Monday 5 December 2022
Arrangement of Business
My Lords, good afternoon. I remind the Committee that if there is a Division in the Chamber, the Committee will adjourn for 10 minutes from the sound of the Division Bell.
Combined Authorities (Mayoral Elections) (Amendment) Order 2022
Considered in Grand Committee
That the Grand Committee do consider the Combined Authorities (Mayoral Elections) (Amendment) Order 2022.
My Lords, I will also speak to the draft Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2022, and the draft Police and Crime Commissioner Elections and Welsh Forms (Amendment) Order 2022.
These instruments were laid before this House on 1 and 3 November 2022. If approved and made, they will amend existing secondary legislation to take account of a change made by the Elections Act 2022. That change was to bring in first past the post voting for the election of mayors and police and crime commissioners, replacing the supplementary vote system, which is currently used for those elections. The change in principle was expressly tested during the passage of the Elections Act by an amendment brought to a vote on Report, and this House determined that the change should remain part of the Act.
The statutory instruments before us today are an essential consequence of that change. Elections to the roles of combined authority mayor, local authority mayor, and police and crime commissioner all rely on similar provisions in legislation for their conduct, forms and ballot papers. For this reason, we are considering these three statutory instruments amending those provisions together today.
For elections to be conducted consistently and fairly, it is necessary for secondary legislation to prescribe their conduct and to provide templates for many of the key documents that will be used in those elections. These measures will provide support to council officers and act as an assurance to the voting public: everywhere these elections are held, they are undertaken using the same ballot papers, with no variation in the form of that ballot paper from one place to the next.
Under first past the post, mayoral and PCC elections will no longer require a second round of counting in the circumstances where no candidate receives more than 50% of the vote. These statutory instruments will amend legislation to reflect the new, simpler count process. Ballot papers are changing too, showing one column of boxes against the listed candidates, with voters directed to put a cross in the box next to a single choice. Detailed instructions for the printing of ballot papers and forms, and instructions for postal voting, are also amended to reflect the change to first past the post.
Without these statutory instruments being approved and made, election officers will not be able to effectively deliver elections for these roles. The provision of the Elections Act 2022 making this change is now in force and the change will first apply to any mayoral or PCC elections or by-elections held on or after the ordinary election day in May 2023. That is 4 May 2023, being the first Thursday in May. An instrument subject to the negative resolution procedure, making similar changes for elections to the Mayor of London, was made on 26 October and laid before Parliament on 31 October. That instrument is now in force and will first apply to any by-election or elections held on or after 4 May 2023.
In drafting these instruments, my department and the Home Office have consulted the Electoral Commission on the text and we are grateful to it for its technical comments, which we have taken into account.
In conclusion, these instruments are essential to ensure that council officers can properly implement the move to first past the post voting for elected mayors and police and crime commissioners. That change, which Parliament has approved, will mean easier voting for these posts, with more straightforward counting of votes and with clearer, quicker results. I beg to move.
My Lords, I thank the Minister for setting out the instruments so clearly. She has already answered one of my questions.
I have always been in favour of combined authorities and the devo deals that we have been seeing. I realise that this is beyond the scope of these instruments, but it has brought new dimensions of government and administration to swathes of the countryside. I applaud that. This has been happening not only in urban areas but in rural areas too. Can the Minister indulge us by updating the Committee on where we are on devolution deals—on Cornwall and Yorkshire, for example? I simply do not know. I am happy for this to be done in writing, particularly as it is beyond the scope of these instruments, if she cannot do so now.
I will not delay the Committee long. I had one more substantial question related to today’s orders and regulations. I appreciate that they are largely about first past the post for combined authorities and local government, which is consistent with the referendum held on voting systems under the coalition Government. However, in the United Kingdom today, we have myriad different electoral arrangements, particularly in Wales, where we seemingly have some anomalies, such as the voting age for local elections now being 16 while for police and crime commissioners it is 18. Can my noble friend the Minister say something about the Government’s thinking across the board?
Westminster retains some important legislative and administrative rights in relation to electoral arrangements, which now seem to be a smorgasbord of different positions, particularly in Wales, where the Senedd elections are done by a form of proportional representation—the additional member system—while police and crime commissioner elections are first past the post. Local government is now partly first past the post, but local authorities can, if they want, go down a different route with the single transferrable vote. There are some inconsistencies. Can the Minister say something on that? I am most grateful.
My Lords, may I pursue a slightly different issue, in relation to the Gould principle? As the Minister identified, these instruments would first be implemented on 4 May next year. I raise this not solely because of these orders and regulations but in relation to the recent change that, in England, moved the requirement for signatures for nominations for local government elections from 10 to two. This change was actively supported by the noble Baroness, Lady Hayter, from the Labour Benches, and the noble Lord, Lord Rennard, from the Liberal Democrat Benches. We welcomed the change, but I have a sneaking suspicion that it cannot apply to by-elections before 4 May because the Gould principle has been applied.
For the benefit of my noble friend, I identify the Gould concerned as Ron Gould, rather than the other Goulds it might be. For the sake of brevity, this is a limited quote from the Gould report of 2007. It said, on the question of six months:
“If, as proposed, a Chief Returning Officer is appointed for Scotland”—
the Gould report related to Scottish elections—
“a clause might be added to the provision permitting the time period to be waived by the CRO following an assessment of the legislation’s operational impact.”
When the Secretary of State made a report to the Commons on the Gould report, he said:
“Provided suitable safeguards can be found, as Mr. Gould’s report encourages, I am prepared to accept that recommendation for elections to the Scottish Parliament.”—[Official Report, Commons, 23/10/07; col. 166.]
That recommendation was that six months would apply but could be waived in certain circumstances.
I am concerned that we are seeing, in effect, a concreting and misinterpretation of that six-month rule, when it is not necessary on some occasions. It would be helpful to EROs and government in general to speed up that process. I am not asking the Minister to comment in detail at this stage on the Gould report and the principle, but I want to put on record my concern about what was originally intended to be a flexible principle and is now beginning to develop into an inflexible one.
My Lords, I start by referencing my interests as a councillor in Kirklees and a vice-president of the Local Government Association. I will speak about three areas: the principle of the proposals, the practicalities and accountability. I appreciate that the passing of the Elections Act made these changes inevitable and I am not opposing them today, but it is worth pointing out some of the consequences of what is being done.
The Minister cited the 2019 Conservative manifesto commitment, also mentioned in the Explanatory Memorandum,
“to support the First Past the Post system”.
It does not say anything about changing back to first past the post. The 2011 referendum was not about all elections having the alternative vote system, only parliamentary elections, so citing that example for this instance is not fair—it does not support the argument. If the Government want to make a change, they should just say so and not try to fluff it up with stuff that is not accurate.
The Explanatory Memorandum also states that moving to this system
“makes it easier for the public to express a clear preference”.
I suppose it depends on what is meant by “a clear preference”. I would not consider 40% a clear preference, which is more than likely the outcome of the changes being made. In my view—and, I think, in most people’s—a clear preference would mean a person achieving over 50% of the vote, one way or another.
The only European country that uses first past the post is Belarus. Here we are, regressing to an electoral system so out of favour in European democracies that it is used only in a dictatorial country where the election was overtaken by a coup. I suppose what I am saying is that it is a backward step.
The third principle being argued here is that first past the post reduces complexity. Voters are cleverer than we give them credit for. They can vote in many different ways. I think I have attended all the mayoral elections in my part of the world, and the number of spoiled ballot papers, which is the example used in the arguments for these changes to say that the method is difficult, is minimal. More often than not, spoiled ballot papers show voters expressing very clear views about the election altogether—I will not quote some of the comments I have seen. It is not about failing to understand the voting system; it is about not being happy with how it is done at all, or the purpose of it.
The next argument is that it will save money. This was a struggle. The argument is that it will save about £1.7 million over 10 years across the whole of England and Wales. You are pushing an argument a bit when you get to that stage. To give an example of the number of spoiled ballot papers, I could not find the full election results—including the spoiled ballot papers, turnout and so on—for the last West Yorkshire mayoral election in 2021, but I found them for one of the districts. Out of roughly 80,000 votes cast, only 600 were spoiled, in various ways. That is fewer than 1%—more or less what it is for most elections.
The Government are making arguments about saving money and time—that is pushing it as well; I have attended all the counts for these elections, and they all get done in the periods set by election administrators. They argue that it helps people understand, that it will not be complex and that it will save money and time—all very flimsy arguments, as the supporting evidence shows.
