s planned country allocations will be published in our annual report later this year in the usual way; in addition, and as always, we will continue to give monthly updates of our spend by project on the development tracker.
Contrary to the impression gained by the noble Lord, Lord Campbell, none of these decisions on country and project allocations is being taken in a vacuum. The FCDO has engaged with NGOs and others and listened to feedback on the impact of the reduction in spend. FCDO Ministers engage with more than 80 NGOs, partners and parliamentarians, including through a round-table discussion with civil society. In the allocations process, we engage partners on the underpinning evidence, on priorities for delivery and to gather essential information. Now that the process is complete, we are working with our host countries, international partners and supply chains to deliver the budget changes set out in the Written Ministerial Statement published on 21 April.
Here it is worth my making the point that the creation of the Foreign, Commonwealth and Development Office has moved the coherence, efficiency and effectiveness of our decision-making in a very positive direction. The departmental merger has aligned our development work with our diplomatic clout and in so doing has improved development outcomes.
While I cannot yet give precise figures for the year ahead, I should like to provide the Committee with what figures I can. First, despite the budget reduction, we will be investing £400 million in girls’ education in over 25 countries this year. That is in addition to our pledge of £430 million to the Global Partnership for Education over five years. This is our largest ever pledge to GPE and an uplift of 15% from our current position as top bilateral donor.
On global health, we will donate at least 100 million surplus coronavirus vaccine doses within the next year, including 5 million beginning in the coming weeks. This donation is in addition to the Government’s work to support Oxford/AstraZeneca’s contribution to fighting Covid. I can say to the noble Baroness, Lady Hayman, that the £548 million that we have already committed to COVAX as one of the scheme’s largest donors will help it to deliver more than 1 billion vaccines to up to 92 lower-income countries this year. We also have a long-standing commitment to Gavi, as she knows, which will continue.
On climate change, we will deliver more than £1 billion of international climate finance activities this year as part of our flagship five-year £11.6 billion target. Our themes in this area include promoting clean energy, halting deforestation, preventing biodiversity loss and supporting countries damaged by the effects of climate change.
All of that means that this year, 2021, the UK will be the third largest overseas development assistance donor in the G7 as a percentage of GNI, based on data in 2020 from the Organisation for Economic Co-operation and Development. In 2021 we will also be the third highest bilateral humanitarian donor country, based on OECD 2020 data. Even at 0.5% of GNI, the UK’s 2021 spend is above the preliminary 2020 average of OECD development assistance committee member states, which was just 0.41% of GNI.
The noble Baroness, Lady Sheehan, took the Government to task for a lack of transparency, as alleged in the report from the Independent Commission for Aid Impact. The Government have provided relevant documents and information as part of the follow-up review where those have been available. The FCDO remains committed to full transparency in our aid spending; for example, throughout the pandemic we have continued to publish our spend information by project through DevTracker. However, the impact of the pandemic has been seismic around the world and we have therefore pivoted our resources to our Covid-19 response to help the most vulnerable. That resulted in some information not being available during the period in which ICAI carried out its follow-up review.
The noble Lord, Lord Campbell, referred to his connection with HALO and to its remarkable work in demining. Although there will be a reduction in financial support compared with the previous financial year, we remain a leading donor in the sector and our work will continue on the same lines affecting livelihoods across the world, supporting those most in need. We have assessed that over a four-year period we will be spending over £146 million in this area, including £21 million this year.
My noble friend Lord Sarfraz asked about consultancy. In 2020, DfID and the FCO contracted over £1.5 billion in development assistance with businesses, universities and NGOs. These contractors provide programme management, technical assistance and specialist advice to partner Governments, complementing our in-house expertise to deliver the UK’s world-beating development programmes. As the FCDO, we explore allocations to make the best use of both our in-house expertise and the services that we procure to deliver world-beating programmes.
The noble Baroness, Lady Bennett, referred to the UNFPA. The UK is fully committed to the mandate of the UNFPA, including its work on sexual and reproductive health. We remain committed to ensuring that women and girls have access to life-saving reproductive health supplies, and we highly value our partnership with the UNFPA on this important agenda.
The noble Baroness, Lady D’Souza, spoke of the situation in Afghanistan. On 14 April, as she knows, NATO announced that its forces would leave Afghanistan within a few months. Since 2002, the UK has supported the country with £3.3 billion worth of aid in various forms. We remain committed to supporting Afghanistan, including its efforts to counter terrorism, through our diplomatic and development work and support to the security sector. It is interesting to note that, alongside our NATO allies, the UK has built and equipped security institutions and has trained 5,000 cadets, including over 300 women.
