Monday 5 July 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, 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.
European Union and European Atomic Energy Community (Immunities and Privileges) Order 2021
Considered in Grand Committee
That the Grand Committee do consider the European Union and European Atomic Energy Community (Immunities and Privileges) Order 2021.
Relevant document: 7th Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument).
My Lords, this draft order was laid on 17 May 2021. It confers immunity and privileges on the European Union delegation to the United Kingdom and the European Atomic Energy Community. This order is required to implement the agreement that we have reached with the European Union, which is broadly in line with global practice, but includes important provisions to ensure that immunities and privileges do not impede the proper administration of justice.
Before I go into more detail, I will provide some context. On 31 January 2020, the United Kingdom left the European Union. Accordingly, the EU opened a delegation to the UK to replace the European Commission representation. This delegation represents the interests of the EU and co-ordinates among the member states. This Government are clear that we want a relationship with the European Union based on friendly co-operation. The delegation plays an important role in that regard, including in the implementation of the trade and co-operation agreement.
I turn to the details of the draft order. The order is necessary for the EU delegation to function effectively. It confers legal capacity and immunities and privileges on the EU delegation, its head and, indeed, staff. It is customary to grant immunities and privileges to diplomatic missions and international organisations to enable them to function. This order does so in respect of the EU delegation in terms broadly similar to those offered by other Governments to the EU delegations globally, but it also includes important provisions to ensure that immunities and privileges do not impede the proper administration of justice.
The order categorises staff at the EU delegation as either diplomatic agents or staff members, and contains provisions in respect of their family members. Staff notified to the Foreign, Commonwealth and Development Office as diplomatic agents would be immune from civil, criminal and administrative jurisdiction, including any measure of enforcement. They would also have inviolability of their residence, baggage, official papers and documents. They would have inviolability of the person only in respect of their official acts. There would be no immunity or inviolability in respect of road traffic accidents or offences, irrespective of circumstance, for any diplomatic agent.
For staff members, the order accords immunity from the criminal, civil and administrative jurisdiction of the UK only in respect of their official roles. Staff members also receive inviolability of their official papers and documents and inviolability of the person only in respect of their official acts. Again, there is a complete carve-out from this immunity and inviolability for any alleged road traffic accidents and offences. Certain fiscal exemptions are also provided for the delegation in the exercise of its function and for staff. These include exemptions from direct taxes on assets, property, income and the delegation’s operations, and an exemption from council tax. Further, the order sets out provisions by which the UK may request that these immunities and privileges be waived.
To conclude, this order implements the agreement reached with the European Union in respect of its delegation in London, in line with global practice. It enables the delegation to conduct its activities in the UK, but with important protections for the effective administration of justice. The delegation plays an important role in the UK-EU relationship of a partnership based on friendly co-operation. I beg to move.
My Lords, I am most grateful to the Minister for his exposition of this order and his customary clarity; I thank him for that. I have read the order through and I am satisfied that it fulfils the purposes for which it will be made. In particular, I endorse what the Minister said about the importance of good relations with diplomatic staff throughout Europe, and I hope that that will be the case.
My own experience of diplomatic immunity goes back many years. I recall claiming diplomatic immunity on behalf of a gentleman who produced magnificent letters, which were supposed to be for Her Majesty’s Government, seeking immunity. Our problem was twofold: first, he was not accredited to the Court of St James and, secondly, the president of the state—which will be nameless—had suffered a coup, and the last we knew of him was that he was a taxi driver in New York, and was unable to give evidence. That was my experience at the time, and I would be interested to know whether ambassadors are still accredited to the Court of St James—I do hope so.
To be rather more serious, of course we are all very concerned about the case of Harry Dunn, and the Minister has pointed out that there is a carve-out in this order for road traffic offences. Does this include causing death by dangerous driving? That is the very important issue in the Harry Dunn case. The person who knocked him down, Anne Sacoolas, claimed diplomatic immunity and departed this country, but her claim has since been questioned. That gives rise to a further question, which perhaps the Minister can answer: how does a diplomat satisfactorily establish that he can claim diplomatic immunity when that is the case? It seems that Anne Sacoolas got away with it.
I too appreciate the Minister’s introduction of this instrument, which is relatively self-explanatory. Like him, I believe that, outside the EU, we all want to use the opportunities this provides to make Britain a successful nation. But to do so, we will need to foster strong ties with our closest allies in Europe, and I hope that this instrument can play a small part in that endeavour.
As the Minister said, the legislation before the Committee will give immunity to certain representatives and staff from the EU and EAEC in the UK, following the recent agreement. Although this is welcome, the Government’s approach to this issue in recent months has been unnecessarily reckless. The Committee will recall the reports, back in January, that the Government would not grant full diplomatic status to the EU. In fact, we had a substantial debate in this Committee in February when we dealt with the Bank for International Settlements SI—again giving immunities. It is rather shameful that this Government took so long to ensure that our relationships with the EU were put on a proper and formal footing.
In February, of course, we addressed some of the technical issues of immunity, not least the road traffic offences issue referred to by the noble Lord, Lord Thomas of Gresford. I welcome some of the explanations given then, but there is an important point to consider in relation to the issue raised by the noble Lord, which is exactly how somebody claims diplomatic immunity and the process to ensure that such a case could not possibly happen again.
There are a couple of other technical issues on this. First, the Minister said that the instrument was laid on 17 May, and the commencement clause says that it
“comes into force on the day after … it is made, or the day on which the Agreement enters into force … whichever is the later.”
I assume that the agreement is in force and therefore that the powers in the statutory instrument will commence, but I hope the Minister can clarify the precise date on which these immunities will be brought in.
Secondly, the Explanatory Memorandum states that Scotland will pass its own legislation due to devolved competence. When does the Minister expect that legislation to be completed?
Finally, the Government have confirmed that, as part of this agreement, information on the EU will be provided regularly. Can the Minister explain exactly what information will be contained in this and what the process is? I welcome the statutory instrument and the Minister’s introduction to it.
My Lords, I thank the noble Lords, Lord Thomas and Lord Collins, for their support for this order. In doing so, I recognise the clear interest in your Lordships’ House in the status of those who are to represent the EU at the Court of St James—I can assure the noble Lord, Lord Thomas, that that is very much the case.
To further qualify the comment I have just made and to further reassure both noble Lords, I note that the establishment agreement sets out that the EU head of delegation will be treated in a manner like any head of mission to the Court of St James. This will include the designation as ambassador. An agrément process will be undertaken and is very much under way, and we are working through the formal presentation of the credentials to Her Majesty the Queen. I hope that the noble Lord, Lord Thomas, in particular—who I know gives very strict scrutiny to the letter of the law—is reassured in that respect.
Both noble Lords raised the immunities and inviolability not being extended to all circumstances. They will be mindful that I will not wish to extend my comments too far because of the nature of and sensitivity around the Harry Dunn case, but I assure them both that, as I said in introducing the order, the UK firmly expects those enjoying immunities and privileges here to comply with UK laws and regulations. However, should a staff member, or, indeed, a family member, commit a serious offence or a series of minor offences, the UK may request the EU to waive immunity.
Specifically on inviolability not been given in all circumstances, that is also to ensure that there is no repeat of the tragic Harry Dunn case, where we have restricted the application of inviolability solely to the exercise of staff members’ official duties. I hope that that clarifies that element.
On the order becoming operational, I assure the noble Lord, Lord Collins, who asked a specific question about Scotland, that the Scottish Government intend to lay the Scottish order in August, with the expectation that this will then be sent to the October Privy Council. We have notified the European Union of this timetable as well.
With that, I hope I have addressed the specific questions. I assure the noble Lord, Lord Collins, in particular—and, although the noble Baroness, Lady Northover, has not joined the debate I assure her through the noble Lord, Lord Thomas—that your Lordships’ strength of feeling has been communicated to colleagues in the Foreign, Commonwealth and Development Office and to my right honourable friend the Foreign Secretary. I too am pleased that we have reached a positive outcome on this important issue of representation of the delegation of the EU to the Court of St James. With that, I commend the order to the Committee.
The Grand Committee stands adjourned until 2.55 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Health Security (EU Exit) Regulations 2021
Considered in Grand Committee
That the Grand Committee do consider the Health Security (EU Exit) Regulations 2021.
Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee
My Lords, the sharing of information and co-ordination of health protection activity between all parts of the UK and with our international partners is absolutely critical to the prevention of and response to serious cross-border health threats. Covid-19 is a good example. There are others today; there will be more in the future.
These regulations will ensure that this essential co-ordination is maintained following our departure from the EU. They enable us to deliver high levels of human health protection across the whole of the UK. They modify retained EU law on health security to establish a stand-alone UK-wide regime. But these regulations are not alone: they form part of broader, ongoing work to improve our health security capabilities.
This work has included the establishment of the new UK Health Security Agency—UKHSA. The UKHSA combines key elements of Public Health England and NHS Test and Trace, including the Joint Biosecurity Centre. The role of UKHSA will be absolutely critical. It will be our permanent standing capacity to plan for, prevent and respond to threats to health. It will deploy the full weight of our analytic and genomic capability on infectious diseases. It will work with partners around the world to lead the UK’s global contribution to health security.
These regulations will support the UKHSA and the other UK public health agencies—Public Health Wales, Public Health Scotland and the Public Health Agency of Northern Ireland—in quickly identifying and responding to a wide range of health issues. They will ensure that we maintain a robust and consistent UK-wide approach to health security that allows us to work effectively with our international partners, including by linking into international surveillance systems.
On our international collaboration and leadership, I remind noble Lords that last month the G7 committed to working towards adopting a standardised minimum health dataset for patients’ health information. This included: working through the International Patient Summary standard; developing internationally shared principles for enabling patient access to health data; and promoting the use of open standards for health data. This highly technical work will have huge practical dividends.
I will say a word about implementation. Noble Lords will know that the UK-EU Trade and Cooperation Agreement—TCA—was announced on 24 December 2020. These regulations will help us meet the TCA’s health security arrangements. The TCA provides a strong basis for the UK and EU to continue to co-operate on health security. It includes a commitment to inform each other when new public health threats are identified in either the UK or the EU. It gives ad hoc UK access to the EU’s database for sharing alerts: the Early Warning and Response System—EWRS. It provides for the UK to attend the EU Health Security Committee in support of response co-ordination, and a commitment to co-operation between the UK and the European Centre for Disease Prevention and Control—ECDC.