If the Government want to go back to first past the post, so be it. It will have a knock-on effect on the way mayors in particular but also police and crime commissioners will be viewed by their residents. At the moment all mayors, because of the way the votes are redistributed, attract more than 50% of the vote. There is a legitimacy which will no longer be there if, as in West Yorkshire, first past the post gives the currently elected mayor just 40% of the vote. If she gets elected on that figure, those of us who did not cast our vote for her will not necessarily regard her as speaking for all of us, because she will not. If someone in a position such as a mayor or police and crime commissioner—a single individual speaking for a very large number of people—attracts less than half the support of those who voted, the legitimacy of the decisions they make will attract more criticism and challenge. That is not in the interests of good governance. It is a shame that that will happen, but it will.
I shall say just one thing about police and crime commissioners. When the first election for police and crime commissioners was not held on the same day as any other election, where I am in West Yorkshire a staggering 17% of the electorate decided to vote. Since then, the Government have always timetabled those elections to be on the same day, generally, as those for local authorities—to make sure that more people vote, I guess. But there was a by-election in North Yorkshire last November. About 20% of people voted in that by-election for a new police and crime commissioner, which should send everyone a message about how people view these positions. They see them as irrelevant to their lives; they have not made this huge difference in the accountability of policing for local people.
There is a challenge for the Government in considering good governance and accountability for both mayoral and police and crime commissioner decisions. We have had police and crime commissioners for a while now, and you would think that, if the public had warmed to them and could see that they made a difference, they would be more willing to cast their vote for them. The fact that they do not and that there is constant criticism of that position is something the Government need to think about again. They need to think about having one person in an area—although now they are combined, are they not? We have a West Yorkshire mayor who also deals with transport, the police and goodness knows what else, with just a little scrutiny situation underneath it all. This is no way to run a big organisation. No private company would organise in that way; it would have some independent people challenging and questioning. The fact that that is not happening with the mayor—except in London, of course, where there is a better set-up—is unacceptable in terms of democracy and accountability.
With those remarks, the Minister will be pleased to hear that I have concluded.
First, I refer noble Lords to my entry in the register, which states that I am still a local councillor in Burnley.
The regulations and orders under consideration today will bring forward first past the past for a range of elections. While I disagree that this policy should be the focus of the Government’s attention amid the cost of living crisis, these instruments would implement a decision already made as part of the Elections Act. For that reason, I shall not return to the same arguments made during the debates on that legislation, but I have a series of brief questions, which I hope the Minister can answer.
First, the Explanatory Memorandum and the debate in the other House seem to suggest that the only consultation was with the Electoral Commission. Can the Minister confirm this? Does that mean that no local authorities were engaged as part of this process? Did the Government speak to the Association of Electoral Administrators? Secondly, the memorandum says that this will save £7.3 million. Can the Minister explain this figure? Finally, when will the public awareness campaign begin so that voters in May know that they must change how they vote at the ballot box? I hope the Minister can provide assurances and, as always, I look forward to her response.
I thank noble Lords for their contributions to the debate. It is probably best if I go through the speakers in turn. First, I agree with my noble friend Lord Bourne that we have elections in a lot of different ways, across the United Kingdom. There are two points for me. First, the Elections Act 2022 started to make sure that many, at least in England, were more similar. There is nothing we can do about, for example, the Welsh Government and the way they have their elections; that responsibility is devolved to them, apart from for general elections. We can only talk to them, but that is what devolution is all about and we welcome those changes.
As for devolution in this country, the Chancellor’s Autumn Statement mentioned a number of authorities that were looking at different ways of combining so that they could have devolved responsibilities. I will get an updated briefing on that, let my noble friend have it and put a copy in the Library, because things in that area are moving quite fast and I should like him to have that up-to-date information.
I thank my noble friend Lord Hayward; I have noted the Gould principles. We just need to remember that returning officers need plenty of time and notice to make some of these changes to elections: they have to make different order forms and ballot papers, and train staff, if things change. The Gould principles can be flexible, as we have seen, but a certain amount of time is needed and we should be getting this through as soon as possible for May 2023.
Moving on to a number of questions from the noble Baroness, Lady Pinnock, the voting system used to elect our representatives sits at the heart of our democracy and is of fundamental importance to the Government. We were elected on a manifesto that included a commitment to continue to support the first past the post voting system. The Government believe that that system is a robust and secure way of electing representatives that is well understood by voters and provides for strong and clear local accountability. It also ensures a clear link between elected representatives and constituents in a manner that other voting systems may not.
The Government’s manifesto position in favour of first past the post also reflects that in the 2011 referendum there was a significant vote, as the noble Baroness will remember, in favour of retaining first past the post for parliamentary elections, when the proposal to introduce a transferable vote system—the alternative vote—was rejected by a majority of 67.9% of voters. Voters have had their say. It is simple and understood, and the Government have made it very clear in our manifesto that we support it and will move forward by changing any elections that we can to make those systems simpler.
The noble Baroness also brought up challenging spoiled ballots in other electoral methods. To give your Lordships an example, around 5% of votes cast in the May 2021 election for the Mayor of London, under the existing supplementary vote system, were rejected. The noble Baroness said that it is normally about 1%, but 5% is five times that. The Electoral Commission report of 2015 on the general election found that the percentage of votes rejected in the supplementary vote elections, held on the same day as the general election, was 12 times higher than for the first past the post vote.
Does the Minister have a breakdown of the spoiled ballot papers? As she will know, having been involved in elections for many years, rejected ballot papers are spoiled for a number of reasons. Sometimes voters do it deliberately, writing “None of the above” or words to that effect—sometimes quite strong words—or deliberately voting for every candidate. Those papers are spoiled not because the voter does not understand but because they reject all the candidates who are standing or for other reasons. Lumping it all together like that does not reflect validly what went on. I gave an example from Wakefield district where less than 1% were rejected for valid reasons of obviously not understanding the way the election system worked.
The noble Baroness is quite right: the issue of spoiled ballots is complex. Ballots can be spoiled for many reasons. This can also reflect how the electorate is feeling at the time. I think we have all seen that when we have been closely involved in elections.
The noble Baroness also brought up the issue of savings. The savings referred to in the Explanatory Notes are from the findings of the impact assessment. As a responsible Government, we always undertake impact assessments. The decision was taken to do that assessment on the principle of FPTP. There is a saving, and we have to communicate that.
The noble Baroness also raised PCC elections and turnout. I quite agree with her. However, I am not sure that it is up to the Government to ensure that our communities and the electorate understand the work of PCCs. I would challenge PCCs and suggest that they need to get out and tell their communities what they are doing on their behalf. They have been around a long time. The percentage turnout is increasing, but I agree with the noble Baroness that it is not increasing enough, given the important work that they do.
I move on to the questions from the noble Lord, Lord Khan. The Electoral Commission was the only consultee, because it was a technical consultation. We just wanted to make sure that all the wording and technicalities were correct. The Electoral Commission will issue guidance to explain the votes and exactly what has to be done, and it will do it as soon as secondary legislation is available. As part of the Bill itself, we made it clear that any differences to the way our electoral system works had to be communicated. This will be done in plenty of time for the elections in May next year.
I have mentioned the impact assessment and the £7.3 million. It is published—this is something that we do. I am very happy to share that impact assessment, if the noble Lord would like to see it. We will let him have it, so that he has all the detail.
These orders and regulations will mean that the decision which Parliament has taken, that mayoral and PCC elections should be on a first-past-the-post basis, can be implemented effectively. They are an essential element in the legal framework sustaining our local democracy. Therefore, I commend the instruments to the Committee.
Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2022.
Police and Crime Commissioner Elections and Welsh Forms (Amendment) Order 2022
Considered in Grand Committee
That the Grand Committee do consider the Police and Crime Commissioner Elections and Welsh Forms (Amendment) Order 2022.
Animals and Animal Health, Feed and Food, Plants and Plant Health (Amendment) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Animals and Animal Health, Feed and Food, Plants and Plant Health (Amendment) Regulations 2022.
My Lords, these regulations were laid in draft before this house on 20 October 2022. The time that we have does not permit me to cover in detail all the amendments that these instruments make, but I shall do my best to cover some of the most significant points.