The noble Baronesses, Lady Sheehan and Lady Greengross, touched on the important issue of water sanitation and hygiene. I can tell them that our support for global health, which embraces many aspects of WASH, remains a top priority for the UK aid budget. The FCDO plans to spend over £1.3 billion on global health this financial year and we will rightly focus on the international response to Covid-19. The FCDO is planning a strategic shift of our water and sanitation programmes, from supporting the direct delivery of WASH facilities at a household and community level, to instead strengthening national WASH systems that are able to deliver inclusive, sustainable and resilient WASH services at scale.
The noble Baroness, Lady Sheehan, also questioned our commitment to global health. That commitment should not be in doubt. Our aim is to help end the pandemic, strengthen global health security and end the preventable deaths of mothers, newborn babies and children. We are committed to those causes.
Regarding malaria, I say to the noble Baroness, Lady Hayman, that the UK is a long-standing donor on malaria. We remain committed to stamping out this deadly disease. We are a leading investor in malaria research. The Global Fund, as she knows, allocates 32% of its budget to malaria and we have committed £1.4 billion to the Global Fund.
The noble Baroness, Lady Bennett, referred to our aid to Yemen—I am being told I have only one minute left, so I must undertake to write to her on that. Suffice to say that we are deeply concerned at the moment by the crisis in Yemen and we are working with international partners and the UN special envoy to find a peaceful resolution to it.
The noble Baroness, Lady Suttie, referred to the importance of R&D funding and I fully agree with her. She may like to know that we will spend 4% of the whole UK ODA budget on science and technology and the FCDO will spend £253 million on R&D.
I will write to other noble Lords whose questions I have not had time to answer, particularly the noble Lord, Lord Purvis, on his question about the potential destruction of tablets and the noble Lord, Lord Collins, on the question of vaccines and additionality.
The seismic impact of the pandemic and the current unprecedented economic and financial circumstances have forced the Government, as I have said, to take difficult spending decisions. But, as my right honourable friend the Prime Minister has emphasised, this is a temporary departure. He, the Chancellor and the Foreign Secretary are as one in wanting to return to spending 0.7% of GNI on overseas development assistance as soon as fiscal circumstances allow. I wish that I could help the noble Lord, Lord Collins, with his question on when that will be, but no one can yet predict with certainty when the current financial circumstances will have sufficiently improved. We are monitoring the situation all the time and, clearly, we will make plans accordingly. However, I can assure him and the Committee that the UK remains and will remain indissolubly committed to poverty reduction and international development around the world. To that end, we shall ensure that the £10 billion allocated to our overseas aid programmes this year delivers a transformational impact consistent with our interests and values, of which all of us in this country can be proud.
My Lords, the Grand Committee stands adjourned until 5.45 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for the next debate is one hour.
Child Maintenance Service
Question for Short Debate
My Lords, in the few days since I secured this debate, I have been contacted by a large number of organisations and individuals expressing strong views based on very difficult experiences as either paying or receiving parents in the child maintenance system. The parliamentary digital engagement team did sterling work to publicise this debate and elicit testimony from the public to inform it. I am very grateful to every one of the 1,524 people who took the time to respond and I hope to do some justice to their stories in my remarks.
That the number using the Child Maintenance Service across Great Britain is high is unsurprising, given that an estimated third of all children grow up in separated families. In December 2020, the Department for Work and Pensions reported that 756,500 children—roughly equivalent to the whole populations of Bristol and Newcastle cities combined—were covered by CMS arrangements. This fairly small cohort of speakers today does not represent the importance of child maintenance reform to those directly involved, their extended families and wider society. At least we will have longer to unpack properly our concerns in this highly contested area of policy. To quote Professor Patrick Parkinson, a key architect of the Australian child support reforms, it
“involves making compromises between the conflicting interests of mothers, fathers, children and the state … A win for one interest group … is a loss for another. Child support policy is a complex and contentious area involving zero sum calculations in political terms.”
No pressure then, Minister.
The contention is wholly understandable: the process of separation, however amicably achieved, is usually emotionally and financially stressful. A once-intimate relationship undergoes significant change, sometimes at the behest of one partner and strenuously resisted by the other. The indissolubility of parenthood and the important shift away from clean break divorce mean that both parents will still need to co-operate, at the very least around money and contact.
History has taught us there are no silver bullets and a whole host of potential unintended consequences when it comes to reforming child maintenance. Nearly 40 years ago, the seminal Finer report proposed a dedicated agency for administering maintenance payments. The ground lay fallow until 1993, when the Child Support Agency first opened its doors following the Child Support Act 1991. Just two years later, more legislation was required to fix its considerable problems, setting the tone for the sporadic reforms that produced the current system, in place since 2012.