It is because of these arrangements that the UK was given access to the EWRS for Covid-19 from January 2021. Our current access avoids any disruption in the flow of public health data during the pandemic. The UK has also continued to attend meetings of the EU’s Health Security Committee—HSC.
I will say something about the substance of the regulations and why these amendments are being made to retained EU law by this instrument. While a member state, the UK was required by EU law to co-ordinate and share certain types of information on health protection with the EU; to give a recent example, early alerts on newly identified threats. As health protection is predominately a devolved competence in the UK, to meet these obligations effectively the four UK nations had to co-ordinate and share the required information with PHE, the UK’s focal point for communication with the EU.
However, following the end of the transition period, this retained EU law relating to health security no longer operates effectively to set rules for such co-ordination on a UK-wide basis. Therefore, these regulations modify and transfer functions previously carried out by the EU to a new UK health protection committee and to the UKHSA, working in co-operation with Public Health Wales, Public Health Scotland and Northern Ireland’s Public Health Agency.
Let me give some examples: first, on early alerting and the EWRS. The importance of early alerting was amply illustrated by Covid-19. Speed of action is absolutely critical. It is imperative that when a threat is identified, information is shared rapidly to enable the quick implementation of control measures that will reduce transmission rates in the general population and protect individuals. To ensure that we have a robust early alerting system in the UK, these regulations require the UK’s public health agencies to notify the UK’s focal point within 24 hours of any new threats that have been identified. For the purpose of these regulations, PHE is designated as the UK’s focal point, with this function soon to transfer to the UKHSA. In this role, the UKHSA will be responsible for receiving alert notifications of serious cross-border threats to health from the different parts of the UK, then working jointly with them to conduct rapid risk assessments and put in place co-ordinated response measures as necessary.
To meet our obligations under the TCA, the UKHSA must also notify the EU of any threats occurring in the UK which may present a risk to EU member states. In return, the EU will notify the UK of any emerging threat in Europe which may present a risk to us. If the UK and the EU agree it would be beneficial for the UK to have access to the EWRS for any threat, the UKHSA will be responsible for uploading and receiving related surveillance information.
Secondly, I will say a word about UK-wide surveillance. It is critical that we continue to conduct UK-wide epidemiological surveillance on known communicable diseases. Therefore, these regulations make provision for the UK’s four public health agencies to conduct surveillance on a shared list of communicable diseases and related special health matters. This is vital for improving our understanding of the prevalence of infectious diseases across the whole of the UK.
Thirdly, on co-ordination across the union, these regulations require the UK Government, the devolved Administrations and the UK’s public health agencies to consult each other with a view to co-ordinating their respective monitoring and early warning of, and their response to, serious cross-border health threats. They must inform each other of any substantial revisions to preparedness and response planning.
Fourthly and finally, on governance, to support the implementation and functioning of these regulations, we are establishing the UK health protection committee. The committee will have representation from all parts of the UK and will function to provide advice on the list of communicable diseases and related special health matters that are subject to UK-wide surveillance, and the associated operational procedures.
As health security is an area of devolved competence, we have obtained formal consent for the regulations from the DAs. On this point, I pay tribute to the spirit of collaboration across the devolved Administrations. For example, just last week I had a hugely productive call on the life sciences vision with Minister Ivan McKee, Minister Maree Todd, Minister Robin Swann, Minister Paul Frew and Minister Eluned Morgan—the noble Baroness, Lady Morgan of Ely. I thank them for their collaboration. In parallel, we are working together with the DAs to develop a common framework, which will strengthen UK-wide governance arrangements on the prevention and control of serious cross-border health risks.
These regulations are critical. I beg to move.
My Lords, I thank the Minister for his full explanation of these regulations. The need for them is self-evident in the post-Brexit situation and I welcome the intent behind them.
Of course, also behind the regulations is the need for the continuation of effective co-ordination between the UK and the EU. The implementation of the health security part of the trade and co-operation agreement is meant to support effective future working and information sharing; it also enables the UK to request early access to the EU Early Warning and Response System in respect of a serious cross-border health threat.
We debate these regulations at a time when the EU has proposed legislation to ensure that it is nimbler in responding to serious cross-border threats to health in future, including the declaration of an EU emergency situation, an enhanced mandate for the European Centre for Disease Prevention and Control, and a reinforced mandate for the European Medicines Agency to enhance its role in crisis preparedness and management for medicinal products and medical devices.
I have no doubt that a more effective EU response to a serious cross-border threat to health that also affects the UK is to be welcomed, but it will work only if we are in full co-operation mode with the EU. The Minister has been reassuring on this but I would like further assurances on our arrangements. He made mention of the UK health protection committee, which is a governance organisation in respect of the UK Government and the devolved Administrations, and the UK Health Security Agency. Can he give some information about when he expects the agency to be up and running? What is happening in the interim?
I also want to ask the Minister about the specific arrangements in place in respect of Northern Ireland. I know that we are to debate regulations on the placing of medicinal products and medical devices on the Northern Ireland market due to the terms of the protocol. Are there any particular implications for Northern Ireland in respect of these regulations?
Finally, I refer to Secondary Legislation Scrutiny Committee’s report on this SI. Although the committee did not report this instrument to the House, it did comment on the Explanatory Memorandum, stating:
“Although the Explanatory Memorandum (EM) provided is full of information on future EU-relations, it does perhaps overestimate the average reader’s knowledge of the UK’s plans”—
well, quite. I understand that the committee asked a number of questions to which the Minister’s department has provided answers. However, the committee made this point:
“Because of the pandemic, coordination of health surveillance is more important than usually, and an EM needs to make it absolutely clear to the House what it is being asked to agree to.”
Can the Minister assure me that his department has taken note of these comments in respect of further regulations?
My Lords, I am pleased to contribute to this short debate. I thank my noble friend the Minister for introducing the regulations, which, as the noble Lord, Lord Hunt of Kings Heath, quite rightly said, are self-evidently necessary in these circumstances. I have no reservations about introducing them but I want to take this opportunity to explore a number of issues, including how my noble friend anticipates our relationship with the European Union developing in future.
First, the question of where the common frameworks are concerned inside the United Kingdom is fairly straightforward. However, I am not entirely sure how the UK health protection committee will coincide with, or work directly with, the four Chief Medical Officers; perhaps my noble friend can tell me. Certainly in England, the Chief Medical Officer appears to have a different future role in relation to health security than was formerly the case for his predecessors.
So far as the relationship with the European Union is concerned, my noble friend felt that the TCA created a full process for co-ordination. I am afraid I do not agree with him. I think the TCA creates a bare-bones relationship with the European Union for the future. I am not even sure that what is in the TCA has yet been in any sense implemented, since it includes a memorandum of understanding between us and the European Centre for Disease Prevention and Control, and I see no evidence of that being negotiated. Perhaps my noble friend can tell me whether that is the case. One has recently been concluded between the ECDC and Mexico, but not with us.
When one looks at the ECDC, which was established in the wake of SARS in 2004 to enable the European Union to be prepared for a future pandemic, I am afraid one is not impressed. It retreated from its media functions with anything other than national authorities and health professionals—it retreated from public communication—and it needs radically to change its approach. Indeed, as an organisation, it is hamstrung by the simple fact that under the Treaty on the Functioning of the European Union it is dependent on the activities of national authorities. It complements the work of national authorities but in no sense co-ordinates or controls them. For example, by 3 April last year, four European Union member states had failed to supply the ECDC with the necessary data for surveillance purposes. So unless and until the ECDC is in a position to inspect and secure data surveillance in all EU member states, I am not sure that it has the necessary powers and control.
The European Commission, albeit producing reports explaining how well it has done, freely acknowledges this in the way in which it is approaching the development of a European health union, as the noble Lord, Lord Hunt of Kings Heath, suggested. We may no sooner have this in force later this year, and start to create a relationship between the health security committee and the ECDC, than we find that the European Union has created a health emergency preparedness and response authority, which it anticipates should be operational in 2022. There may be a European Union chief epidemiological officer. There may be a major manoeuvre on the part of the European Commission, proposing to legislate for a European health union. It may well move from competence being entirely for national authorities on major cross-border health threats to an EU competence shared with national authorities. That may make a considerable difference. However, when it comes to us co-operating with the European Union on cross-border health threats, it means that we have to be prepared for much more substantial activity on its part and a much more complex relationship with a range of European Union actors.
I shall mention one final thing. In all this, nobody appears to have referred to the role of the World Health Organization’s regional office for Europe. I am reminded that there are 27 member states of the European Union, but 53 participating states—at the last count, but I think it might have gone up to 55—in the World Health Organization’s region for Europe. A number of those states, such as us, Switzerland, those in the western Balkans and so on, will be integral in responding to a cross-border health threat of the kind we have experienced during the pandemic. If, as we wish, and I think the European Union wishes, there is to be enhanced global health security, there is no alternative to us reforming the World Health Organization and, in the process, vesting greater potential in its regional structures. Those have been poor in the past but could be much more effective in future. They take responsibility in relation to all the countries likely to be affected rather than, as in the case of the European Union, only just over half of them in Europe. I hope my noble friend will be able to say something about the Government’s plans for strengthening the WHO in Europe.
My Lords, I largely agree with what the noble Lord, Lord Lansley, said just now.
These regulations, which support and are aligned to the common framework, revoke and restate with modifications retained EU law on health security. The regulations ensure that EU law continues to function effectively following the end of the transition period, and provide a legislative regime for epidemiological surveillance and response to serious cross-border health threats, whether at risk of extending beyond the UK to an EU member state or as may otherwise necessitate a co-ordinated response within the UK to ensure a high level of human health protection. Will the current variant now coming to the UK be dealt with by these regulations?
The noble Baroness, Lady Gardner of Parkes, has withdrawn, so I call the noble Baroness, Lady Brinton.
My Lords, I declare my interest as a vice-president of the Local Government Association. It is essential that, when dealing with future health risks, the UK is equipped to effectively share knowledge, data and skills within our borders and internationally. I support the calls from the noble Lord, Lord Lansley, for clarity over the role of the WHO’s regions—in our case, Europe. I also support his calls for WHO reform, but hope that we and the other member nations will remember that it is the members of the WHO, not the WHO itself, who maintain its power and direction. Too often, the WHO has been the whipping boy, as though the members have no role at all.