The first instrument makes technical amendments to various pieces of retained EU law and domestic legislation to ensure that they operate effectively in the following four areas after the UK’s withdrawal from the EU:
“Official controls and requirements on imports into and movements within Great Britain of animals, animal products, plants and plant products; the rules on animal welfare during transport; the rules on the marketing of plants and planting material; and the rules on the prevention, control and eradication of certain transmissible spongiform encephalopathies, a group of fatal diseases which include mad cow disease.”
This instrument also addresses various other deficiencies in retained EU legislation and corrects errors in earlier instruments made under the European Union (Withdrawal) Act 2018. The changes are, for example, to
“clarify that the appropriate authority can create or amend rules on penalties for non-compliance with these regulations and relevant supporting legislation with regards to the Official Controls Regulation and Plant Health Regulation; streamline the process for designating an appropriate authority as a competent authority responsible for carrying out official controls; and replace the existing obligation for the appropriate authority to make secondary legislation to address biosecurity risks from imports of animals and animal products with a power to make secondary legislation, helping to protect biosecurity by giving Defra the flexibility to address biosecurity risks through means other than regulations.”
The Plant Varieties and Seeds Act 1964 is amended to enable Ministers to make regulations via the negative resolution procedure to ensure that domestic secondary legislation, which captures the marketing of fruit, vegetables, and ornamental plants for planting, can be updated as required. This change will ensure that we can keep pace with changing requirements in this space. Corrective amendments make it clear to transporters, organisers, and keepers of live animals, that they must comply with the journey log requirements on protecting animal welfare in transport.
The second instrument makes modifications to the interpretation of 11 directives to ensure a continuing and fit-for-purpose imports system for animals and animal products entering Great Britain, to ensure that the legislative regime is up-to-date, enforceable, and easy to use. These modifications do not make policy changes. They are technical fixes to assist with the interpretation and application of the directives. This instrument also transfers the functions, including legislative powers from EU bodies, to the appropriate authority and makes the necessary changes to relevant import enforcement legislation.
Both instruments apply across Great Britain, although there are some exceptions. In the first instrument, Regulation 12 applies only to England and Wales, Regulation 13 applies only to Scotland, and Part 6 applies only in England.
In the second instrument, Part 1 applies across Great Britain, whereas in Part 2, Regulation 5 applies only to England. Regulation 6 applies only to Scotland, and Part 3 applies only to England and Scotland, with the Welsh Government having laid a mirroring instrument which applies in Wales. I will be testing noble Lords on that later; I hope it was clear. Both instruments also make a series of technical amendments to other pieces of legislation to ensure that they are fully operable.
In summary, the amendments in these instruments will ensure that official controls on imports of animals and animal products continue to be effective, that appropriate authorities have the relevant powers to make and implement necessary changes to imports legislation and that we have the legislative tools we need to safeguard our biosecurity.
To conclude, the devolved Administrations in Scotland and Wales have provided their formal consent for these instruments. Movements from Northern Ireland or the Crown dependencies are considered internal movements and are not affected by the modifications and amendments laid in these instruments. I beg to move.
My Lords, I am most grateful to my noble friend for presenting these two statutory instruments, which I support. I shall press him on a couple of issues.
Will both instruments definitely be retained and not excluded under the provisions of the EU retained law Bill currently in the House of Commons? Having done all this work, it would be a pity to waste it. In each case, will the Minister clarify which are the relevant public authorities?
On the trade in animals and related products regulations, as an MEP I spent many happy hours looking at the live trade in animals. As the MEP for Brightlingsea, I had the rather unfortunate experience of representing Brightlingsea when it closed down the live trade in Dover; there were demonstrations to prevent the live trade. My understanding is that it is still the case that one live animal is transported for every seven transported in carcass form, certainly from this country—now we are a third country, or third countries—to the EU. Are those figures correct, and are they still reflected in imports from the EU to this country?
Also, in the provisions of the regulations, is there a role for the Food Standards Agency in this regard? Whichever agency or authority it is, will it rely on notifications, or will it be able to do spot checks? It would be better for the Committee’s trust in the system—certainly my own trust—if it was able to do spot checks either on live animals or animal products, in frozen or fresh form. That would be very helpful to know.
I have two small further points to make that I am fortunate to have in my possession having attended the briefing from the Food Standards Agency on a completely different matter—its annual report for last year. Clearly, the regulations reflect the fact that, as a result of our departure from the EU, Ministers and food regulators are now directly responsible for food law for the first time in nearly 50 years. Therefore, the level of understanding, particularly at local authority level—not just when the products come into this country but when we are relying on local authorities to do inspections of food businesses at the level of outlets—is a matter of some concern.
Can my noble friend say how the Government plan to address concerns that I and others have? I do not want to put words into the mouth of the Food Standards Agency, but it has reflected this in its annual report, where it says:
“Firstly there has been a fall in the level of local authority inspections of food businesses. The situation is in the process of being repaired … but progress is being constrained by resource and the availability of qualified professionals.”
I understand that part of that problem is lack of skills and understanding that this is a potentially interesting and rewarding job. The endgame is to make the job of health inspectors attractive. The second problem the FSA raises is
“in relation to the import of food from the EU … To enhance levels of assurance on higher-risk EU food like meat, dairy and eggs, and food and feed that has come to the UK via the EU”.
This is potentially an extremely challenging area. It is just 10 years since we had the horsemeat scandal—or “horsegate”, as it became known. I accept that I could not tell the difference between a horse carcass and a cattle carcass, whether they had meat on them or not, but there should be someone out there looking at this and ensuring that horses imported into this country will not end up on our plate, passed off as beef. That case highlighted the importance of inspections, not just on an ad hoc basis but spot checks. It not only highlighted notifiable cases as they come into this country but, as the food penetrates through the food system, ensured that when we eat kebabs—I do not eat many of them—they are what they say on the product and not something else. With those remarks, I welcome these regulations.
My Lords, I thank the Minister for his introductory remarks to these two statutory instruments. I fear that I may fail his questions on the geographical applications of the SI. As with many statutory instruments that we have debated recently, the first—on animals, animal health, feed and food, plants and plant health—corrects errors in previous SIs.
The Explanatory Memorandum says in paragraph 7.2 that SI 2016/2031 will be reintroduced. Having been removed, it was considered redundant, but the removal appears to have left no mechanism available to enforce the regulation. The SI refers to three months’ imprisonment in all three devolved Administrations for non-compliance with the regulation. If there is no enforcement mechanism, can the Minister say how the prison sentences are to be applied and carried out? No doubt I have misunderstood this section of the SI.
Paragraph 7.4, as regards the OCR, refers to a designated competent authority but also states
“where no competent authority has been designated, the appropriate authority will be assumed to be the competent authority.”
Can the Minister say what qualification is needed to be classed as a competent authority, what is needed to be an appropriate authority, and who or what this is likely to be?
Paragraph 7.8 of the EM refers to Article 139, non-compliance and penalties for non-compliance, but states
“there are no powers to create any penalties to fulfil this requirement.”
In that case, is there any relevance to this SI?
Paragraph 7.13 refers to transporters, organisers and keepers of animals keeping a journey log, as set out in “Annex II”. I could not find any such annexe either in this SI or the Explanatory Memorandum. Can the Minister point me in the right direction for this?
I turn now to trade in animals and related products. This appears to be a much simpler SI. I note in paragraph 6.2 of the EM that the Welsh Government are producing an equivalent version. Can the Minister say whether this will be compatible with the one that we are debating this afternoon, or whether it will be radically different? Some difficulties could arise if it were different.
The instrument as a whole refers to animals and animal products. Might those products include ivory? What inspections and checks are taking place to ensure that ivory products do not slip through the net and enter the country illegally? Paragraph 7.2 covers the import of live animals and products of animal origin from the EU. Although this appears to relate only to imports, the wording allows the European Commission to make changes to legislation for intra-European movements of live animals. Is it possible that this could be used to export live animals to the EU? Could this also be used to circumnavigate the UK’s ban on the export of live animals? I should be grateful for the Minister’s comments.
Finally, the last sentence of paragraph 7.5 states:
“Movements from Northern Ireland or the Crown Dependencies are considered internal movements and are not affected by the modifications.”
Given the close proximity to the coast of France of the Crown dependencies of Jersey and Guernsey, is it possible for live animals to be exported via this route? I look forward to the Minister’s reassurance on that point.
Despite my comments, I am content for these two SIs to pass and await the Minister’s comments.