We appear overdue for another wave of change, especially as universal credit is now a much more mature welfare system. The interaction of benefits with child support payments is a particularly salient issue. A reformed child maintenance system must do even more to ensure that paying and receiving parents, and the children both are raising, albeit not under the same roof, are not living in financial poverty as a result of its operation.
Looking briefly at how the current system works, many separated parents agree and adhere to private family-based arrangements. The Child Maintenance Service, which replaced the Child Support Agency, is for parents who have been unable to do this. Around two-thirds of children are covered through direct-pay arrangements, where the CMS calculates maintenance liabilities and parents arrange payments between themselves. A third are covered through collect-and-pay arrangements, where the CMS collects and manages payment between parents. Paying and receiving parents experience this system very differently, as evidenced in responses to the parliamentary survey. Almost half were from paying fathers and almost all the receiving parents, 40% of respondents, were mothers.
Emerging themes from this exercise map on to those in the academic literature and other cases I was sent. First, paying parents highlighted how the nature of CMS calculations could lead to financial hardship, which was unalleviable by working longer hours, as any additional money would be directed towards child maintenance. The Social Security Advisory Committee recently asked the DWP to examine ways of improving the child maintenance formula and its link with earning thresholds to address such concerns. My first question to the Minister is this: has there been any progress on this issue, given the DWP’s commitment to inform future policy development with the views expressed in SSAC’s consultation?
Secondly, as the receiving parent obtains less money if children stay overnight, this can disincentivise sharing care. Thirdly, and correlating with these previous two themes, paying parents reported impacts on their mental health, suicide attempts and suicidal thoughts. Fourthly, many reported issues with customer service, errors in calculations and inconsistencies, as did many receiving parents.
Three other areas stood out among receiving parents’ responses. First, they were dissatisfied with the effectiveness of action taken to collect payments. Secondly, they felt inadequately safeguarded in situations involving domestic abuse; for example, the continuation of control by withholding payment. Finally, self-employment and zero-hours contracts were deemed to create loopholes, so paying parents could hide income. I hope other noble Lords will go into more detail on this wide range of issues, which I have been able only to touch on, and suggest solutions to the Minister.
Paying and receiving parents diverge in what they perceive to be acceptable ways of resolving systemic difficulties. For example, internationally, many child support systems now rely on both parents’ income when determining liabilities, where most women work. In the parliamentary survey, 93% of paying parents said both parents’ incomes should be included, compared to 18% of receiving parents. Admittedly, counting mothers’ income can reduce incentives for workforce participation, but changes in Australia actually increased incentives for more qualified mothers, such as nurses and teachers, to return to work or increase hours. Their reforms, which have helped diminish the extent to which child support is a source of mass grievance, required designing a markedly complex formula, which had to be fair across a broad cross-section of circumstances. This took an expert committee eight months and significant research. A similarly intense process would be required here.
The other health warning is that, as child support systems interact with a country’s welfare system, translating ideas from one jurisdiction to another is always problematic. However, can my noble friend say whether the Government have any plans to consult on the merits of aligning Great Britain to other child support systems by including both parents’ incomes?
Finally, one theme that did not emerge in the survey but was raised by the Social Security Advisory Committee in 2019 was whether separated parents are getting the support that they need through a challenging and stressful time in their lives. The committee pointed to the need for an overarching, joined-up government strategy for separated parents, covering all relevant departments and child maintenance. Necessary, but not sufficient, is the commendable cross-departmental work to reduce parental conflict.
I declare my interest as a director of the Family Hubs Network and say that access points to services offering far more holistic support could be provided in the family hubs that the Government have promised to champion. Such access was instrumental to the progress made in Australia: family relationship centres, integral to its 2006 family law reforms, provide a gateway to the many different kinds of advice and support that parents need. The germ of such an idea was in our own landmark Children Act 1989, which specified that local authorities should provide family centres, where families could get help to overcome difficulties, including when parents separate. Can my noble friend the Minister inform the House how different departments of government are working together, including to deliver family hubs?
In conclusion, child maintenance will always be a system under scrutiny or being “reformed”, but state action must also be accompanied by a cultural shift in attitudes towards parental responsibility. We need to get to a place where there is a strong and pervasive expectation that, first, both parents will always share the cost of raising children, and, secondly, with the holistic support that I have described, they will sort out the thorny post-separation issues that stem the flow of child maintenance.
My Lords, my link with this service goes back a long time. When I became Lord Chancellor in 1987, I quickly discovered that many parents who had been deserted had been successful in getting orders from the court for maintenance. But, unfortunately, no sooner had they got the order than the husband disappeared, and they had no resources available to them to try to find out where he was or to raise the money that was due. Needless to say, his attitude was not to come forward—that was not his business; his attitude was to hide himself as much as possible.