The past 18 months have shown how global health threats can shut down the entire world. By leaving the EU, the UK has lost unconditional access to the EU’s Early Warning and Response System. The trade and co-operation agreement states that the UK may be granted access to EWRS on an ad hoc basis via written request. Can the Minister clarify how these requests will be overseen and managed? Are there any plans to negotiate a more consistent and collaborative relationship? It is important that Parliament and public health professionals more widely can see the detail of how this will work before it comes into force.
This SI creates a new body within the health protection committee. How have these plans and new structures been influenced by the learning process of the past 18 months, during which we have been exposed to be woefully unprepared for the health threat that the pandemic has given us? We have had huge issues with data sharing. How will this new framework and committee help us not to repeat those same mistakes?
The Minister said it is vital that the UK has excellent surveillance provisions, and we on these Benches agree, so it is good news that the four nations that make up the United Kingdom are working together on this. It is self-evident that this co-operation is vital to make it work. As we know from Covid, viruses do not recognise boundaries, whether those of devolved states or European countries. I echo the questions raised by the noble Lord, Lord Hunt, about Northern Ireland, given the sensitivities of the Northern Ireland protocol. There seems to be something of a war of words on other matters; it would be awful if there was a war of words on these important health issues.
Our directors of public health are the unsung heroes of the pandemic, yet there has been confusion regarding the structural change of the UK Health Security Agency. It is not clear how much influence directors of public health will have. What they need now is clarity of communication and leadership around the new roles and responsibilities. That is vital as we shift into the endemic phase of Covid-19 management, when we are likely to be very reliant on these directors of public health and their small teams in local authority areas. Alongside this legislation, we need long-term funding boosts for health protection capacity in local councils and our public health budgets, so that our directors of public health are supported in the wonderful but often invisible work they do.
It certainly felt as though their work was invisible to Ministers and Public Health England during the first half of the pandemic—and this is not just about the pandemic. I am reminded of the Salisbury poisonings and how the exceptional director of public health in that area worked locally and nationally to try to resolve a really difficult and unpleasant situation; the BBC’s drama was able to show people on the ground exactly the work that public health colleagues do. Can the Minister confirm that we will be seeing a proper increase in their budgets in this year’s spending review? Otherwise, we will once again have to say that this Government’s words and figures do not agree. It would be awful if large numbers of expensive consultants again had to be contracted at the centre to manage a crisis when we have teams of experts on the ground in our local communities. They cannot magic essential resources to be available 365 days of the year out of thin air.
Finally, contact tracing will continue to be a vital part of public health work in the future. Can the Minister confirm that the Government are still committed to ensuring that we have an effective test and trace system to manage outbreaks of this disease as well as other incidents to do with environmental health locally and to prepare for the possibility of malign forces at work, as with the Salisbury poisonings? Given reports last week that care providers are still failing to get the data that they need, what action are the Government taking to improve this? How will the UK Health Security Agency provide the overarching leadership that is so desperately needed to strengthen partnership at a local, regional, and national level?
My Lords, we debate these regulations today on the 73rd anniversary of the National Health Service. I am sure that all noble Lords take great pleasure in seeing the George Cross awarded to recognise NHS staff past and present across all disciplines and all four nations; it is indeed a worthy honour.
I thank the Minister for outlining the focus and intent of these regulations, which are certainly welcomed. We welcome the focus on co-ordinating data-sharing, epidemiological surveillance and a four-nations approach to the prevention and control of serious cross-border health threats. It is certainly important to see the devolved nations’ public health agencies working in a close, collaborative relationship, which is what we hope to see following the adoption of these regulations. It is worth noting that, throughout the course of the pandemic, we have seen considerable regulatory divergence and differing communication issues between the devolved Administrations and the UK Government, particularly at a political level. As we well know, and as has been referenced in this debate, global health—in fact all—threats do not recognise borders. They do not fit that neatly.
The First Minister for Wales, Mark Drakeford, has consistently asked for a “regular, reliable rhythm” to meetings between the devolved Governments and the UK Government. Can the Minister assure us that this will become the norm? I noted his complimentary comments about the collaborative nature of his recent discussions, and I certainly wish to be assured that that will continue.
According to the Government, the UK Health Security Agency will undertake functions in five core areas in relation to future infectious disease threats. It will also
“act to strengthen health protection capability from top to bottom”
and place a “strong focus” on reducing inequalities in the way that different communities experience, and are impacted by, infectious diseases or environmental hazards. However, there is still very little information about how this will work, and it remains unclear how it will address the wider socioeconomic determinants of health. Perhaps the Minister can help us here.
To be more specific, the UK lost its elimination status for measles in 2016 and that was not about an external threat. That was about the internal competence—or otherwise—of the Government in handling public health issues. Does the Minister share my concern that the decision to subsume Public Health England into a security-focused agency may result in large areas of public health being neglected amid a focus on future pandemics?
What emphasis will be given to tackling the wider determinants of health, which have had a huge impact on the UK’s very poor outcome with Covid? Does the Minister agree that the Government cannot afford to ignore non-communicable diseases, including cancer, the wider health of the UK and those social inequalities, such as cramped housing and unequal access to care, which have exacerbated the experiences of many throughout the pandemic?
One of the big problems as we went into the pandemic was that the health of the population was poor at the outset, and in many cases getting worse. The improvement in life expectancy had stalled from 2012 onwards. Can the Minister confirm whether the agency will deal with this? One of the major failures of the UK’s response to Covid has been the inability of people to isolate. How will the agency address people in precarious occupations in the informal economy—those who do not have access to paid leave in order to self-isolate—and people who live in multigenerational homes?
We welcome the investment in tackling future infectious diseases but remain concerned that at the same time there has been disinvestment in UK Research and Innovation research funding. UKRI has warned of a £120 million hole in its budget following recent cuts. Does the Minister share my concern that this shortfall threatens to undermine overseas scientific projects seeking to understand how we can better mitigate against zoonotic diseases such as Covid-19? Will the Government commit to bringing forward their commitment to increase research and development spending to 2.4% of GDP by 2027?
Like my noble friend Lord Hunt of Kings Heath, I refer the Minister to the comments of the Secondary Legislation Scrutiny Committee on the Explanatory Memorandum, which, it said
“does perhaps overestimate the average reader’s knowledge of the UK’s plans.”
I hope the Minister will be able to assure the Committee that the department will ensure that the Explanatory Memorandum will be explicitly clear on what Parliament is being asked to agree going forward.
My Lords, I am enormously grateful for noble Lords’ perceptive comments and the questions that they raised. As the noble Lord, Lord Hunt, said so persuasively, these regulations are vital to maintaining UK-wide collaboration on health security and put in place the necessary mechanisms to allow us to engage effectively with our international partners on infectious diseases and other cross-border threats to health.
I am grateful for the demanding and analytical questions asked by all noble Lords on closer co-operation with the EU. I reassure my noble friend Lord Lansley that the regulations will ensure that implementation of the health security chapter of the TCA is effective and complete through the establishment of a robust UK-wide regime that can share the information required to meet our TCA obligations.
As to my noble friend’s comments on EU performance and future plans, we will have to wait to see where it is coming from. In the meantime, I reassure him that we were prompt to request access to the EU’s Early Warning and Response System in relation to the Covid-19 pandemic and that the EU was equally swift to grant that access. We are committed to continuing such positive co-operation on monitoring serious cross-border health threats where it is in our mutual interest and to maximising the benefits of TCA provisions. These regulations set the foundation for us to do exactly that.
The noble Lord, Lord Hunt, asked about the timing of the UKHSA/PHE transfer. The MoU between PHE, UKHSA and the ECDC is currently being negotiated. On the noble Lord’s questions on the TCA, the health security arrangements contained within the UK-EU TCA provide for continued collaboration between our world-leading scientists and technical experts and the ECDC, including on Covid-19 as we continue to tackle the pandemic. We are working with the ECDC to consider how we can best support the continuation of this co-operation and collaboration between our respective experts in future, including through the conclusion of an MoU.
The noble Baroness, Lady Brinton, and my noble friend Lord Lansley asked about the WHO. Both the UK and the EU recognise the importance of continuing to work together to protect our citizens from infectious diseases and other cross-border threats to health. We already work together in multilateral groups and organisations, including the Global Health Security Initiative, and this agreement ensures that this will continue where it is in our mutual interest. These regulations address the threats arising from infectious disease and non-infectious threats, such as chemical and environmental hazards. This is in line with existing national policies and the International Health Regulations—IHR—2005.
The noble Baroness, Lady Brinton, asked about the involvement of local health teams. I confirm that the UKHSA design will incorporate effective co-ordination with local authority health protection teams. I reassure the noble Baroness, Lady Merron, that engagement with the DAs is extremely frequent and during the pandemic has been happening on a weekly basis, at least. We are committed to maintaining that very close co-ordination, which is supplemented with weekly meetings among the four CMOs that I understand are extremely productive.
I completely agree with the noble Baroness that this country was hard hit because of the bad health of our population. That is why we are bringing forward plans for the Office for Health Promotion, where the relevant parts of PHE will be rolled into an extremely effective and energetic organisation which will be focused on the country’s underlying health conditions, under the clinical oversight of the CMO. We will unveil plans for that office shortly.
I emphasise that the passage of this instrument is critical in the prevention and control of serious cross-border threats to health in order to maintain a high level of human health protection across all parts of the UK. The regulations act on our intentions to strengthen domestic capability in health security and they are also imperative in helping us meet our obligations under the TCA with the EU. I hope very much that I have been able to answer the questions raised by noble Lords, and with that in mind I commend these regulations to the Committee.
Coronavirus Act 2020 (Early Expiry) Regulations 2021
Considered in Grand Committee
That the Grand Committee do consider the Coronavirus Act 2020 (Early Expiry) Regulations 2021.
Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee
My Lords, the one-year status report of the Coronavirus Act, which was laid in Parliament on 22 March, recommended the expiry of 12 provisions, and the suspension of a further two provisions and two parts of a third provision. I am sure noble Lords will join me in recognising that this is testament to the hard work and sacrifice that has helped us to get to this point. The regulations were laid under the draft affirmative procedure to allow noble Lords this opportunity to scrutinise the Act, as we have always committed to.