My Lords, we also support these SIs but, like other noble Lords, I have a few questions and points to make about them.
I am concerned by the number of SIs where we have seen errors—and I have raised this on a number of occasions—when bringing former European legislation into UK law. We know that five particular SIs are referenced in paragraph 3.1 of the Explanatory Memorandum for the Animals and Animal Health, Feed and Food, Plants and Plant Health (Amendment) Regulations, all originating from 2019 or 2020. It is concerning that we are still seeing this number of corrections happening. I have asked the Minister before to reassure us that it is not going to keep happening but, unfortunately, it seems to keep reappearing. We ask again for reassurance that this is being sorted out and we are not going to keep having statutory instruments to correct previous instruments that we have already passed.
The noble Baroness, Lady Bakewell, mentioned the issues with paragraph 7.2, outlining the penalty regime. As she pointed out, the penalty regime was considered redundant in 2020, which now means that there is no mechanism fully to enforce the plant health regulation as the existing penalty regime cannot be amended or added to. Can the Minister let us know what the practical impact of this has been, and what is the current situation going forward?
We also know that other areas have been corrected, including the accidental deletion of a requirement on the Secretary of State to charge fees in connection with certain functions carried out under the official controls regulation. It worries me how much the Government are trying to achieve in such a short space of time, and this is one of the reasons we are seeing so many errors. Again, I would be grateful if the Minister can confirm to the Committee that he is keeping a very close eye on the department in these areas, so we have as few errors as possible. We completely support the fact that we need to avail ourselves of opportunities to regulate ourselves differently, now that we are out of the EU, but we worry about the lack of legal clarity in the short to medium term while these errors keep taking place.
More positively for this SI, we are pleased to see that paragraph 7.1 of the Explanatory Memorandum notes that the devolved Administrations were consulted on the changes and consented to them. We welcome that collaborative approach being taken to relations with the devolved Administrations.
Very briefly on the second SI, the Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022, I reiterate what was said by the noble Baroness, Lady Bakewell of Hardington Mandeville, about the Welsh Government’s equivalent instrument. It would be helpful to have an update on what that says and how it works with what we are doing in Westminster.
The Joint Committee on Statutory Instruments reported on Regulation 9(5) regarding defective drafting around the definition of “enactment”. The question was whether this regulation can be used to amend Acts of Parliament. Again, clarification is needed but, also, what is the purpose of this power? Could the Minister give an example of how this would be used in practice?
Finally, I draw attention to some other questions noble Lords asked, particularly on live animal exports, which both noble Baronesses mentioned. It is important that we have clarification on the implications for import/export with the EU, compared to our legislation on this issue. The noble Baroness, Lady McIntosh of Pickering, also asked an important question about whether this will be retained law as we bring forward other legislation. The questions on food inspections were also important.
This worries me particularly because of the number of errors. It is important, when we put through these SIs, that we have real clarification on some of these issues. I look forward to the Minister’s response.
I am grateful to noble Lords for their interest in these instruments and their contributions. As ever, I will try to respond to all the points raised.
My noble friend Lady McIntosh raised some important points. The Retained EU Law (Revocation and Reform) Bill is part of the Government’s commitment to taking the necessary steps to put the UK statute book on a sustainable footing, following the exit from the EU. While the department assesses its retained EU law and plans for the REUL Bill accordingly, these statutory instruments ensure that the current legislation is operable. This is the last opportunity to make these technical fixes before the powers from the European Union (Withdrawal) Act to make these modifications expire at the end of this year.
My noble friend and the noble Baroness, Lady Bakewell, raised important points about designated competent authorities. The official controls regulation provides that the competent authority will be the appropriate authority—the relevant Minister in Great Britain—or any other authority to which such functions are conferred. The designations of competent authorities are set out across various pieces of secondary legislation or dealt with administratively, and vary across the different areas within the official controls regime. Amendments to Articles 3 and 4 of the official controls regulation do not alter any existing designations, but make the process for designating a competent authority clearer and ensure that the appropriate Ministers do not need to designate themselves as competent authorities.
My noble friend raised some very important points about live trade, which I will come to. The Food Standards Agency is an increasingly important body since we left the EU. She is right that it is now directly responsible for food safety and for working with local authorities to make sure that they have the necessary skills, understand the changing legal environment and are able to carry out their functions effectively to keep us all safe.
My noble friend is right to talk about meat imports. We have recently changed the rules to allow a much smaller amount of permissible material to be moved in an attempt to tackle the threat of African swine fever—a serious risk rampaging across Europe, which we are working really hard to prevent ever coming to these shores. We have exercised thoroughly with Defra and its agencies to work out how we would deal with an outbreak, but it is one we want to prevent happening in the first place.
My noble friend is also right to mention the horsemeat saga. I was in Defra at the time. Government, its agencies, retailers, business and a whole variety of other organisations learned a lot from that. Technology is our friend here. DNA sequencing has allowed us to detect when fraud is happening in our food system.
In response to the questions on the first instrument asked by the noble Baroness, Lady Bakewell, robust enforcement mechanisms are in place to ensure that the plant health regulation is fully complied with. These consist of offences and criminal penalties as detailed in the Plant Health etc. (Fees) (England) Regulations 2018, and equivalents in the devolved Administrations. The amendments in this new instrument ensure that these existing offences can be amended and new offences created to ensure that enforcement options remain complete and up to date for the plant health regulation.
In reference to the noble Baroness’s question about “Annex II”, the reference in paragraph 7.13 of the Explanatory Memorandum is to Annex II to Regulation 1/2005, on the protection of animals during transport. Annex II sets out the requirements for journey logs needed to transport live animals.
On designated competent authorities, as I have explained, the official controls regulation provides that the competent authority will be the appropriate authority—in most cases the Minister in the relevant country. The designations of competent authorities are set out across various pieces of secondary legislation or dealt with administratively and vary across different areas within the official controls regime.
The amendments to Articles 3 and 4 of the official controls regulation do not alter any existing designations but—noble Lords will be glad to know—make the process for designating a competent authority clearer and ensure that the appropriate Ministers do not need to designate themselves.
A number of noble Lords raised penalties relating to non-compliance. Article 139 of the official controls regulation, as retained, places a duty on the appropriate authority to ensure that rules on penalties relating to infringements of the official controls are in place. However, no corresponding power was retained to create new penalties or amend existing penalties set out in existing legislation. Therefore, this amendment is necessary to ensure that we have sufficient penalties in place connected to the official controls regulation and delegated legislation. It is an important enforcement measure.
In answer to questions about the Welsh statutory instrument, my information is that, yes, it is compatible with ours. We are working closely with devolved Governments to make sure that there is a seamless regime across Great Britain. If there is any difference, we will certainly let noble Lords know, but my information is that it is entirely compliant.
The answer to the point from the noble Baroness, Lady Bakewell, about ivory is also yes. Ivory is an animal product. This instrument provides only for animal and public health requirements and does not affect other policy areas such as those dealing with endangered species. The Ivory Act 2018 bans the trade in ivory, not only within the UK but to and from the UK. This instrument provides rules for imports into GB only; it does not cover exports of live animals but, as noble Lords will know, that is now a very small number and likely to be extinguished altogether. However, we have to have rules for the import and export of animals—for example, breeding stock, athletic animals such as racehorses and other types of animal. The provisions for movements between EU member states have been omitted. Exports to the EU are excluded from the scope of this instrument.
Live animals can come to Great Britain via Guernsey or Jersey as long as it is in compliance with the conditions on the import health certificate. References to Great Britain in the certificate published on the government website include the Channel Islands and the Isle of Man.
The noble Baroness, Lady Hayman, raised an entirely justifiable point. The longer I am in this role, the more respect that I have for those who draw up our statutory instruments and try to create a regulatory regime that is fit for purpose and able to be used by stakeholders effectively. It is incredibly complex. I accept that sometimes we get it wrong. I therefore hope I am open with noble Lords when that happens. It has been the department’s intention to correct errors when they are identified and to ensure that we have a fully operable sanitary and phytosanitary regime.
The noble Baroness’s question related to additional powers beyond those directly equivalent to the tertiary legislation-making powers that the commission has under the relevant EU marketing directives. The proposed amendment provides for an extension of existing powers to create a new category of material, of vegetative plants for planting. The widening of Section 29(1) of the Plant Varieties and Seeds Act 1964 to cover that new material confers new powers, most of which replace specific powers that previously existed under EU directives. If she needs more information on that, I am happy to write to her.