I found this an extremely difficult problem. By that time, I knew a little bit about Northern Ireland, which had a state system for enforcing decrees of the court. It seemed to me that this was what we would need: some form of state system that helped to find the person in question and formulated the responsibilities that he had. Eventually, this became government policy in the Act to which my noble friend Lord Farmer has already referred, which set up the Child Support Agency.
As the Lord Chancellor at that time, I had responsibility for divorce law, and a question arose as to whether we should take into our department the necessary work to set up the computer necessities of the CSA. My department very wisely suggested that that was better done in the department that my noble friend represents today. That was very wise advice. Originally, it was thought that this new organisation, with its mighty computer, would be able to adjust the requirements of each case according to the circumstances; but, first of all, that was a very major task, and, secondly, the circumstances changed very rapidly, and therefore quickly became out of sync with the requirements.
The real difficulty in arrears from that source was the arrears of the CSA following the paying parent. It took a long time to get around that problem, with the gradual simplification of what was done via the computer—in the end, it became a job that depended on help with the revenue and so on, and with the fixed sum which was due by the paying parent in respect of the child. That shortened the process quite a bit.
Unfortunately, divorce arrangements remained the responsibility of the Lord Chancellor’s Department. It is now the responsibility of the Lord Chancellor and the Ministry of Justice to adjust the kind of arrangements that will be needed to adjudicate on these where necessary. My view is that it is important that a separation happens with as little animosity as possible. Animosity is a natural reaction to it in many quarters, and a degree of help is needed to overcome that. At the moment, I think that is with the Lord Chancellor’s Department, along with the process of mediation and so on, which we discussed so fully all those years ago in the original proposal for no fault.
I have never seen how allegations of fault get rid of the animosity, because it is very seldom that the parties are agreed about what happened. People who can tell what actually happened are rather scarce, because they will not have been there on most occasions when animosity is shown and the basis for fault arises. It seems to me that that kind of investigation must be in a higher court than any that we can have; it is a matter that should not be allowed to blossom in our system, as I think has now happened.
Collecting money is still an important matter. So far as I can see, at the moment, it is a distinct factor and function in trying to resolve problems with the family. I was very concerned about this when our first Conservative Government after I left office came into power. I was anxious about the arrangements that were made, as they seemed to be fairly heavily disposed against the receiving parent, as well as the paying parent. I am glad to see that the system now operating is 20% extra to the paying parent and 4% to the receiving parent, but I still find it very difficult to accept the view that, because of the attitude of the parents, this particular system is required to achieve payment. The difficulty is that the 4% is really coming off what is due to the child—
Yes, I shall wind up quickly. I understand that the difficulties in the present business of sorting out the money have created the difficulty that my noble friend Lord Farmer referred to, and which I mentioned in my communication with the Minister. I do not know whether it is true or not, but I think it is worth considering.
My Lords, I am pleased that the noble Lord, Lord Farmer, is continuing his efforts to find information on and a resolution to the issue of child maintenance, and I thank him for his comprehensive introduction. It is always a great pleasure to hear the noble and learned Lord, Lord Mackay of Clashfern, share his knowledge and experience, and I thank him too.
This is a vital issue affecting thousands of children and blighting some family relationships. Parental tensions, for whatever reason, affect a child’s stability and mental health. Unclear or unfair systems of support for families cause such tension. We need to ensure child-friendly arrangements for child maintenance. As the UN Convention on the Rights of the Child states, the welfare of the child is paramount.
In 2019, the Social Security Advisory Committee published a report examining separated parents and the child maintenance system. It raised concerns about the formula used to calculate child maintenance. For example, the formula did not reflect the true cost of raising a child—regional variations or the age of the child are implied—and not reflecting the household earnings of the receiving parent. A paying parent may be on a low income and struggle with costs and a receiving parent may have partnered with someone on a higher income. The reduction in payments for overnight stays with the receiving parent may create perverse incentives. Maintenance payments are reduced if the paying parent has their child stay overnight but are not enough to cover the fixed costs of looking after children, including needing a spare bedroom.
I understand that the National Audit Office is carrying out a consultation to examine whether the child maintenance system is
“delivering value for money for children, separated parents and the taxpayer.”
What is the progress on this?
I have just completed a report for the Council of Europe on the impact of Covid-19 on children’s rights. I interviewed a number of people—professionals, politicians and children—to inform my concerns. There was a general consensus that family tensions could result, in the extreme, in violence against children, domestic abuse and harm to child mental health. Child poverty was one cause. All countries, of course, have different attempts to combat poverty and other family difficulties. Our situation in the UK seems particularly complex. A contributing factor to family difficulties could be arrangements for child maintenance, and it is important to get them right.