Having helped bring this Act through Parliament last year, I am enormously pleased to speak in support of this draft statutory instrument. Taking steps towards returning to normal and being able to switch off some of the temporary emergency powers in this Act is very much in line with the direction our country is moving in and fulfils the commitments the Government made from the Dispatch Box at the time.
The Coronavirus Act was introduced to enable the Government to support and protect as many people as possible during the pandemic. It has been, and continues to be, an essential tool in our toolkit, helping to mitigate transmission in our communities, enabling crucial financial support, and protecting and supporting the NHS and other public services. Ultimately, it has helped to save lives.
The Act ensures that the NHS has the capacity to deal with peaks of the virus by allowing the temporary registration of nurses and other healthcare professionals. It protects critical societal functions—for example, providing courts with the ability to use video technology—and allows us to provide effective support packages to individuals and businesses, such as the Coronavirus Job Retention Scheme and the Self-employment Income Support Scheme.
Now to the matter in hand. The Government conducted in-depth assessment of all the Act’s provisions as part of the one-year review. Today we are debating 12 provisions that we propose to expire early. I thank colleagues in the devolved Administrations for their engagement, support and consent in expiring the relevant provisions that apply to them. Eleven of these powers will be expired for all the nations they extend to—for example, Sections 8 and 9, which across all four nations were never needed thanks to the extraordinary alternative arrangements put in place. I firmly believe that this highlights our desire to remain aligned as a United Kingdom as we move to the next phase of our response.
On the specific provisions, we are expiring Sections 8 and 9, which facilitated emergency volunteering leave and compensation leave for emergency volunteers. Thanks to the fantastic effort by the NHS, these provisions were not needed. Other measures, such as NHS Professionals, other agency and bank staff, and the Bring Back Staff scheme, have been more appropriate to address the need for trained clinical staff.
Section 15 allowed local authorities to ease some responsibilities under the Care Act so that they could continue to meet the most urgent and acute needs in the face of Covid-19 by streamlining assessment and charging for care retrospectively. In England, only eight authorities used these powers—and none since 20 June 2020. There is strong support for expiring the provision, as the social care workforce has remained resilient under pressure and able to continue to deliver its duties. Expiry of this provision shows just how much progress we have made through the resilience of the health and care system.
We are also expiring Section 24, which allowed biometric data held for national security purposes to be retained for additional time; five provisions that required information for businesses and people involved in the food supply chain; Section 71, which allowed a single Treasury Minister to sign on behalf of all Treasury Commissioners; Section 79, which extended arrangements for business improvement districts; and Section 84, which allowed for the postponement of General Synod elections. We also suspended a further three provisions in the Act when, on 21 April, the Coronavirus Act 2020 (Suspension: Temporary Judicial Commissioners, Urgent Warrants, and Disposal of Bodies) Regulations 2021 came into force.
I have always been clear that these powers should not be in place any longer than needed. That is the approach we have sought throughout. All powers in the Act have been kept under continuous and close review. The powers we are debating are not required anymore; we have taken steps to remove them through this instrument.
The Government recognise the vital importance of parliamentary scrutiny. We heard and responded to the calls from this House, and we built rigorous checks and balances into the very fabric of the Act. Arrangements to facilitate accountability and transparency include conducting two-monthly status reports on the non-devolved provisions, as well as a one-year status report. Under Section 98 of the Act, the temporary provisions are also subject to a six-monthly review and renewal vote in the House of Commons. The first and second of these were held on 30 September 2020 and 25 March 2021 respectively, in which Parliament agreed to the continuation of the temporary provisions in the Act. We will lay a report covering the next six-monthly review before the end of September. The third six-monthly debate and renewal vote will take place shortly after; this will provide the opportunity, as previously, to debate the provisions in detail and consider their continued application based on the latest evidence.
The remaining provisions in the Act serve three core purposes: shoring up capacity in the health and care system; ensuring the delivery of essential public services, such as enabling virtual court proceedings; and providing financial and other support to businesses and individuals. While the period of the pandemic remains, so does the need for the Act. However, the six-monthly review process concluding in September will assess each of the temporary provisions rigorously, and we will expire all those deemed no longer necessary and proportionate to the response.
People and businesses need certainty. They, and we, want to see restrictions being lifted. This is the direction we are looking towards, and this is the direction we are taking. We have come a long way, and we should look ahead to the next six months as a chance to focus on the positives, on recovery and on reaching the next milestone in our road map. I beg to move.
My Lords, I thank the Minister for his explanation of these regulations. Clearly it is a good thing that the provisions are no longer considered necessary.
I want to ask the Minister about the impact where the provisions were in fact used. First, the Church of England measures allowed the postponement of the dissolution of the General Synod to 31 July 2021 and the continuation of members of the synod in office. Would the Minister care to tell me what impact that had on the running of the affairs of the Church of England? As a Minister of the Crown in a country where the Church of England is the established Church and Her Majesty the Queen is its Supreme Governor, I am sure he is on top of this matter.
I also want to ask the Minister about the Care Act provisions, which, as he explained, enabled local authorities to relax some duties on them, enabling them basically to prioritise the most serious and urgent cases by not conducting a full needs assessment or delaying some assessments. Eight local authorities used these powers between April and June 2020 but none did so after then, as the Minister said. Has he made any assessment of the impact of the use of those powers by those eight authorities? Also, have we learned anything? For instance, have we found a way potentially to streamline the assessment process?
Of course, the care sector has been under considerable pressure for some years. The pandemic brought huge challenges with it, and we still await a plan for its long-term sustainability. In joining my noble friend in congratulating the NHS on the hugely deserved award of the GC today, I am sure that we should also acknowledge the tremendous efforts of so many in the care sector in these past 15 months.
My Lords, at the one-year review of the Act, we pushed for it not to be reviewed. It would have been really useful to understand why there has been such a delay. I remind the Minister that we were concerned over some of the civil liberties issues in the Act, such as on policing, protests and fines—we know the fines did not hold up when applied in practice—and over transparencies. We have raised repeated concerns about the transparency on the dashboard. We were also concerned about people not understanding the rules. Famously, where guidance versus the law happened, it was interesting to watch the Government having to retreat very fast when they realised that they were telling people in Greater Manchester that something was covered by the law, yet the people in Greater Manchester were clearly able to show that it was guidance.
There are also concerns about the enormous blank-cheque powers that this legislation has provided. I am grateful to the noble Lord, Lord Bethell, for saying earlier that the expiry of these provisions was announced on 25 March. His exact words then were:
“We made a promise to Parliament that we would not keep any provision in place for longer than was necessary, and we have made good on that promise.”—[Official Report, 25/3/21; col. 985.]
It has been 14 weeks since the Government decided that they did not need the provisions, and they have not yet removed them. They are still in place until this SI comes into force.
We also had particular concerns about the provision of social care. Part 1 of Schedule 12 and Section 15 enabled local authorities to divert resources to care and support from other duties. This was used eight times and not since 29 June 2020. We were really concerned about this provision because those who needed support for care suddenly found it was removed. The parents of disabled children who needed 24-hour care had found that their entire support mechanisms were removed from them. On the Disabled Children’s Partnership website today, one mother has been saying that the lack of that support has meant that she and her husband have had no more than two hours of consecutive sleep in over a year, because they have had to try to manage it. They are both utterly exhausted and extremely concerned that they might be making mistakes. That is because of the loss of this diversion support. What is particularly worrying is that most local authorities have not yet reinstated it.
Because we still do not know when this SI will come in, it is a little difficult to approve it until we also know the exact details about the level of Covid in our communities and its effect on the NHS. The Prime Minister famously talked about “data, not dates”, but the dialogue in recent weeks has become entirely the other way around, with cheery communications about the mask mandate being about to go. It is very noticeable that people have taken that as a signal that they can stop wearing masks already. Yet just over a year ago in June, when we lifted that first lockdown, cases were down to around 1,000 a day. This last week, it was around 25,000 new cases per day with hospitalizations increasing, even if at a lower rate, and certainly—thank goodness—ICU occupancy at a lower rate. However, GPs, doctors and nurses in hospitals all report that the NHS is nowhere near going back to being normal.
Today on LBC, a member of ICU staff at a hospital called in to say: “They can keep the medal and just get everyone to keep wearing masks, if they truly care about NHS staff”. I am with her on that one. Also today Chloe Smith, the Constitution Minister, said that some people more susceptible to infection than others may wish to carry on using a face mask. She cited her recent cancer, saying that she sympathises with those who want to carry on taking precautions.
As the Minister knows from my repeated raising of this issue, for some people this is not a matter of choice. That is so for at least 1 million people in the country: the clinically extremely vulnerable. Current government guidance to the CEV, which came out on 21 June, says:
“We are also advising clinically extremely vulnerable people to … follow the practical steps described below to minimise your risk of exposure … close contact with friends and family will be a personal choice, but you are encouraged to exercise caution”.
They were advised to work from home but, if they could not, to get their employer to make their workspace Covid-safe—I am paraphrasing because the guidance goes on at some length—and otherwise to get advice from professionals. It also says that the furlough scheme will end in September.
In addition, from 1 April there was no longer any SSP for clinically extremely vulnerable people who could not work from home. It is really important that provision is made to avoid clinically extremely vulnerable people having to go to work. Will the Government now take this up? Losing the mask mandate and lifting regulations mean that this group in our society and their immediate carers are put at risk.
I also note that the clinically extremely vulnerable advice says that pupils should be back in schools but the Department for Education lifted the mask mandate for schools some time ago. These children are still at high risk of Covid, which could indeed—
I remind the noble Baroness that the speaking limit for Back-Benchers is five minutes.
Thank you. I have finished.
My Lords, as the noble Baroness, Lady Brinton, implied, no issue is more important to the process of the easing of restrictions nor more conducive to ensuring public support than consistency in the application or expiry of regulations. In referring to Section 15 of the Coronavirus Act on local authorities, I will cite one example which is so important to the motivation behind this SI, which I support. Without consistency in interpreting the rules and guidance relating to the road map out of lockdown, we are in danger of creating a public backlash.
The approach taken by Bath and North East Somerset Council makes little sense in the context of holding graduation ceremonies at the University of Bath—ceremonies which generate so much revenue and create numerous service and supply jobs in the town; and which, with appropriate controls confirmed only last Thursday, led the university authorities to announce that they could deliver safe, socially distanced experiences in line with all the restrictions currently in place. On Friday, with only a few weeks’ notice, they were arbitrarily cancelled with nothing in their place. This last-minute decision, apparently to stop people coming to Bath, leaves many students and families who have already booked non-refundable accommodation stranded. Some are already quarantined in town.