I think I have covered the points raised. I hope noble Lords will share my conviction of the need for these instruments. I am grateful for their supportive remarks. As I have outlined, these instruments are vital technical fixes and operability amendments. Parliamentarians in this House and the other place will, of course, continue to be able to hold me, other Defra Ministers and the department to account through all the usual means, for the ways in which the powers in this instrument are exercised. I commend the regulations to the Committee.
Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022.
Relevant document: 18th Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument)
Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022.
My Lords, I am pleased to open the debate on this instrument, which amends the Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) Order 1996, which I shall refer to from here as the 1996 order.
It aims to correct a minor and technical deficiency arising from the United Kingdom’s withdrawal from the European Union. Specifically, it updates a single cross-reference to Section 30(3) of the Small Business, Enterprise and Employment Act 2015, so that it matches an update made to that provision that was itself made during the withdrawal process. That is all this instrument does; it really is a very minor and technical amendment.
However, as noble Lords might expect, I will provide as much information as possible on the background to this instrument. The 1996 order is part of the legislation setting out the United Kingdom’s protection of trading interests regime. This also includes the Protection of Trading Interests Act 1980 and the retained version of Council Regulation (EC) 2271/96, the EU version of which is also known as the blocking regulation or the countermeasures regulation.
Together, these concern a matter vital to the interests of the United Kingdom as an international trading nation: they seek to protect against and counteract the effects of so-called extraterritorial domestic legislation made by other countries. That is legislation that seeks to enforce those countries’ economic and commercial policies beyond the normal bounds of national jurisdiction as recognised in international law.
To provide your Lordships with an example, most countries impose sanctions on persons that rely on either a territorial or nationality-based jurisdictional nexus. To be clear, when I say “persons”, I mean both individuals and corporations. However, certain countries claim extraterritorial jurisdiction to apply sanctions beyond their borders to all persons, regardless of their connection to the issuing country. These measures can be unilaterally deployed by third countries to coerce UK operators to withdraw from activities that are otherwise lawful in the UK—in effect, imposing their domestic law extraterritorially. These currently include US sanctions against Iran and Cuba.
Despite the title of the 1996 order, this instrument does not currently concern US sanctions against Libya. When the 1996 order was originally drafted, one of the proscribed sanctions laws for the purposes of the blocking regulation was the United States’s Iran and Libya Sanctions Act of 1996. This was removed from the list of proscribed US legislation in the blocking regulation by an amendment in 2018. In practice, this issue of extraterritorial sanctions legislation primarily arises in relation to the US, although it is right that we take similar action against other countries as the necessity arises.
By way of a more concrete example, consider a UK company with no connection to the US importing something—shall we say cigars?—to the UK from Cuba. It might find itself being denied insurance for those imports by a UK bank, on the grounds that providing such insurance could breach US sanctions laws. The protection of trading interests legislation provides that it would be unlawful for the bank to refuse insurance on this basis, protecting the importer’s trading interests and those of the UK more broadly.
The function of the retained blocking regulation and the 1996 order is then to protect UK entities from being forced to comply with such extraterritorial laws, including sanctions. The retained blocking regulation also allows UK entities to recover damages arising from the application of sanctions imposed by another country.
I now turn to the detail of the instrument before us. The 1996 order initially provided the mechanism for implementing the EU blocking regulation in domestic law by setting out the offences and penalties relating to that regulation. It has continued to provide the same function in relation to the retained blocking regulation.
Article 4 of the 1996 order, as amended in 2018, sets out various requirements for carrying out a five-yearly review of the regulatory provisions contained in that order. In particular, Article 4(4) cross-references and paraphrases Section 30(3) of the Small Business, Enterprise and Employment Act 2015. That cross-reference specifies that a review carried out under Article 4 must, as far as is reasonable, have regard to the rules on penalties applicable to infringement of the EC countermeasures regulation and the measures taken to implement them in other EU member states.
There are two deficiencies in the current drafting. First, the cross-reference to Section 30(3) of the Small Business, Enterprise and Employment Act 2015 is out of date and does not reflect changes made to that section following the UK’s withdrawal from the EU. Secondly, similarly, following our withdrawal from the EU, the EC blocking regulation no longer applies to or in the UK. Therefore, the instrument seeks to both update the cross-reference to Section 30(3) and remove the obsolete reference to EU law and EU member states. Instead, the replacement text provides for considering other applicable international obligations, in line with the current wording of Section 30(3). This will allow us to tailor our assessment to the UK’s relevant international obligations and properly reflect our departure from the European Union.
As I said at the beginning, the proposed amendment is a technical fix; it does not change His Majesty’s Government’s approach to this issue. Ultimately, the blocking regulation has a single and non-contentious objective: to ensure that commercial decisions by UK persons are not subject to the extraterritorial laws of other countries which exceed the boundaries of the international law on jurisdiction. The instrument laid before this Committee ensures that the 1996 order, as amended, remains fit for purpose. I beg to move.
My Lords, I thank the Minister for that explanation, which I understand. There seems to be a theme in these SIs this afternoon. The Explanatory Memorandum explains that the change is needed to
“correct deficiencies arising from the UK’s withdrawal from the EU”
“ensure consistency across the statute book”.
I must say that I smiled when I read this. Does it give the Minister pause for thought? As was referred to in the previous debate, who knows how many SIs would need to pass through Parliament to meet an arbitrary deadline for the removal of vast amounts of EU-derived legislation if we are dealing with this kind of problem this afternoon? What inconsistencies, deficiencies and unintended consequences does he think that would have while departments are also trying to get on with their primary purposes? My sympathies—as also expressed by the noble Lord, Lord Benyon—are with the officials having to pump these things out and deal with all the corrections, as we saw with the last group of statutory instruments and as we will see with the following ones.
However, since we are discussing this, I ask the Minister: do we remain totally in line with the EU in relation to sanctions, given that we know that sanctions applied by a number of jurisdictions are more effective than acting alone? The noble Lord, Lord Ahmad, readily agrees to and rightly emphasises that.
We know that, in relation to Cuba and Iran in particular, we are not always in alignment with the United States. That is one reason why we need this SI. We also know that sanctions applied to companies by the United States have a chilling effect far further and that even if the UK exempts companies from sanctions, which is appropriate, their concern about ending up in the US courts can mean that they nevertheless pay particular heed to the US sanctions. That is not really dealt with by this tinkering with the deficiency.
Can the Minister say what conversations are occurring in regard to Cuba, for example? There was a significant thawing of relations between Cuba and the United States in recent years, particularly since the end of Castro’s period. I am slightly surprised that we need to deal with some of the restrictions put in place in earlier years.
Can the Minister also update us in relation to Iran? That is another area where we have not always been in alignment with the United States. For example, we and the EU support the Iran nuclear deal that President Trump pulled out of. I wonder whether we are more aligned now as attempts are made to reinstate that nuclear deal, which was negotiated primarily by the noble Baroness, Lady Ashton, within the EU.
As I said, my sympathies are very much with the officials having to deal with this, but it is nothing by comparison with what the Government apparently wish to do over the next year. I would like the Minister to comment on that and I look forward to his general response.
My Lords, I thank the noble Viscount, Lord Younger, for his characteristically thorough and detailed explanation of this regulation before the Committee. I gave notice to him that I would be brief, and I intend to keep to that.
As we have heard, this SI updates the cross-reference in Article 4(4) of the 1996 order to reflect the wording in Section 30(3) of the 2015 Act, as amended by the EUWA 2018, and remove the reference to the EU countermeasures regulation. That is the sexy bit of what I am going to say.
Obviously, this side of the Committee supports the regulations, but I have a couple of questions for the Minister, if he would care to speculate. First, what would the implications have been if this had not been fixed—can he speculate on that? Secondly, are any further changes expected or anticipated, especially given that the previous update to legislation seemed to have missed these specific updates which are now before the Committee? With that, I shall leave it to the Minister to consider briefly, and perhaps he can give us a response.
My Lords, I thank the Committee for its response and thank the noble Baroness, Lady Northover, and the noble Lord, Lord Lennie, for their general support for these regulations. I will do my best to answer the rather rapid series of questions that cropped up.