I hope that in this debate, we shall receive more information about the impact of government reforms in creating the Child Maintenance Service: for example, the charging for both parents and the notion of pushing parents to make private arrangements rather than use the CMS at all. I wonder how many parents are making private arrangements. It seems that there is no responsibility for collecting child support money unless the parents have tried a direct payment arrangement and it has failed. So what next? What do the statistics say? I realise that more are due very soon. When will we see a dynamic development plan from the DWP? Perhaps the Minister can comment.
The CMS has many problems. I will name a few and will be interested to know what the ways of dealing with this could be. First, the collect-and-pay service charges a large fee to administer payments between parents, yet evidence shows that missed payments are spiralling into millions of pounds. What can be done to prevent this?
We know that many single parents are struggling, and this has become more intense during the pandemic, Many are in severe financial difficulties. How will the department address this?
How many staff were redeployed at the beginning of the pandemic from their CMS roles? What has happened to those staff?
How is enforcement action being carried out? Are video interviews in place? If so, what is the reaction from parents? A quarter of paying parents are not paying towards their liabilities. What action is being taken to redress this?
What is the most recent estimate of current arrears owed from missed payments during the Covid crisis, and what plans will be put in place to resume reinforcements, and how? Is there a timeline for when paying parents will be reimbursed?
How will the DWP deal with staff shortages? I believe that there are now reduced assessment periods for parents. How will this affect changes in earnings, especially given the risks of unemployment, such as during Covid?
It is essential that the statutory child support body is properly funded and functioning well. Is the Minister confident that the problems I have mentioned can be resolved to the benefit of parents and children? I very much look forward to hearing her response.
My Lords, I thank my noble friend Lord Farmer for initiating this debate.
Only yesterday I read a rather distressing case of a father who feels that the service has treated him unjustly, left him in a poor financial position not of his making and caused him to lose his job. It left me wondering how many feel the same way. I suppose it is inevitable that some couples will be unhappy with what they regard as unjust arrangements, but does the Minister have any idea of the extent of these problems and how readily they can be put right? For instance, is the appeal system straightforward?
Could the Minister tell us about the progress of the Government’s commitment to supporting parents to make family-based collaborative arrangements, which free them from having to pay the Child Maintenance Service? Could she update the House on the surveys that were commissioned looking at direct-pay and case-closure clients?
As the rates of family breakdown are the reason why so many children are living in separate homes, should we not be focusing on preventing this situation? We need an effective campaign to strengthen families before, during and after separation in order to minimise the effects of unresolved and damaging conflicts.
My Lords, I join the other speakers in thanking my noble friend Lord Farmer for initiating this important debate.
The fact that £1 billion is secured by this service for the benefit of children, lifting 120,000 children out of poverty every year with child support payments, is hugely welcome. The statistics show that 756,000 children are covered by Child Maintenance Service arrangements. I am especially pleased to learn of the success of the CMS investigators who, through the courts, pursue fathers who try to avoid supporting their children when they are financially well able to do so.
Some recent reforms to the service are most welcome, including the “apply online” service that is available every day throughout the year. It is encouraging that the service is consulting until August on additional proposals to modernise and improve the service, and that it is continuing to keep child maintenance policy and operational delivery under review.
That large numbers of children are supported by the service is good news but it is also a sad reflection on the number of relationship breakdowns that have occurred, putting children in this position. It is important that we recognise the very valuable work being done through the Government’s Reducing Parental Conflict programme. If help can be given at the start of relationship breakdown, the conflict can often be reduced. Too often the Child Maintenance Service has to deal with two people who hate each other, which makes complex circumstances more difficult when arranging child maintenance payments.
Additionally, it is good to see the support being given by the Government to the family hubs, so ably mentioned by my noble friend Lord Farmer. The support that families can receive from the family hubs is hugely beneficial. They are sometimes described as the place that starts the repair. The general public often hear a narrative of uncaring non-resident parents refusing to meet their obligations to help to provide for their children. I know that in many cases the reality for parents on low incomes is very different.
I ask my noble friend the Minister to look at what appears to be a flaw in the regulations. I am a great supporter of universal credit, which makes work pay, but the interaction with child maintenance appears to undermine UC. This point has been referred to in two reports by the Centre for Social Justice, in 2014 and 2018, and by the Social Security Advisory Committee in 2019. The problems arise from the basic structure of the scheme. The basic rate of child maintenance is a percentage of the income of the non-resident parent. No self-support allowance—a deduction from income to allow for essential living—is included; the liability is a percentage of the whole income.