The recent decision by the director of public health of Bath and North East Somerset Council—made despite the UK government guidance allowing for distanced graduation ceremonies, which have been safely carried out by Cambridge and other universities across the UK—makes no sense.
I have a son who is graduating this year from that university, but his experience pales into insignificance when considered alongside that of Wasif Anam, who on Saturday wrote, when adding his name to a petition presented to the university and the council:
“I came here all the way from Bangladesh along with my parents only for this reason. They have had to go through so much trouble with all the paperwork and all and we’ve had to spend over £3000 just on hotel quarantine. It’s a once in a lifetime occasion for all the graduates. They can’t just postpone it like that 3 weeks before the event. Should’ve at least informed us 2 months ago if they were planning to take such a big decision.”
Other students wrote:
“The graduation would be carried out within the strictest of Covid guidelines. I feel if this event cannot go ahead then the council must consider that tourism is a risk therefore need to close all tourist attractions in the city to make this decision fair and equal.”
Inevitably, the mental health of students has been kicked down the road for too long this past year. They have been asked to make sacrifices for the vulnerable and elderly in society, which they have done with remarkable understanding, particularly since they are the least likely to suffer from Covid. Many have been asymptomatic yet have correctly isolated during 18 months in which their university experience has been decimated by Covid. Many are emerging into one of the toughest employment markets on record, with exams and interviews on Zoom, overseas study years cancelled, and undergraduate sporting and social events deleted from their experience and exchanged for the scant comfort and isolation of their digs—while the financial costs they face have remained high.
Worse, the cancellation of graduations conflicts with government guidelines. With 60,000 people in Wembley on consecutive nights this week and bars full, it is tough and unacceptable to give only three weeks’ notice to all students, particularly international students such as Wasif Anam, who bear the cost and the pain, which are neither shared with the rest of the population nor consistently applied.
Here, unusually, I ask the noble Lord, Lord Scriven, as a seasoned local government leader who is sensitive to the relationship—in his case between Sheffield City Council and the university, where significant advance notice was given to students, as well as virtual graduation ceremonies—to speak to his colleagues who control Bath and North East Somerset Council. I also ask the equally excellent and experienced politician, the noble Baroness, Lady Greengross, who is respected across the House, to talk to her colleagues and ask them to think again.
I ask my noble friend the Minister to ensure that there is consistency in the easing of restrictions in the statutory instrument before us, for without consistency how can we expect public support to remain strong—especially the support of the young people of this country, including the thousands of schoolchildren who are isolating at the moment? We need to be resolute as we emerge from this crisis together—and always in step. It is right to move to personal responsibility but we must look to government and local authorities to provide leadership and consistency if we are to win public confidence.
The noble Baroness, Lady Greengross, has withdrawn, so I call the noble Baroness, Lady Fox.
My Lords, although I welcome the early expiry of 12 temporary provisions, it is concerning that these were the only sections removed from the Coronavirus Act. Despite the Government claiming that, as part of the one-year review of the Act in March, they had combed the legislation to ensure that what remained was necessary or proportionate, and that there was robust justification for retaining all the provisions, no details were divulged, no criteria published, and no cost-benefit analysis made available. It is worrying if this was it.
When MPs voted to extend the wide-ranging powers for another six months to the end of September, the then Health Secretary stressed that legislation had been a crucial part of the Government’s strategy. Indeed, legislation has almost become a substitute for strategy, and what the noble and learned Baroness, Lady Hale, described as a “bewildering flurry” brought in in haste. I note that it is harder to remove than install provisions. There seems no hurry to get rid of them. Matt Hancock also said that, although the Act was essential,
“we have always said that we will only retain powers as long as they are necessary.”—[Official Report, Commons, 25/3/21; col. 1115.]
Are these remaining powers necessary now? With a new Secretary of State for Health, can the Minister explain whether there is any reason why, after 19 July, any element of the Coronavirus Act will be retained? Will the new review date of 30 September be brought forward? If not, why not?
It is interesting to look at these 12 specific provisions because they tell of a mindset in drawing up the original legislation: one of a worst-case scenario, deploying the precautionary principle and therefore making laws that would perhaps have been better suited to informal arrangements. Sections 8 and 9 on emergency volunteering were intended to come into force should the delivery of health services be at risk because of the pandemic. Despite significant workforce pressure, the NHS never faced that crisis, but I know many qualified former health workers who volunteered but were never called upon. They were demoralised and felt demobilised. Maybe it is worth looking to them again for the huge backlog in the NHS. The point I am making is that the voluntary instinct was not utilised enough.
Looking at Sections 25 to 29 on food supply, it was assumed that draconian powers would be needed to force those connected with the food supply to share information, when in reality the food industry collaborated and shared data voluntarily. The law assumed the worst, and perhaps politicians should have mobilised positive solidarity rather than using the law as a coercive tool.
One reason why I mentioned the change of personnel at the Department of Health is because, despite the Minister telling me last week that the different tone and messaging on regulations has been driven by data, it feels more like a philosophical shift in emphasis from coercion to trust. The former Health Secretary spoke about the laws with a certain inflexible zealotry, once infamously responding to the Derbyshire police’s over-the-top fining of two women for merely meeting for a walk and a coffee with the quip that
“every time you try to flex the rules that could be fatal”.
This seems rather different from the new position, to quote Sajid Javid:
“We owe it to the British people … to restore their freedoms as quickly as we possibly can”.—[Official Report, Commons, 28/6/21; col. 46.]
Hear, hear to that. Indeed, the Secretary of State noted in an article this weekend not only the economic costs of continuing lockdown measures but the health costs—a helpful antidote to those who seem sometimes oblivious to the non-Covid harms caused by the virus. I accept the moving account given by the noble Lord, Lord Moynihan, of those non-measurable harms that will potentially last far longer than the virus itself.
I also note the damage that has been wreaked on democracy over the past 16 months, during which freedom has been treated as a privilege, not a right. We cannot assume that democratic norms will simply spring back to the pre-March 2020 level once 19 July happens. History tells us to be wary of the dangerous precedent set. Considering the lack of scrutiny and abuse of the legislative process, which has had enormous negative consequences for every aspect of our public and private lives, we need to avoid complacency. Following on from the comments of the noble Baroness, Lady Brinton, on civil liberties, that is why it is the responsibility of everyone in this House and in the other place to use even such rubber-stamping exercises as this in this Room to demand that every emergency measure brought in since March is expired and deemed as unnecessary as those in the regulations we are discussing. It is time to move on.
My Lords, I declare my interests as set out in the register. I thank my noble friend for setting out the early expiry regulations, which I support. As we have heard, these regulations provide for the early expiry of 12 temporary provisions. I note that nine of them are devolved matters and that the Secretary of State has obtained the necessary consent on behalf of Wales, Scotland and Northern Ireland. These regulations are multifaceted, applying to matters as diverse as the retention of DNA and fingerprints, food safety, emergency volunteering and General Synod elections. As we note the lack of need for emergency volunteers in these expiring regulations, I note the great resilience of our NHS and its staff as we mark its 73-year anniversary and its merited award of the George Cross by Her Majesty yesterday. Like many others, I hope that the efforts of NHS and care staff are recognised by the pay review process.
The varied nature of these regulations also illustrates the broad canvas that my noble friend is expected to cover—indeed, does cover—every day in this House. I commend him for his Trojan work effort. On that subject, I wish to stretch his reach and possibly his patience a little further. These regulations do not renew the provisions relating to tenancies, so there are limited opportunities to raise these matters. I have given my noble friend advance notice that I would raise this issue, but if he does not have all the detail to hand, I would appreciate a response in writing.
Until the end of May 2021, there were restrictions, quite justifiably, on the eviction of tenants unable to pay their rent because of the Covid pandemic. This meant that for many tenants housing rent arrears were piling up. The debt was still due but could not be enforced in that period, quite understandably. That came to an end at the end of May. Thus, from the start of June, the possibility of eviction arises again. This will not mean that the tenant has the money to pay the rent, so the landlord enforcing the provision will not necessarily—probably will not—get the rent. It prejudices the tenant in a dreadful way, and it undermines the landlord/tenant market in general. This is only going to get worse as we enter the summer now that evictions can happen again.
This problem has been highlighted on many occasions in your Lordships’ House, as well as in the other place. I have done so, and many others have too, including, outside your Lordships’ House, the National Residential Landlords Association, which has pressed for interest-free hardship loans for tenants to pay-off their Covid-related rent arrears. This would help landlords and tenants and would help preserve the important landlord and tenant market so essential to the country’s housing needs. I press this upon my noble friend.
My Lords, after the sacrifices and deaths of the past 16 months, the Government must not throw away the hard-earned actions of the British public. Ideology over epidemiology will not beat the virus. As we move into the endemic phase, as worldwide vaccination rates are low, new variants will emerge, as will resistance to vaccines, and the shadow of long Covid is hanging over many people. That means that some mitigation and proportionate measures will still be needed. This is not about just personal responsibility. It has to be tied in with social responsibility. This virus is not about “I”, it is about “we” as a society, and therefore there has to be government action as well as personal responsibility.
Therefore, it is not honest to—the Government are not being honest with the British people when they—talk about “irreversible” change or “freedom day”. Rather, we will need to have “mitigation day”, and unforeseen issues will arise. For some time, the country will have to balance personal freedoms with social measures; this is the context in which we should address these SIs and the next phase of the lifting of restrictions.
Regulation 2(2) sets out an extension to the retention of DNA and fingerprints until September 2021. Can the Minister tell us how many DNA samples and fingerprints will be retained? How many individuals, and cases, will that affect? What evidence is there that these need to be retained until September 2021?
I note that there is still no date on the front of this statutory instrument. When do the Government intend for it to come into force? I assume that there will have to be at least one amendment, since under paragraph 15.3 of the Explanatory Memorandum the former Secretary of State’s signature is on the SI. As I have said, we need to ensure as we go forward that epidemiology, not ideology, is at the forefront. I suggest three areas to the Government and the Minister where forward thinking rather than emergency legislation will be needed.
The first is on face coverings. I take the example of Israel, which is ahead of us on vaccinations and stopped the use of face coverings—but, within five days, face coverings had to be reintroduced. What epidemiological evidence do the Government have that, in not using face coverings, this country will somehow be different from Israel and people here will be safer? What epidemiological evidence is there for that?