I start by gently saying to the noble Baroness, Lady Northover, that she asked a few slightly leading questions about pausing for thought and inconsistencies and deficiencies. I ask her to forgive me for saying so, but we have left the EU and we need to make the very best of it. This is part of that, and however many SIs we need to take through this Committee or indeed the Chamber, that is the way it should really be. But I hope I can answer some of the noble Baroness’s questions as well.
On her question about Cuba, the UK considers that the continued US embargo against Cuba is counterproductive, and we consistently vote in support of the annual United Nations General Assembly resolution calling for it to be lifted. The UK continues to consider the activation of Titles III and IV of the Helms-Burton Act, which strengthen and continued the embargo against Cuba, to be contrary to international law. We have made our position very clear on that and regularly engage US officials on this issue through our embassy in Washington, as well as with the US embassies in Havana and London. That gives a very much high-level answer to the question, which I hope very much helps the noble Baroness.
On the noble Baroness’s question about Iran, it is fair to say that we are all appalled by what is going on there and we will continue to hold Iran to account for its repression of women and girls and the shocking violence it has inflicted on its own people. Across international fora and working closely with our partners we will continue to expose the regime’s appalling human rights violations, pursue accountability and amplify the voice of the Iranian people. I note that the noble Baroness raised the issue of a nuclear deal; something may be forthcoming on that in a moment and, if it is not, I shall certainly write to her, because that is germane.
The noble Lord, Lord Lennie, asked a couple of questions. I think one of them was about what happens if this instrument does not pass—in other words, how significant is this SI for life, if I may put it that way. The DIT could be expected to then publish a report regarding penalties applicable in the EU and measures taken to implement EU law, specifically EC Regulation 2271/96, by EU member states, notwithstanding that the EU law in question no longer applies to the UK. That is a slightly detailed answer. Therefore, it is important that we pass this legislation.
On the question raised by the noble Baroness, Lady Northover, of whether we remain in line with the EU on sanctions, she will be aware that this instrument does not concern UK sanctions directly. However, we continue to work closely with the EU on sanctions and seek to align where appropriate. On the question, from the noble Lord, Lord Lennie, of whether any further changes are required, the answer is no. I hope that is a very succinct repeat of his question and a succinct answer.
As I said earlier, this amendment is very much a technical fix. I am gaining a reputation for taking through some rather detailed minor and technical legislation, but nevertheless, as ever, each piece is important in its own way. The instrument does not change the Government’s approach to this issue or any other diplomatic or trade issue. It simply updates the 1996 order to reflect that the United Kingdom has left the European Union. Nothing in this regulation represents a change for British businesses. With that, I beg to move.
Immigration Skills Charge (Amendment) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Immigration Skills Charge (Amendment) Regulations 2022.
My Lords, these regulations make some simple but important amendments to the Immigration Skills Charge Regulations 2017.
The immigration skills charge incentivises UK businesses to take a long-term view of investment and training in the domestic workforce. It serves to address historic under-investment in training and over-reliance on cheap migrant labour by UK employers. The charge is paid by employers who sponsor migrants on skilled worker visas or global business mobility visas as senior or specialist workers. The charge is paid when the employer issues a certificate of sponsorship. They pay £1,000 per migrant per year for large businesses, or a reduced fee of £364 for small businesses and charities. In the last fiscal year, the charge raised £349 million. This funding helps to maintain the UK’s skills budgets. As education and skills are devolved matters, a portion of the income is shared with each of the devolved nations. It is distributed using the formula devised by Lord Barnett.
While it remains important that the charge is applied to most employers utilising migrant labour, there are good reasons to make exceptions in specific circumstances. For example, workers are currently exempt if they enter the UK for under six months, because they are unlikely to be filling a skills shortage. These regulations will exempt two new cohorts from the charge.
The first is scale-up workers. The new scale-up visa was launched this August. It enables UK businesses experiencing sustained high growth to attract top international talent and enhance the wider skills ecosystem. The visa was never intended to be subject to the charge. It aims to facilitate rapid recruitment and reduce burdens for UK businesses undergoing sustained high growth. It is designed to be attractive to both businesses and workers and offers migrants highly flexible conditions, including access to the wider labour market, without sponsorship, after six months. Applying the charge would reduce the appeal of this route and would be counterproductive to the policy. As it stands, however, the route falls within scope of the charge due to the wording of the current legislation. A waiver of the charge is in place at present, and these regulations will codify the position by formalising the exemption.
The second cohort to be exempt from the charge is EU workers undertaking intra-company assignments under the EU-UK Trade and Cooperation Agreement, which was ratified by Parliament on 30 December 2020 and secured preferential trading arrangements between the UK and the EU. One such accord was that neither party would apply taxes or charges—of a type such as the immigration skills charge—to workers undertaking intra-company assignments within the terms of the agreement. Both parties committed to drop such taxes and charges no later than 1 January 2023. This is a legal requirement enforceable under international law. The EU Commission has informed us that it is making changes to uphold its commitments in this regard. These regulations will enable the Government to uphold ours.
As set out in the accompanying Explanatory Memorandum, there has been no formal impact assessment for these regulations. This is because the immigration skills charge is considered a tax and is not within scope of the better regulation framework. Nevertheless, we have given this matter due consideration and can assure your Lordships that any loss of revenue will be minimal. This is because scale-up visas are new, and intra-company transfers from the EU account for less than 1% of the annual income from the charge.
The immigration skills charge plays a valuable role in our immigration system. It encourages UK businesses to utilise domestic labour where they can and to invest in skills when they are in short supply. However, it is important that we make exemptions to the charge when there are sufficiently good reasons to do so. These regulations will support UK scale-up businesses to compete in the global market for the skills needed to continue their growth. They will ensure that we deliver on an important trade commitment to our partners in the European Union and thereby secure reciprocal treatment for British workers undertaking business assignments throughout Europe. I commend the regulations to the Grand Committee.
I thank the Minister for that introduction. I will deal with the first item, on the immigration skills charge, and my noble friend Lady Northover will deal with anything I have left out and the second one.
First, this SI is important for what it does not say as well as for what it does. Can the Minister tell me how these proposals link with the research and development tax relief and tax credits, which will come in through the Finance Act? They seem very relevant to what we are talking about. In particular, will the tax credits relating to research and development for work carried out outside the UK impact on this statutory instrument?
Further to that, according to the Explanatory Memorandum, the Minister for Innovation says that these regulations
“are compatible with the Convention rights.”
Is the Minister for Innovation the correct person to make such a ruling? It seems rather like putting the gamekeeper in charge of the poacher.
Paragraph 7.5 of the Explanatory Notes says that
“This amendment to the regulations will codify the exemption.”
It would be useful to have, even in the notes, some empirical examples to show that this is the case.
In his introduction, the Minister talked about the effect in the EU, as distinct from in the UK. I would like him to confirm that the Government see this as reciprocal relief for workers from the UK working in the EU.
Lastly, the Minister said that there was no loss of revenue. However, the notes say very clearly that there is no impact assessment. How can he be so sure and blithely say that there will be no loss of revenue when there is no impact assessment? He may be quite right, but this is really asking us to believe something without empirical examples.
My Lords, I thank the Minister for his introduction to the regulations. I agree very much with the noble Lord, Lord Palmer, about the SI being interesting for what it does not say as much as for what it does say. I have a couple of brief questions for the Minister; I will make some longer remarks on the next SI.
The SI has been through the other place, so we accept it, but we have certain questions about it. Why have the Government come to the conclusion that these exemptions are needed? In line with the point from the noble Lord, Lord Palmer, about what the SI does not say, what are the Government’s plans, at the same time as bringing forward exemptions such as these, to ensure that there are excellent training and opportunities for our resident workforce? How does this SI fit with the stated, explicit intention of the Home Secretary and the Government to reduce levels of migration, something which we have contested?
As the noble Lord, Lord Palmer, mentioned, an impact assessment for the SI has not been published. The Minister gave some limited explanation, but I would like to know why not, and how will the impacts of the changes in this SI be monitored if an impact assessment is regarded as unnecessary or indeed if one appears in future? We have no idea where we are without impact assessments.
For example, these changes are designed to increase the number of skilled migrants in this area. How many skilled migrants have there been under the scheme so far? With no impact assessment, how can we know how successful this charging scheme has been since it was introduced in 2017? It is supposed to incentivise employers to invest in training and upskilling the resident workforce and reduce reliance on migrant workers. As the noble Lord, Lord Palmer, says, without the impact assessment, how do we know that the Government have achieved their own policy objective? The charge was introduced to discourage employers from seeking the skills they needed abroad. Whatever the rights and wrongs of that, that was the whole purpose. How do we know it has been successful?