The schemes in 2003 and 2012 were set up without reference to the system of welfare support. The interaction between welfare support and child maintenance is problematic. The child maintenance scheme has two thresholds. Below the first threshold, parents pay only a nominal amount—a flat rate—and, above the second threshold, they pay the full basic rate amount. In between, there is a catch-up region where parents have to pay a larger percentage of each pound earned—the reduced rate—so that the full basic amount is paid by the time the second threshold is reached. The parents paying the reduced rate can be worse off for every £1 earned, and parents paying the basic rate are only a few pence better off for every £1 earned. In effect, those parents get no financial benefit for being in work. The better option for them is to be unemployed.
It is also interesting to note that the values of the two thresholds were decided in 1998 and have not been changed in the 23 intervening years. In 1998, it was decided that a non-residential parent should not pay more than a nominal amount of earnings—less than £100 a week—and not pay the full amount until earning more than £200 a week. These thresholds no longer make sense in terms of affordability, but changing them will not resolve the issues of the 2003 and 2012 arrangements.
A great deal of very positive work is being achieved by the Child Maintenance Service, but I urge my noble friend the Minister to look at these flawed regulations.
My Lords, I remind the Committee that, a long time ago, I was a non-executive director of the Child Maintenance and Enforcement Commission and, even longer ago, chief executive of One Parent Families.
I am grateful to the noble Lord, Lord Famer, for securing this debate, as we rarely get to discuss child maintenance, which is really important. His opening speech began with a history lesson, capped fascinatingly by the noble and learned Lord, Lord Mackay of Clashfern, who reminded us just why we need an effective statutory Child Maintenance Service—a cause he has long championed. The noble Lord, Lord Farmer, also gave us a tour d’horizon of many of the key policy issues relating to child support, with the noble Baroness, Lady Eaton, offering some more in her contribution.
I will focus on more operational questions, but I start by agreeing with the noble Lord, Lord Farmer, that it is important, wherever possible, that both parents should contribute towards the cost of bringing up children after a relationship has broken up. Children are a lifelong responsibility for their parents, and it can be important for them to know that both parents continue to support them. I also agree with the noble Lord, Lord McColl, about the importance of good support for families at every stage.
There is also clear research evidence demonstrating the role that child maintenance can play in helping to lift single parents out of poverty. This is really important, given that we went into the pandemic with 4.3 million children living in families in relative poverty. Given the scarring effect in later life of living in poverty as a child, the stakes are very high.
Ministers often say that work is the best route out of poverty, but working poverty is now at a record level of 17.4%. Interestingly, a recent IPPR report found that the poverty rate for couples with one full-time earner is now 31%. Since single-parent households tend to have just one earner, it is perhaps not surprising that almost half of children living in single-parent households are in poverty. But if a single parent is already working full time, they cannot really make much more money by earning more, so getting maintenance paid in full and on time may be their best chance of lifting their children out of poverty.
Unfortunately, too much maintenance goes unpaid, and it must be said that the Child Maintenance Service has not had a good pandemic. That is not a reflection on the hard-working staff of the CMS. When Covid hit, a large number of staff were redeployed away from the CMS to help process universal credit claims. Can the Minister tell us how many? My noble friend Lady Massey of Darwen was pushing on that as well. I understand the need for more staff processing universal credit claims, but single parents paid the price for that. Victoria Benson, CEO of Gingerbread, said that for much of the pandemic, the CMS was
“running a skeleton service, meaning they are now as a rule not enforcing payment and are allowing paying parents to reduce or withdraw maintenance payment without any proper evidence.”
Single parents are still complaining to Gingerbread that CMS is not enforcing child maintenance owed to them.
I looked up the last official child maintenance statistical report, which covered the last quarter of 2020—it came out on 23 April, so we are due another one any day. It said that the CMS had resumed virtually all areas of service delivery and was now focusing on the recovery and enforcement of outstanding arrears. Can the Minister tell us what the current situation is? Is CMS now operating a full service in all areas? Is it using its full range of enforcement powers? Crucially, are there as many staff now in the CMS as there were before the pandemic? Does it have a plan for tackling those arrears?
My noble friend Lady Massey raised the question of the reduction in the period of time for considering a paying parent’s maintenance liability where their income had changed because of Covid. That was cut from 12 weeks down to two. It protects paying parents but of course hits receiving parents. CMS said it will revert to 12 weeks as soon as possible. Can the Minister say whether that is still in force and, if so, when will it revert?
The statistics show that in the last quarter ending December 2020, of paying parents who pay via collect and pay 50% paid over 90% of their child maintenance—that counts as fully compliant; 22% paid something; and 28% paid nothing at all. Does the Minister think that is acceptable? If not, is there a target to improve it? We need to look at those stats in light of the fact that more people have moved on to benefits; they are more likely to pay child maintenance as it is knocked directly off their benefit payments before they get it. Indeed, 40% of all collect-and-pay cases now involve deductions from benefits, whereas it would normally be more like 21% to 24%. So that is flattering the compliance rates.