The Government have allocated £37 billion to test and trace. Localised tracing will be vital as vaccine leakage potentially arises with new variants. To do that, you need to know where people are, where they have been and who they have been with or near. What evidence is there that stopping people pinging in to pubs, bars, et cetera, will improve the test and trace system in this country? What evidence is there for that? Again, ideology will not win against the virus. Good scientific evidence will help us to be safer. Why is this issue potentially being brought forward by the Government?
These Benches have talked for a long time about support for isolation—again, a mitigation issue. What evidence has arisen from the pilots that have been done on isolation and isolation support? Do the Minister and the Government now accept that isolation payments will probably have to be increased, both to encourage people to come forward and get tested, particularly locally, and to self-isolate for the whole period of their isolation?
Long Covid will be with us for a long time, so vaccination is not just about saving people from death, as vital as that is. It is also about ensuring that many young people do not face the spectre of long Covid and disability, and all that will do to their lives for quite a long period of time. Can the Minister tell us about the latest evidence on long Covid, in particular as regards “freedom day”?
All these issues matter in the endemic phase. Given the other issues that are around, the Government cannot continue to say that we are safe because of the vaccine. It is important for the Government to mitigate, and to put in place proportionate restrictions. I hope that the Minister and Government will listen to this rather than be driven by ideology.
I thank the Minister for introducing the regulations and explaining the reasons for them. We certainly welcome this statutory instrument, which removes provisions that enabled local authorities to divert resources to care and support from other duties as stipulated in the Care Act 2014.
As has been acknowledged in the debate, the pandemic has been exceptionally difficult for everybody, while the most vulnerable have seen disproportionately high death rates and a profound impact on the level and quality of their care. With regard to that, I join my noble friend Lord Hunt of Kings Heath in paying tribute to those in the care sector, both paid and unpaid.
According to the guidance issued to local authorities, the easements were meant to be activated only when they were necessary to ensure safety. They were intended to be temporary, kept under review and used as narrowly as possible. An open letter of 19 March 2021, signed by at least 27 disabled people’s organisations, highlighted concerns. It said:
“At such a strained and worrying time for everyone, this unnecessary power that no Council is even using hangs over the heads of disabled people, causing only anxiety.”
Many of the people most vulnerable to the virus simultaneously faced a reduction in essential care and support. By the middle of 2020, seven in 10 people with learning disabilities had had their social care cut or significantly reduced, and 79% of family members were forced to take on further unpaid caring duties in the face of cuts. Just eight of the 151 English councils with social services responsibility made use of the easements during the first wave, and only two of these—Derbyshire and Solihull—used it to cease meeting needs that they were required to meet. According to the CQC, by July, all had stopped.
We continue to know of the loss and long-term closure of day care centres, group activities, travel training and at-home support. There is also little clarity on how local authorities will catch up on reduced assessments or deal with retroactive demands for payment. The catch-all phrase “cancelled because of Covid” remains, and there are concerns that this so-called explanation will continue to linger. Does the Minister accept that the social care easements do not appear to have eased the burden for anybody?
Of course, there is a much bigger issue here: the chronic underfunding and devaluing of the social care sector, of which the fleeting emergence of the social care easements was but a symptom. We have been waiting almost two years to see the clear plan for social care that the Prime Minister claimed to have prepared, and all we heard in the Queen’s Speech was just nine words. Does the Minister agree that a better future for our country cannot be built after Covid-19 without transforming social care? We need the Government to make a firm commitment to reforming and presenting plans to Parliament as soon as possible.
Looking forward, the emergency Coronavirus Act gave Ministers sweeping powers, many of which have yet to be used. The priority must be to use the Act and other regulations related to health protection to bring us out of restrictions safely, support the NHS in recovering from the crisis, ensure that there are measures in place to restart the economy effectively, and enable those who need to self-isolate in future to do so. Nobody wants these regulations in place for any longer than is needed but we have to make sure that this is the last lockdown.
It seems that guidance and reliance on personal choice are set to be the order of the day, with the final stage of the four-step plan out of lockdown imminent. This is despite coronavirus cases rising to their highest level since January. Does the Minister share my concern that letting cases rise with no corresponding actions means further pressure on the NHS, more sickness and more disruption to education, and risks a new variant emerging with a selection advantage?
The new Health Secretary used the weekend press to emphasise that we must learn to live with the virus as we have done with flu. Can the Minister advise the Committee what level of mortality and cases of long Covid he considers acceptable? Will he outline the measures that the Government will introduce, such as ventilation support for buildings and sick pay for isolation, to push cases down? As we know, coronavirus does not impact people and communities equally. What support will be in place for the most deprived areas, where cases are highest and vaccination rates lowest?
My Lords, I am enormously grateful to noble Lords for their thoughtful and perceptive comments. I will try to answer some of the points made in this important debate directly.
The noble Lord, Lord Hunt, asked about the synod. I assure him that this provision allowed Her Majesty the Queen, by Order in Council and at the request of the most reverend Primates the Archbishops of Canterbury and York, to postpone the dissolution of the synod of the Church of England and so to postpone the election that had been due to take place in the summer of 2020. The Church of England agreed that the provision had served its purpose and may be expired, with elections being held online this year.
For the noble Lord, Lord Hunt, the noble Baroness, Lady Merron, and the other noble Lords who asked about the Care Act, I will spend a moment providing some reassurance on the easements that we are expiring. The Care Act easements were a temporary measure to help local authorities to continue to meet urgent needs in the face of Covid when they were expecting extraordinary pressures. Following our review of the provision in March 2021, which included consultations with stakeholders across the adult care sector, the decision was made to expire the provisions as they had not been used since 29 June 2020. I emphasise that point to any noble Lords who may be unclear on it: the provisions have not been used since then.
There was strong support to expire the provision from groups representing people with care and support needs. Local authorities were in a better position in terms of planning, support and the use of mutual aid than they were when the easements provision was first introduced. No local authorities have operated easements since 29 June. Only eight local authorities out of 151 operated easements before then. A report by ADASS showed that local authorities used easements in very limited ways, such as using streamlined templates for assessments, conducting virtual assessments and postponing reviews and rescheduling them to a later date. No council moved from Care Act eligibility to a human rights threshold.
I want to address the anecdotes raised by the noble Baroness, Lady Brinton. Let me be absolutely clear that no support was necessarily removed as a result of these easements. The department has worked with Think Local Act Personal—TLAP—and the Association of Directors of Adult Social Services to understand the impact on individuals. Across this research, there have been no concerns that the councils that enacted easements ceased to support people, nor data to suggest that any groups were adversely affected by the easements.
However, we noted that, due to poor communications, some people reported feeling that they were impacted by easements even in areas where easements were not operated. We have commissioned research via the National Institute for Health Research to explore the impact of easements on individuals. The outcome of this research will be published over the next year. Anyone who feels that they have not had the care and support they should have had should first place a complaint with their local authority.
I will now move on to the impact of Section 24 and the regulations made on it, since that was raised by a number of noble Lords. On 29 April 2021, the independent Biometrics and Surveillance Camera Commissioner published a statement on the regulations made under Section 24. It sets out that almost 1,500 individual biometric profiles have had their ordinary statutory retention deadline extended as a result of the regulations, thereby protecting against the loss of biometrics of individuals assessed as presenting a risk to national security. The commissioner commented that he is
“satisfied that the section 24 power has been used in a responsible and proportionate manner and only when scarcity of resources or time limitations meant that the biometrics of individuals assessed as presenting a real risk to national security might otherwise have been lost.”
He also stated that he has
“seen nothing to indicate that the police have applied the provisions in anything other than the manner intended: necessarily, temporarily and proportionately.”
Section 24 is a regulation-making power; no further regulations are being made under it. This is because the mitigations put in place by CT policing mean that it is confident that, despite the ongoing effects of the pandemic, no extension will be required.
On the question asked by my noble friend Lord Moynihan, I express massive sympathy for all those missing out on important rites of passage, such as graduation, and other important events in the calendar, particularly for our young people. There cannot be a noble Lord in this proceeding who does not have an anecdote of this nature from their own friends and family group. We look forward to the day when we can change these arrangements; that day is drawing closer every moment.
I will say a word about tenants and residential tenancy to my noble friend Lord Bourne. On 12 May, a statutory instrument was laid that extended longer notice periods for residential tenancies until 30 September. My noble friend asked about the possibility of further financial support for tenants; I will take his questions back to the department and write to him accordingly.
In response to question from the noble Lord, Lord Scriven, about when the regulations will come into force, I assure him that they will come into force as soon as possible, once approved by both Houses of Parliament, and will be signed by a different Minister in the department.
The noble Baroness, Lady Brinton, asked about provisions for CEV individuals. I assure her that these have not been publicly announced and that the Secretary of State’s statement, which will occur in another place shortly, will provide some information on that.
On my noble friend Lord Moynihan’s point about Wembley, these events are part of the events research programme, which is why they are allowed to have large crowds. They are essential to our understanding of Covid transmission.
The noble Baroness, Lady Fox, asked whether we can go further and faster with the expiry of the Act. I can confirm that the next six-monthly review of the Act will take place in September; we are certainly assessing the remaining powers with this in mind. It is too early for me to make further proclamations on the decisions to be taken in September or in advance of the next review date for step 4 of the road map. Noble Lords will have listened to my Statement last week on the review of the data. We have to be cautious in our journey along the road map but we have reason to be optimistic about the future. More and more people are receiving the vaccine and giving us greater protection.
I thank everyone for participating in this debate and for their sacrifices throughout the pandemic.
The Grand Committee stands adjourned until 4.55 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021
Considered in Grand Committee
That the Grand Committee do consider the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021.
My Lords, the draft Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 were laid before this House on 8 June. I am pleased to introduce this instrument. Subject to approval, these regulations will deliver a key commitment set out in Government’s Green Finance Strategy for
“large asset owners to disclose in line with the TCFD”—
the international, industry-led Task Force on Climate-related Financial Disclosures—
“recommendations by 2022”.
These measures will see the UK become the first country in the world in which trustees of occupational pension schemes are statutorily required to consider, assess and report on the financial risks of climate change within their portfolios.