What the Government have done is say that they need a couple of further exemptions to plug a skills gap that they have identified. The charge rate is £349 million a year. How is that money spent? From my reading, it appears that it just goes into an amorphous pot of money. How is that used to address the skills gap in the UK? There are skills shortages which we are seeking to plug through this skills exemption scheme, among other measures. Alongside that, there is the paradox that there are huge numbers of unskilled jobs which are unfilled. How will the Government deal with the apparent paradox of a skills shortage and yet millions of unfilled, unskilled jobs? Whatever the SI says, that is surely the policy gap and issue that the Government need to address.
My Lords, I am grateful for the contributions from the noble Lords, Lord Palmer and Lord Coaker, and for the opportunity to address some of the questions I have been asked.
I start with the point from the noble Lord, Lord Coaker, on the effect of relaxing immigration controls—if I have paraphrased that part of his question correctly. I acknowledge his concerns that creating new exemptions to the immigration skills charge appears contrary to the objectives of reducing net migration and ensuring that employers prioritise investment in resident workers. These are targeted exemptions, however. The Prime Minister recently spoke of the need to promote innovation in the economy and we think it sensible to ensure that sustained-growth businesses benefit from some easement of the usual requirements of the immigration system. That is why we have introduced the scale-up visa and why a disapplication of this charge is part of that package.
Similarly, we wish to promote cross-border trade and inward investment from overseas, and the rules that apply to movements of intra-company transferees fall within the scope of trade negotiations. In the case of the EU, we reached a reciprocal agreement that such charges should not apply to intra-company movements, and UK businesses with a presence in the EU will benefit from the certainty that that agreement provides.
I will address the point raised by both the noble Lords, Lord Palmer and Lord Coaker, on the impact assessment. Clearly, the immigration skills charge is a tax and it is therefore not subject to a formal impact assessment process. The Government have considered this matter carefully and any impacts will be minor. The scale-up visa route is new and was never planned to be subject to the charge; as such, a waiver is in place and so its exemption will not contribute to any reduction in revenue.
The number of EU intra-company workers who will be exempted from the charge is expected to be about 2,000 annually. This will account for a reduction of income in the region of £3.3 million per year—less than 1% of the total annual income from the charge.
I turn to the question posed by the noble Lord, Lord Palmer, on the Explanatory Memorandum and its attestation on the European convention. Paragraph 5.1 reads,
“The Minister for Immigration, Tom Pursglove, has made the following statement regarding Human Rights: ‘In my view the provisions of the Immigration Skills Charge (Amendment) Regulations 2022 are compatible with the Convention rights.’”
I submit that he was the correct person to make the declaration at the time that it was made.
I turn to the question of reciprocal benefit with the European Union. It is understood that arrangements are being made in various parts of the EU, including France, where a €200 charge for British intra-company workers is being removed to comply with obligations under the agreement.
A general question asked by the noble Lord, Lord Coaker, was on how the money is spent on skills. The money is paid into the Consolidated Fund and then allocated to the devolved nations in accordance with the Barnett formula, as I said. The skills budget is well known to the noble Lord and is used, in that way, to alleviate any skills deficit.
The costs of collection was one issue touched on by the noble Lord, Lord Palmer. The Home Office publishes annual accounts setting out financial details, including the total costs for collection of the immigration skills charge and immigration civil penalties. For the financial year 2021-22, the cost associated with collection was £7.7 million. Details relating to what is included within the cost of collection are also contained in the annual accounts report. The costs include payment of handling charges associated with collecting the immigration skills charge, as well as the cost of staff involved in administering the charge and preparing the trust statement.
In conclusion, it is right that the needs of employers are reflected in our immigration system. At the same time, it is important that the Government ensure that overseas recruitment is considered alongside investment in the development of skills in the domestic labour market, not as an alternative to it.
The immigration skills charge incentivises employers to recruit and train domestically and provides funding to enable the Government to support them to do so. The regulations we have considered today will not fundamentally change the operation of the charge. They simply create additional limited exemptions for highly skilled international workers recruited by UK scale-ups, as well as for EU intra-company workers undertaking assignments within the terms of our trade commitments.
At a time when there is, quite understandably, an intense focus on our economy and its prospects for recovery, these exemptions are designed to support high-growth businesses in the UK and to strengthen trade and investment both to and from Europe. I commend the regulations to the Grand Committee.
Just to take up the points that the Minister kindly referred to, he said that this would not involve additional costs. Surely an impact assessment would have talked about how much take-up there would be. If the take-up is different, the costs will be different, because more people will seek the relief. Without empirical examples, we do not know.
The Minister said that the relevant Minister was correct when he said that this was compatible with the European convention. I would have thought this was a legal matter and should have had a report from the Attorney-General, rather than a Minister who was implicitly involved in it.
I will deal first with the point about the impact assessment. As I say, as a matter of practice on taxes, the requirement to hold an impact assessment in the sense described by the noble Lord is not normally followed. However, as I say, the department closely scrutinised this question and came to the conclusions I already outlined.
On the obligation to the European Convention on Human Rights at paragraph 5 of the Explanatory Memorandum, Section 19 of the Human Rights Act requires a Minister presenting a piece of legislation to certify whether it is compatible. It is not normal practice that that attestation is signed by the Attorney-General. Plainly, all these matters are subject to legal advice, as the noble Lord would expect.
Immigration (Persons Designated under Sanctions Regulations) (EU Exit) (Amendment) Regulations 2022
Considered in Grand Committee
That the Grand Committee do consider the Immigration (Persons Designated under Sanctions Regulations) (EU Exit) (Amendment) Regulations 2022.
My Lords, I am pleased to present these draft regulations to the Committee. This instrument amends existing regulations that relate to the immigration consequences for someone who is designated or sanctioned under the Sanctions and Anti-Money Laundering Act 2018, which I shall call the sanctions Act. If noble Lords will indulge me, I will first set out some background to sanctions, in particular the immigration sanctions, also known as travel bans, with which these regulations are concerned.
The UK is bound by travel bans imposed by a resolution of the United Nations Security Council and can impose its own travel bans under the sanctions Act. In the vast majority of cases, travel bans are imposed on individuals who are outside the UK and have no connection with it. A travel ban has an effect on a person’s immigration status; subject to the UK’s obligations under the European Convention on Human Rights and the refugee convention of 1951, they cannot enter or remain here.
The 2020 regulations provide a mechanism for a person who is lawfully in the UK to make a human rights or protection claim before a travel ban made under the sanctions Act impacts their immigration status. They are then exempt from the effect of the travel ban while the claim is considered and refusal of such a claim gives rise to an in-country right of appeal before the immigration and asylum chamber of the First-tier Tribunal.
Where a person is not subject to a travel ban but is making a human rights or protection claim under the Immigration Rules, they benefit from a similar protection. However, in contrast to the exemption provided to sanctioned persons, they cannot leave the UK or the common travel area and return simply on the basis of a claim lodged before their departure. We are therefore now in the perverse situation where someone subject to a travel ban benefits from more generous protections than someone who is not.
I turn to the purpose of these regulations, which is to align the approach and correct this anomaly. The Government have considered how to address this and concluded that it is right that, when a travel ban is imposed under the sanctions Act, people lawfully in the UK are exempt from its effect while their human rights or protection claim is considered.
However, when a sanctioned person leaves the UK, that exemption should end. Any action taken in respect of the person’s immigration status will be in accordance with our international obligations. These regulations therefore ensure consistency across the immigration system and that the effectiveness of our domestic sanctions regime is not compromised. I commend this instrument to the Committee. I beg to move.
My Lords, I thank the Minister for that explanation and for the Explanatory Memorandum. It is clearly important that the two processes—whether or not someone is eligible to have their immigration status accepted and whether or not they are subject to a sanction—should be kept separate. Can the Minister tell us whether there have already been any cases where these have become entangled? Why was this not picked up when the sanctions legislation went through the House? I recall our debates on that and do not remember this being flagged, although I remember that we had to sort out quite a number of inadvertent challenges in that legislation.