What about the amounts? In the quarter to September 2020, the statistics say that £41.1 million was paid through collect and pay. But by the last quarter, when things were allegedly back to normal, that went up only by £1 million. That seems to leave £15.2 million of maintenance uncollected in that quarter alone. That is £15 million that could have been spent on feeding and clothing children.
Since 2012, when the Government created the Child Maintenance Service, £395 million in unpaid maintenance is owed through collect and pay. That is roughly 9% of all the maintenance ever due to be paid since the new service started. The Government closed down the previous service, reformed the system and created what we have now. It is their baby. Are they happy with how it is doing?
That is just those who get into the statutory system. Like my noble friend Lady Massey and the noble and learned Lord, Lord Mackay of Clashfern, I worry about the impact of charging and I would also like to know how much maintenance is being paid through private arrangements.
Finally, a consultation was launched just last Friday on making some changes to CMS. I read that the proposals are to change how unearned income is treated, to enable the writing off of low amounts of debt, to allow CMS notifications to be sent digitally, and some other stuff about who has to provide information. Can the Minister tell us whether all those changes which the consultation is addressing can be made in secondary legislation? Will the DWP analyse the responses to the consultation before it publishes the draft legislation? I know that sounds obvious, but it does not always happen. The NAO is also preparing a report on the CMS. Will the department await the final NAO report before making any changes?
Child maintenance matters to parents and to society but, above all, it matters to children, since, as my noble friend Lady Massey always reminds us, the welfare of the child is paramount. We owe it to our children to have a well-functioning, supportive system of child maintenance in Britain. I look forward to the Minister’s reply.
My Lords, I thank the noble Lord, Lord Farmer, for his question, which has led to this important, albeit short, debate. I also thank all noble Lords who have participated and made many excellent points. I completely agree with the noble Baroness, Lady Sherlock—indeed, we all agree—that this is an important subject and area of work. In summing up, I will try to address as many of the points made as I can. If I cannot address all of them, I will write to colleagues in detail.
I hold surgeries every quarter with MPs from the Commons, and for all MPs who have written to me personally about cases, I have dealt with each and every one. So I commit to organising an all-Peers child maintenance session so that we have the time after this debate to get into the detail, as I know all noble Lords want to do.
My noble friends Lord McColl and Lady Eaton wanted to know that the child maintenance system is working. We continue to keep the child maintenance policy and our operational delivery under constant review. I was pleased that my noble friend Lady Eaton referred to the new digital services, such as the apply online service that has been introduced; it has reduced average application times, is available 24/7 and allows greater flexibility for separated parents to contact the Child Maintenance Service. Operational reforms such as these help to improve outcomes for children by enabling parents to set up and manage child maintenance arrangements in ways that suit their own circumstances.
The noble Baronesses, Lady Massey and Lady Sherlock, raised the National Audit Office report. I am pleased to confirm that our officials are working well with the National Audit Office—it is work in progress. It is a value-for-money study and will be completed during October and November.
On child maintenance performance and track record, I know that many noble Lords will have experience of the various child maintenance schemes—already referred to by my noble and learned friend Lord Mackay—that there have been over the years. This is an area where the Government have learned a lot. They are completely committed to ensuring that parents play their part and take responsibility for supporting their children. The child maintenance system has had a difficult history in our country, but I am sure most colleagues would agree that the Child Maintenance Service is a significant improvement. As has already been referenced, more than 750,000 children are now covered by child maintenance arrangements. In the past year—2019-20—more than £1 billion was due to be paid through direct pay and the collect and pay service. The compliance rate for parents on the collect and pay service has increased significantly, rising by six percentage points between the quarter ending December 2018 and the quarter ending December 2020.
As the noble Baroness, Lady Massey, said, during the Covid public health emergency, a number of temporary changes were made to the Child Maintenance Service. On the question that the noble Baroness, Lady Sherlock, asked me, 1,507 FTEs were redeployed in the Covid emergency to make sure that we could get money to people. I can give noble Lords a categoric assurance that they are all back and we are back in full service mode.
In December 2020, more than 40,000 paying parents on the collect and pay service had a deduction from earnings order in place, collecting more than £25 million. More than 60,000 deductions from benefits were in force and more than 3,500 deduction orders were in place, collecting a record £3.3 million from bank accounts. I am confident that we will maintain these improvements as we move forward.