The regulations impose requirements on trustees of larger occupational pension schemes, authorised master trust schemes and, once established, authorised collective money purchase schemes for the identification, assessment and management of climate-related risks and opportunities. This includes requirements relating to governance, strategy and risk management as well as requirements to select and calculate climate-related metrics and to set and measure performance against targets.
Trustees will be required to meet these climate change governance requirements, which underpin the recommendations of the TCFD, and to report on how they have done so in line with the task force’s recommendations. Details of steps that should be taken to meet the requirements are included in the statutory guidance to which trustees must have regard. The regulations also confer compliance powers on the Pensions Regulator to enforce the new requirements.
Among other requirements, trustees will need to report on the risks that affect their portfolio, on how their investment strategy—and, in the case of defined benefit schemes, their funding strategy—would respond to different temperature rise scenarios, which will include consideration of the strength of the employer covenant, on the emissions attributable to their assets, their emissions intensity and their performance against targets that trustees have set.
The largest schemes and authorised schemes will be captured from 1 October 2021. From 1 October 2022, the regulations will apply to more than 70% of pension assets and more than 80% of pension members. The Government have committed to review the effectiveness of these regulations and statutory guidance in 2023. This will include the identification of any barriers, gaps and inconsistencies, as well as an assessment of whether the regulations remain appropriate and whether they should be extended to smaller schemes. I am satisfied that the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 are compatible with the European Convention on Human Rights.
Climate change is the defining challenge of our time. Our response will determine the future health and prosperity of our world. It is a major systemic financial risk and a threat to the long-term sustainability of UK private pensions. That is why it is vital that we act now. With almost £2 trillion in assets under management, all occupational pension schemes are exposed to climate-related risks, and such risks present a significant threat to the retirement outcomes of millions of savers. This threat presents itself through the risks to investments of a warmer planet and those associated with the transition to a low-carbon economy, for which all investors must be prepared. If we do not take steps now to address the risks climate change will bring shocks and long-term sustained damage to our economy. It is therefore vital that we ensure that pension scheme governance is as robust as possible to withstand these risks in both the short and long term.
It is for this reason that the Government have sought to prioritise climate change risks and opportunities in this instrument over the broader risks associated with environmental, social and governance considerations. Climate change is unique in the severity of investment risks associated with its impact and the pervasiveness of such risks. It is also for this reason that the Government have wasted no time in consulting on these regulations and bringing them before the Committee for debate.
The instrument provides that trustees of schemes with £5 billion or more in relevant assets and all authorised master trusts will be required to meet the governance requirements from 1 October this year and to produce and publish climate risk disclosures within seven months of their scheme year end. By adopting a phased approach, which sees the requirements fall on the largest schemes first, we expect such schemes to utilise their governance expertise and capacity to set an industry standard to those with at least £1 billion in relevant assets, who will have to meet the same requirements from 1 October 2022.
The instrument requires trustees to put in place processes of governance and risk management to assess the impact of climate change on their investment strategy and, where applicable, their funding strategy. It also requires trustees to conduct scenario analysis, calculate climate-related metrics and to set and measure performance against targets. These activities are all about trustee action, and details of steps that should be taken to meet these requirements are included in statutory guidance to which trustees must have regard. They go way beyond disclosure alone and therefore do not materially overlap in intent or effect with existing ESG policy disclosure requirements.
Activities required by these regulations that rely on data from other participants in the investment chain, such as scenario analysis, calculating metrics and reporting against targets, must be carried out by trustees
“as far as they are able”,
which means that trustees should take all such steps that are reasonable and proportionate in the particular circumstances, taking into account the costs, or likely costs, to the scheme and the time required to be spent. Nevertheless, impacts from climate change are already being felt. Trustees must act now and should not wait for perfect data to emerge before taking action to manage climate-related risks and opportunities. There is more than enough data to begin work with.
Let me be clear: these measures do not direct trustee decisions or seek to increase pressure for blanket divestment of pension schemes from high-carbon sectors. It is not for the Government to direct trustees to sell or buy certain assets, and these proposals do not create any expectation that schemes must divest or invest in a given way. I reiterate that these measures require trustees to identify, manage and assess climate-related risks. Ultimately, trustees retain primacy in any investment decisions they make following that assessment, whether it be the targets they set out or their wider investment strategy.
The effects of this instrument will be significant and transformative. By the end of 2023, the risks and opportunities climate change poses to £1.33 trillion-worth of pension savings will be assessed and published for all to see. Critically, this develops a system of accountability that we have never had before, and trustees will be required to show how climate change is likely to affect their portfolio.
To conclude, these measures cement the UK’s leadership in green finance. We were the first major economy to pass a net-zero emissions law, and now these measures on climate change risk and pensions are the first of their kind globally. I am sure noble Lords will agree that it is only right that pension scheme trustees take action to address climate change-related risks and protect the retirement savings of hard-working people. I commend this instrument to the Committee, and I beg to move.
My Lords, I am in favour of these regulations and I take this opportunity to thank and congratulate the Minister and her colleagues, to whom she has given much of the credit, on the work they have done on climate change. I will pass on the opportunity to say something more generally about the Government’s record on the issue, but here we are on the right track. This is not the end of the journey, of course, because there is always further to go.
Today, it is appropriate to pay tribute to all the work that was done in the Lords during the passage of the Pensions Scheme Bill. I was frustrated in my wish to take part, but no matter. The level of expertise as well as of concern about the issue was outstanding. I have thought of naming names, but having gone back and reread the debates it was interesting that there was clearly a collective effort in the House and behind the scenes. Those who took part know who they are, not least those taking part in today’s debate, and they are owed a sincere vote of thanks.
The adoption of these requirements is one element in a wider push to ensure that the effects of climate change become routinely considered in business and investment decisions. The adoption of these recommendations would also help a range of institutions better demonstrate responsibility and foresight in their consideration of climate issues. That will lead to smarter and more efficient allocation of capital and help smooth the transition to a more sustainable, low-carbon economy.
We must therefore welcome the recent move by the FCA to consult on a climate-related financial disclosure regime for asset managers, life insurers, and, not least in this context, FCA-regulated pension providers. That will be consistent with the recommendations of the task force on climate-related financial disclosure. The FCA states that its proposals aim to increase transparency and enable clients and consumers to make considered choices while remaining proportionate for firms. These proposals will need to be considered carefully as the term “proportionate” can hide a multitude of problems, but let us see.
One issue that arose during the passage of the Bill was the Government’s claim that their intention was to ensure effective governance of climate change risk but not to direct trustees’ or managers’ investments. The Minister reiterated that point in her remarks. This was specifically with reference to the proposed requirement that the governance of schemes align with the Paris Agreement’s objective of global warming of well under 2 degrees Celsius. During those debates, the Minister expressed the view that this could be tantamount to directing schemes’ investment, which the Government had ruled out. I have some difficulty here because my understanding is that progress towards the Paris target is now legally binding, not a matter of personal preference. The distinction being made is, in practice, without a difference. Ultimately this is going to affect investment decisions, or we will fail in the objective of combating climate change.
Another issue that arose in the debates on climate change during the passage of the Bill was use of the words “may” and “must”. I am pleased to report that in the regulations “must” is in the lead with 50 occurrences compared with 30 for “may”, but I am unclear what this means in practice. As a rough generalisation, it appears that “may” is used more in the context of enforcement, which means that discretion of some sort is being exercised by the appropriate regulator. It would be good if we had the possibility—at an appropriate stage, not now—for interested parties to discuss how this discretion will be exercised, which bodies will have enforcement taken against them, which will not, and what criteria are to be applied in making that choice.
Lastly, this is just to demonstrate that I am paying attention. Can the Minister assure us that the loss of a hyphen in the term “ear-marked scheme” between where that is defined in the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 and these regulations is of no significance?
My Lords, like the noble Lord, Lord Davies, I very much support this statutory instrument and welcome the measures that the regulations introduce. As has been said, the statutory instrument introduces new requirements for trustees of certain occupational pension schemes to make sure that these schemes are conducted with respect to the effects of climate change. Also, there is a requirement for reports to be published and powers given to the Pensions Regulator to ensure compliance.
These measures were widely supported during the passage of the pensions Bill; I echo the thanks of the noble Lord, Lord Davies, to the team who put so much work into them. They are much-awaited first steps, however, and we hope that they will have a far-reaching effect throughout the industry and the financial sector. Trustees and fund managers will need to become very knowledgeable about the financial risks of climate change and matters relating to it, and more particularly about the targets in the Paris Agreement. As a former trustee I must say that, for many, there will be a steep learning curve in being able to manage the requirements of these regulations. There is a reference to respondents who expressed concerns on the availability of data, key to climate change, in the notes on the consultation—the data will, of course, be important. The Minister said that there is plenty of data; there is, but the analysis of it will be demanding.
Trustees and fund managers will need a range of information to discharge these duties. What information will be made available about, for example, the eligibility of companies for investment? Has any progress been made about disclosure requirements on companies for current greenhouse gas emissions, and the projected impact of their business plans, assets and activities on future emission levels? Are there plans, for example, to create a register of low and zero-carbon investment opportunities at all levels of the investment chain, making it easier for everyone—from asset managers to pension fund managers and individuals—to understand the green options available and provide opportunities to promote and invest in innovation and creativity in green industry and commerce?
The finance sector needs to operate within a framework that steers resources into climate-friendly investments and away from climate-negative activities; for example, avoiding support for investments that may become stranded assets through activities such as opening new oil and gas fields or coal mines, which cannot operate in the long term and therefore will not deliver returns to investors if the net-zero target is to be met. This requires a series of actions by government and financial sector regulators, ensuring better flows of information about climate risks and green investment opportunities for investors, lenders, insurers and other stakeholders, while providing the impetus for the financial sector to play its part in driving the action that reflects risks and opportunities in combating climate change and creating a low-carbon economy. I look forward to the Minister’s response.
My Lords, I welcome this important instrument. I thank the Minister for her introduction and the other noble Lords for their contributions.
The Explanatory Memorandum notes the evidence suggesting
“that we are currently on track to see 3°C of warming by the end of the century.”
That level of warming would cause changes that fundamentally shift how the planet behaves, including the breakdown of the global ocean circulation system, rainforests turning to savannah, ice sheets disintegrating, the spread of deserts and the collapse of farmable land. This could result in mass migration, famine, war and death. It could not be more serious.