The Home Office states that this draft SI would “address a discrepancy” whereby provisions designed to ensure compliance with the UK’s international obligations, which the noble Lord has laid out, put people subject to an immigration sanction “in a better position” than people making human rights or protection claims under existing immigration rules. Once more, as with the other SIs this afternoon, that is a very interesting use of language: a discrepancy being in effect a mistake.
Again, I express my sympathy with officials, because of course these things happen. When departments have to shift away from their main aims at the same time as unscrambling legislation from our EU membership over 40 years, it is not surprising that this happens. I express sympathy with the officials who have had to deal with it, as I and the noble Lord, Lord Benyon, did in debates on the previous SIs.
I note that we have four officials here, who otherwise could be working on more substantial matters. I ask again, as I did in the previous debate: if we need such an SI to be processed with the manpower that we have here, how many more would we have to deal with if we removed the amount of secondary legislation that the Government propose and then had to sort out all the discrepancies that might creep in as a result? Given that 40 years would have to be unscrambled in the space of about a year, does he not think that that is rather unwise? There is nothing about leaving the EU which necessitates that, regardless of what his colleague implied. The Minister may have in his notes that same line as the rebuttal.
Leaving the EU is one thing but chucking out babies with bathwater when you do not intend to is clearly another. It happens so easily, as we can see from all these SIs this afternoon—all these discrepancies. I hope the Minister will reflect on that. This particular SI seems straightforward and we support it, but I look forward to his wider response.
Again, I thank the noble Lord, Lord Murray, for introducing the SI, and I thank the noble Baroness, Lady Northover, for her remarks and comments. I will spend a couple of minutes setting out some background, because this is an important SI that puts right a discrepancy. Some background and some reflection on this order will be important for those who read our proceedings.
The Sanctions and Anti-Money Laundering Act 2018 provided for an autonomous UK sanctions regime following our departure from the EU. Part of that sanctions regime included travel bans, which exclude a person from entering or remaining in the UK. The vast majority of travel bans are imposed on individuals who are outside the UK and who have no connection with the UK.
In a small number of cases where a travel ban is served on a person already in the UK, it impacts their immigration status; it cancels their permission to be in the UK and makes them liable for removal. A person can appeal that decision by submitting a human rights or protection claim, in line with our obligations under the ECHR and the refugee convention—again, the Minister pointed that out.
The original SI, which this one amends, made it clear how those appeal procedures would work by clarifying which court or tribunal would hear them. We supported that original SI; the use of sanctions against people who have committed some truly appalling crimes is absolutely vital but must rightly be reflected in line with our obligations under the ECHR and our commitment to the refugee convention. The previous SI provided clarity on how those cases—which were likely to be very rare—would be heard, and the SI was welcomed across the parties.
As the Minister pointed out, the Government have now noticed a discrepancy, which this amending SI addresses. If a person is subject to an immigration sanction—a travel ban—the effects of the sanction do not kick in until any human rights or protection claim has been concluded. This means that a person under the sanction keeps their immigration status and can travel in and out of the UK during that time.
Conversely, if a person who is not subject to an immigration sanction—a travel ban—is appealing an immigration decision on human rights or protection grounds, that appeal can be treated as withdrawn if that person leaves the UK. The Explanatory Memorandum explains that this means that a person subject to an immigration sanction is therefore in a better position than those who are not subject to a sanction and are appealing a decision under the Immigration Rules. The order would provide that the effects of an immigration sanction come into effect if a sanctioned person leaves the UK to bring them into line with existing provisions for those not subject to a sanction.
Whenever we have discussed this set of circumstances where a person who is already in the UK is made subject to a travel ban, we have noted that these cases are likely to be very low in number, as most immigration sanctions are imposed on individuals who are outside of the UK and do not have UK connections. Is the Minister able to give an indication of how often a travel ban has been made against a person who is already in the UK since the introduction of our own UK sanctions regime following the passage of the Bill in 2018?
Today’s SI seeks to amend a discrepancy, where someone subject to a sanction may be in a more advantageous position than someone who is not subject to a sanction but is appealing an immigration decision on human rights grounds under the Immigration Rules. The noble Baroness, Lady Northover, alluded to this and asked various questions. I would like to ask when this discrepancy was first noticed and how it came to light. Is it currently—I assume the answer is yes—made clear to a person appealing a decision on human rights or protection grounds that their appeal may be withdrawn if they leave the UK?
More generally, it is absolutely vital that we have a dynamic, robust sanctions regime. We cannot overstate the seriousness and appalling nature of the crimes committed by some of those who come under our sanctions regime.
When I looked at the last SI debate, in 2020, the examples given by the then Minister included: 25 Russian nationals involved in the mistreatment and subsequent death of Sergei Magnitsky; 20 Saudi nationals involved in the murder of Jamal Khashoggi; two high-ranking Myanmar military generals involved in the systematic and brutal violence against the Rohingya population and other minorities by the Myanmar armed forces; and two organisations involved in forced labour, torture and murder in North Korea’s gulags. Sanctions are an important tool at our disposal to promote our values on the world stage. Their importance could not be clearer as we respond to Russia’s illegal invasion of Ukraine. As well as this SI, what are we doing to ensure that our own domestic sanctions reflect the strength of sanctions sought by our international allies?
Many of these SIs pass with limited involvement from noble Lords, but this small SI deals with a very important part of our Immigration Rules and laws and deserves a little reflection by us all. I will appreciate the Minister’s answers to my questions, and no doubt he will also respond to those of the noble Baroness, Lady Northover, in due course.
My Lords, I am grateful for the considered debate and the contributions from the noble Baroness, Lady Northover, and the noble Lord, Lord Coaker.
I entirely agree that this is an important SI and am grateful for the support shown for it. It clearly closes an unfortunate lacuna that had been revealed. In answer to the question asked by the noble Baroness and the noble Lord, the discrepancy came to light as a consequence of a decision to impose designations in March. Clearly, the Committee will not expect me to go into the facts of individual cases, but that was the genesis of the regulation. Unfortunately, when sanctions are brought in at pace to achieve the vital objectives outlined by the noble Lord, Lord Coaker, mistakes can occur in drafting. This was such an instance. It cannot be right that we let these people have a better position than those who would ordinarily make use of the asylum and humanitarian protection schemes. The cases are necessarily quite entangled, and obviously, as I have already said, I will not go into the facts surrounding them.
Travel bans are used to restrict the movements of those whose behaviour is considered unacceptable by the international community, those who are associated with regimes that threaten the sovereignty or independence of neighbouring countries, those who would seek to do harm, those who would seek to shelter themselves or their ill-gotten gains in other countries, and those whose aim is to profit from human suffering. The UK does not ignore its other international obligations. Those subject to a travel ban who claim fear of persecution or breach of their fundamental rights have the opportunity to make a claim before we take action to remove them from the UK. They have their statutory right of appeal against a decision to refuse their claim. If the appeal succeeds, the travel ban does not apply, meaning that they will not be removed or required to leave. It cannot be right that when sanctions can be imposed on someone, they can then come and go as they please, abusing our hospitality. Should they choose to leave the UK without a resolution on their claim, they should not find themselves in a more generous position than others.
In answer to the point raised by the noble Lord, Lord Coaker, on the overall spread of Russian sanctions, I can confirm that, together with our international partners, we have imposed the largest and most severe package of sanctions ever imposed on a major economy. The UK alone has sanctioned 1,200 individuals and over 120 entities since the start of the invasion, including 20 banks with global assets worth £940 billion and over 130 oligarchs with a combined net worth of over £140 billion, as well as introducing unprecedented trade measures.
Will the Minister repeat the sentence about oligarchs? Did he say million or billion?
I said billion. It is 130 oligarchs, with a net worth of over £140 billion. I share the noble Lord’s astonishment at that figure. We have frozen over £18 billion-worth of Russian assets under the Russia sanctions regime. This represents a vast increase of almost 4,000% from September 2021—a total of £44.5 million—underlining the scale and impact of our response in targeting Putin and his regime.
I think I speak for everyone when I say that we will of course continue to stand with Ukraine in support of its right to be a sovereign, independent, democratic nation. Russian aggression cannot be appeased.
To draw matters to a conclusion, as I explained earlier, these regulations simply seek to provide consistency while maintaining the effectiveness of our sanctions regimes and complying with our international obligations. I reassure noble Lords that these regulations protect our sanctions regimes from abuse and provide consistency with the wider immigration system. I commend the regulations to the Committee.
Committee adjourned at 5.52 pm.