My noble friend Lord Farmer and the noble Baronesses, Lady Massey and Lady Sherlock, raised the issue of enforcement powers. The Child Maintenance Service’s enforcement powers are strong and are used widely against those who consistently refuse to meet their obligations to support their children. I have been absolutely staggered at the lengths that people will go to in order to avoid paying their child maintenance. There was an absent dad who owed £80,000 in child maintenance and thought that he could avoid paying it, despite having a great lifestyle. The financial investigation and enforcement teams were right behind him and managed to get that £80,000, which was a life-changing amount of money for the receiving parent. He had £175,000 in the bank. So we are not having any of it—I can tell you that.
The noble Baroness, Lady Sherlock, raised the issue of child maintenance and child poverty. We know that child maintenance can play an effective role in reducing child poverty and enhancing the life outcomes of children in separated families. Child maintenance helps to reduce the chances of children being raised in the lowest 20% of the income distribution, and we know that approximately 120,000 fewer children are growing up in poverty as a result of child maintenance payments.
The noble Baroness, Lady Sherlock, raised the issue of lone parents, who are much more likely to live in low-income households. Extra money coming in through child maintenance can make a real difference to these families, as it is disregarded in full in universal credit. Lone parents get to keep every pound of maintenance paid, and we encourage lone parents on benefits to make a claim for child maintenance. I am pleased to say that my very first visit as a Minister was to Gingerbread and that my colleagues and officials have a very good ongoing relationship with both Gingerbread and Families Need Fathers, and we consistently listen to the issues that they raise with us.
I come now to parental conflict, which the noble Baroness, Lady Massey, my noble friend Lord Farmer and my noble and learned friend Lord Mackay all raised. When two people fall out, the repercussions are felt far and wide by children, and we are only too aware that we have to try to intervene at the right time to reduce this conflict. That is why we have our Reducing Parental Conflict programme, and we are very pleased with the impact that it has had to date. In government, we have a cross-departmental working group on it, involving the Department for Health and Social Care, the Home Office and MHCLG.
Of course, at this point, I want to raise family hubs. We have five government departments working together on family hubs, and we hope that the Reducing Parental Conflict programme can be one of the tools in their armoury. We know that the sooner we intervene in the breakdown of a relationship, the better the outcome can be—and I would be very happy to give more information to noble Lords about that when we meet again.
Before I close my remarks today and deal with some of the other issues that were raised, I will touch on domestic abuse, which I know is a matter of deep concern to all noble Lords. It is vital that the Child Maintenance Service plays its part in supporting victims of domestic abuse. We will continue to waive the application fee for domestic abuse victims and to provide support to allow victims to set up maintenance arrangements safely. The Child Maintenance Service has ramped up domestic abuse training for front-line staff and will continue to review its ways of working to further address a culture where victims of domestic abuse are in absolute poverty—they are a priority. In that vein, I am in the process of commissioning an independent review of ways in which the Child Maintenance Service supports victims of domestic abuse.
Noble Lords raised the issue of the consultation, which we have issued and are embarking on. I give an invitation to all noble Lords: if they have other things they want us to consider, the door is open and they should let us know what those things are. I would now like to cover other important issues that have been raised.
We are grateful to SSAC for raising issues and we have had the opportunity to discuss them with concerned stakeholders. The views expressed will be used to inform future policy development. In response to the noble Baroness, Lady Sherlock, I think I have already said that the system is now fully operational, and the number of staff on child maintenance has gone from 5,500 to 4,700 due to the last CSA cases being closed. Capacity of the system is broadly at pre-Covid levels.
Noble Lords raised the issue of aligning Great Britain with other jurisdictions. We are in close contact with officials in other jurisdictions. As my noble friend Lord Farmer observed, it is hard to transplant measures from one jurisdiction to another, but we continue to monitor international developments in this field. I believe that covers the issue of the situation in Australia. Dual income adds significant complexity to a child maintenance calculation and measures that work in one place do not necessarily work in another. I am happy to continue to discuss that and keep the issue under the review.
On family-based arrangements, we recognise that conflict is harmful to children and the intent of the 2012 maintenance reforms was to try to promote collaboration between separated parents. We know that a family-based arrangement is not for everybody, so we offer people other ways of paying. I think my noble friends Lord McColl and Lord Farmer raised the issue of the appeals process and whether it works. We have made changes to the appeals process and, if a complainant is still unsatisfied with the response they have, they can escalate it to the Parliamentary and Health Service Ombudsman. Noble Lords asked me to tell them about the progress of the Government’s commitment to supporting parents to make family-based arrangements. The survey we did will be published in due course.
I am sorry to have run out of time, because this is a subject dear to my heart; I could spend all day talking to noble Lords about it and answering your questions, believe me. Please go away from here understanding that we know child maintenance is important, we are on it and we are going to make the changes we need to make to take children out of poverty so they can get the best chances in life.
Thank you, Minister. That completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.
Committee adjourned at 6.38 pm.