As the Minister reminded us, climate change is expected to have a significant impact on pension schemes and their almost £2 trillion in UK assets due to both the physical and transition risks. It is good that we are starting to see action taken within the industry, such as Aviva announcing that its auto-enrolment default funds will aim to achieve net zero by 2050—that is some £32 billion of capital—or the BT pension scheme setting a goal of net zero by 2035 for its whole portfolio of about £55 billion. There is lots of good practice emerging in public sector DB schemes.
With the climate emergency getting ever more serious, today’s action is long overdue, so it is good that the Pension Schemes Act from which this SI derives addresses climate risk. Pensions Minister Guy Opperman described the proposals as “world-leading”, and the Minister today noted that the UK is set to become the first major economy to require climate risks to be specifically considered and reported on—but I gently say to the Minister that the grandstanding is a little ungracious and that no reference was made to the fact that the Bill was made greener only by cross-party working in our House.
When the Pension Schemes Bill was introduced as a Lords starter, rather than net-zero provisions there were zero climate provisions in the legislation—a gaping hole we highlighted at Second Reading. The Government then introduced amendments in Committee but they had to be strengthened through cross-party negotiation, led by my noble friend Lady Jones of Whitchurch and the noble Baroness, Lady Hayman, to ensure that trustees and managers had to take account of the Paris Agreement and domestic targets such as net zero. As a result of that work, “climate change” was mentioned in domestic pensions legislation for the first time. We are really pleased with this achievement.
Turning to the detail of the instrument, I have a number of questions—the Minister would be disappointed if I did not, but none of them should be very unexpected, so I hope she will be ready and able to answer them. First, the Pensions Regulator will put requirements on trustees to drive change among investment managers. But the regulator has acknowledged that without standardised and enforced data throughout the investment supply chain, trustees would find it difficult to access the good-quality data they will need to produce the qualitative and quantitative outputs required by the new governance and reporting requirements.
There is an issue because the two regulators, TPR and the FCA, are not fully aligned in time, and TCFD disclosures aligned to the Task Force on Climate-related Financial Disclosures are not currently required throughout the investment chain. As my noble friend Lord Davies mentioned, the FCA is currently consulting on proposals to introduce climate-related financial disclosure rules and guidance for asset managers, life insurers, FCA-regulated pension providers and issuers of standard listed equity shares; to require firms to reveal how they will take climate-related risks into account in managing investments on behalf of clients; and to produce a baseline set of disclosures in respect of their products and portfolios. But the FCA proposals will not be released until 2022, so we do not know how they will align with the TPR requirements.
In his Mansion House speech on 1 July, Chancellor Rishi Sunak announced the sustainability disclosure requirements to be introduced for businesses and financial products. The Treasury has said that these are intended to bring together and streamline existing climate reporting requirements and that the Government will work with the FCA to create a new sustainable investment label—a quality stamp.
Here come two important questions on this issue. First, can the Minister clarify how these sustainability disclosure requirements will interact with the rules for trustees arising from these regulations on reporting on climate risk? Secondly, can trustees rely on an FCA quality stamp as a reliable and acceptable source of data for meeting their disclosure requirements under these regulations?
Next, a word about scope. The Minister mentioned that these new governance requirements will apply initially to trustees of schemes with relevant assets of £5 billion or more, then from October next year they will bring into scope trustees of schemes with relevant assets of £1 billion or more. TPR estimated that the first phase would capture 102 pension schemes, or roughly 42% of all UK pension assets. The second phase would capture an estimated 351 schemes. The provisions would then, by the end of phase 2, cover approximately 71% of all UK pensions assets.
Here comes the third question: what, if anything, will be done to manage climate risk for the other 29% of pension assets? Will there be any requirements on them at all, or any action in relation to them? Some respondents to the TPR consultation argued that the DWP should commit now to bringing more schemes into scope in 2024. I get that they want a review, but why did the Government reject that commitment in principle to bring more schemes in? Also, what support will be given to trustees to help them meet these new obligations?
I have two final quick questions. One is on cost. The annual net direct cost to business is suggested as £6.2 million—roughly £12,000 for a scheme in year 1 and about £10,800 thereafter. Is the intention to provide any transitional funding, or will the Government monitor these costs so that they can decide whether help is needed for smaller schemes when they are brought into scope? Finally, will there be a central collection and monitoring process to review information from all industry reports to get a broad picture of the progress that schemes are making?
These changes are very welcome, but we still have a long way to go to ensure that the pensions industry and the Government manage climate risk better and reach net zero by 2050. I congratulate all those who worked so hard to get this instrument before us today. I hope that the example of the pensions Bill, where cross-party pressure in this House led the Government to a better place, is one that will set a trend for the future. I look forward to the Minister’s reply.
My Lords, I sincerely thank the noble Lord, Lord Davies, and the noble Baronesses, Lady Janke and Lady Sherlock, for their positive and direct questions on these regulations. I also start with an apology: it was remiss of me not to acknowledge the excellent cross-party work that got the pensions Bill on to the statute book. It was a very good example of how the House works well together. I hope that it will continue.
I say to the noble Lord, Lord Davies, that I am very happy to meet and to hold discussions on discretion. My office will seek to organise that.
I will try to deal with some of the questions raised. The noble Lord, Lord Davies, asked about the UK’s statutory commitment to net zero, and said that it needs to be reflected in pension scheme policies. The UK signed up to the Paris Agreement and to net zero, and to making the necessary changes in taxation, spending and regulation to achieve that target. We are making the changes to achieve that. We have not signed up to mandating every organisation and household to set net-zero targets, but we are encouraging organisations to commit to net zero in a way that works for them and to publish a plan to do so.
The noble Lord, Lord Davies, also asked what TPR’s strategy will be to ensure compliance with these new measures. TPR must issue a mandatory penalty in cases where the TCFD report is not published on a publicly available website that is accessible free of charge, as required by the regulations. In all other cases where TPR believes requirements are not being met, it has a range of enforcement options, including the discretion to issue a penalty notice. TPR also has the opportunity to publish the names and details of any breaches, which can be a powerful deterrent. TPR today published its consultation and compliance penalties. The consultation will be up for response until 31 August.
On to the homework set for me by the noble Lord, Lord Davies, on the issue of the hyphen. I will go away and find out. I will write to the noble Lord and place a copy in the Library.
The noble Baroness, Lady Janke, asked about the register of green investment options. Again, I will need to write to her on that issue.
The noble Baroness also asked about the status of the statutory guidance, and asked why there is also non-statutory guidance. In complying with the requirements in this instrument, trustees are required by new Sections 41A and 41B of the Pensions Act 1995 to have regard to statutory guidance prepared by the Secretary of State. This requirement does not apply to the trustee knowledge and understanding provisions, which will be made under different powers; the guidance accompanying those provisions is therefore not statutory guidance but is intended as best practice. Trustees are not required to have regard to it but they are encouraged to do so. Trustees of other schemes may also find the statutory guidance helpful when implementing climate change risk governance and reporting on a voluntary basis.
The noble Baroness, Lady Janke, talked about the lack of available data and reporting standards. The present data coverage does not prevent schemes taking steps to assess their exposure to climate risks, and the quality is improving. Our TCFD reporting requirements, as well as the requirements of others—including the Financial Conduct Authority and BEIS—will accelerate this progress significantly.
The noble Baroness, Lady Sherlock, asked whether trustees will be reliant on data from others to do proper analysis. She also asked whether the same requirements are being applied across the investment chain. The Government have already announced their intention to make TCFD-aligned disclosures mandatory across the economy by 2025, with a significant portion of mandatory requirements in place by 2023. This will produce regulatory alignment through the investment chain, which will capture asset managers, workplace personal pension schemes, UK-registered large private companies, insurance companies and banks by the end of 2023. This will increase the flow of data, which is vital for trustees to embed effective climate risk governance. The DWP has worked closely as part of a cross-government task force to ensure consistent climate-related financial disclosures up the investment chain.
The noble Baroness, Lady Sherlock, said that lots of schemes have not taken action. Actually, 85% of DC pension savers are in a scheme that has set a net-zero target.
The noble Baroness asked why we have limited the threshold for being in scope at £1 billion. All savers have the right to benefit from effective governance and the reporting of climate change risk, regardless of the size of the scheme, but the Government do not wish to impose disproportionate burdens on trustees. Schemes with £1 billion or more in assets have the resources in place to allow them to implement and report on the range of governance and assessment measures set out in the regulations to a high standard, with a high probability of overall benefit to the members. The largest schemes can set an industry benchmark, drive demand for products, improve data flow and, ultimately, drive down costs for smaller schemes seeking to do TCFD reporting in future. The Government have committed to reviewing the effectiveness of the TCFD requirements in the regulations and statutory guidance in 2023. This will assess whether the regulations remain appropriate and whether they should be extended to smaller schemes.
The noble Baroness also asked what smaller schemes not in scope should be doing to manage their climate risk. Trustees do not need statutory requirements to begin meaningful action. They have a fiduciary duty to protect their members’ interests, and everyone should act now. As well as the statutory guidance, the DWP played a key role in producing and publishing the Pensions Climate Risk Industry Group guidance, which is a useful resource for all trustees whether they are in the scope of the new requirements or are just starting out.
The noble Baroness talked about the requirements announced in the Chancellor’s Mansion House speech. We will write to her on those.
Of course, the important issue of cost was discussed; indeed, it was mentioned by the noble Baroness, Lady Sherlock. We will monitor and review the cost, including in terms of what support is needed by trustees to fulfil their obligations.
Finally, the noble Baroness, Lady Janke, said that too many trustees do not have the necessary skills and asked what we are doing about it. Subject to the approval of this instrument, we intend to make regulations requiring trustees to have sufficient knowledge and understanding of the identification, assessment and management of climate-related risks and opportunities to enable them to exercise their functions properly. Those regulations were published in draft alongside our consultation response in June.
The noble Lord, Lord Davies of Brixton, reminded us that this is just the start. It is. I am sure that we will work together to put these regulations into action and review them as time goes on.
I conclude by reiterating the effect of this instrument. It will ensure that the largest occupational pension schemes, as well as authorised master trusts and authorised collective defined contribution schemes, have measures in place to identify, assess and manage climate-related risks and opportunities. The better management of climate risk will be in our interests, whether as pension savers or as pension takers and whether our interests are financial, environmental or social. I commend this instrument to the Committee.
My Lords, that completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.
Committee adjourned at 5.30 pm.