To ask His Majesty’s Government what plans they have, if any, to address the number of fires caused by lithium-ion batteries in e-scooters and e-bikes.

My Lords, the Government are committed to ensuring that consumers are protected from unsafe goods through our product safety framework. We are undertaking a programme of activities on the fire risks associated with lithium-ion batteries for e-scooters and e-bikes. These include establishing a safety study to understand evidence for enforcement and public safety information; carrying out research to inform future regulatory activity and guidance on safety and standards; and working with fire and rescue services, among others, on safety messaging.

I thank the Minister for his reply, but I believe more urgent action is needed. After all, fires caused by lithium-ion batteries in e-scooters and e-bikes have quadrupled in number since 2020, costing millions of pounds and resulting in eight deaths and 190 injuries. Landfill sites are also experiencing a huge surge in lithium-ion battery fires, yet unsafe batteries and chargers are still being sold and there is no effective campaign to ensure safe recharging or disposal. So, with headlines such as, “Why do e-scooters and e-bikes keep exploding?”, fire services, councils, insurance companies and safety campaigners, including Electrical Safety First, are calling for more urgent action. Will the Minister agree to a meeting to discuss industry-developed solutions so that action can now be taken quickly?

I thank the noble Lord for that follow-up question. I assure all noble Lords that officials in three government departments are collaborating to address the issue of fires associated with e-scooters and e-bikes—specifically, the Office for Product Safety and Standards inside my own department, the Department for Business and Trade; the Home Office, which is interacting with fire services; and the Department for Transport, through the Office for Zero Emission Vehicles. Officials are proactively seeking the input and expertise of stakeholders from fire and rescue services, the National Fire Chiefs Council and London Fire Brigade, including their scientific advisers. Indeed, on 13 June, the Home Office hosted a meeting of senior officials from the relevant departments, London Fire Brigade and the National Fire Chiefs Council to further discuss the issues and the work which is under way.

My Lords, is there not a very simple answer to these wretched e-bikes and e-scooters: to ban them? That would solve at least part of my noble friend’s problem.

I thank my noble friend for that welcome intervention. You might argue that this is the response of the consumer to messages about climate change—that the consumer is embracing the concept. Not only are they a cheaper mode of transport but they are much better for the planet. It is actually illegal to use an e-scooter on a public road and in spaces set aside for pedestrians, cyclists and horse riders—including pavements and cycle lanes—unless it is under licence. There are licences at the moment to allow trials to take place in 32 local authorities, in order to collect information to allow the DfT to work out how to proceed with this mode of transport.

My Lords, unlike in England and Wales, e-scooters are illegal on the roads in Northern Ireland, but that has not stopped their use, with an e-scooter rider left in a critical condition last month after colliding with a car in east Belfast. Furthermore, just last weekend, the Northern Ireland Fire and Rescue Service issued a warning after attending a spate of e-scooter fires caused by lithium-ion batteries. In the continuing absence of an Executive at Stormont, can I ask the Minister for an assurance that any future legislation brought forward by His Majesty’s Government relating to Northern Ireland does not include the legalisation of e-scooters?

I thank the noble Lord for his question on that specific matter in relation to one part of the United Kingdom, but this is not a UK-central issue: it is an international issue. New York is considering the whole gamut of proposals; its fire department has implemented a range of activities, which our Office for Product Safety is looking at. The U.S. Consumer Product Safety Commission has announced that it will hold a forum on 27 July to look at lithium-ion batteries and e-bikes after an increasing number of fires and fatalities. The Australian Competition and Consumer Commission has outlined lithium-ion batteries as one of its product safety priorities, while Barcelona has imposed a six-month ban on e-scooters on public transport and Paris has banned rental e-scooters. We are not alone in considering how to deal with this modern technology.

My Lords, can my noble friend the Minister tell us how many e-scooters are in legal circulation? Private e-scooters are to be driven only on private land, including car parks and private property; rented scooters are the ones that he referred to under pilot schemes. How many will go on to become permanently rented, lawfully and with a licence? Will licences soon be issued for privately owned e-scooters as well?

I thank my noble friend. I do not have the precise number so I will write to her. She is absolutely right: it is currently illegal to use an e-scooter on a public road. It is legal to use an e-scooter on private land with the permission of the landowner. Any person using an e-scooter on a public road is breaching the law and committing a criminal offence so can be prosecuted. The Government are providing e-scooter trials in 32 local authorities, as I said. These trials are taking place and will continue until the end of May 2024. Transport for London has banned the carriage of e-scooters and e-unicycles on its premises and services, so this is being regulated heavily. In the meantime, the trials continue.

My Lords, can the Minister kindly tell the House what methods other than lithium are being researched and how much the Government are spending on researching alternatives to lithium in batteries?

That goes back to my department, the Department for Business and Trade, where the Office for Product Safety and Standards has established a safety study precisely to understand the data on and evidence of risks in the sector, as well as the alternatives; this will inform enforcement action. Specifically, the noble Lord will be pleased to know that a project is going on at the Warwick Manufacturing Group, which is part of the University of Warwick, in which intense conditions are being created to examine further the science and technology around this issue and the safety of lithium-ion batteries in personal light electric vehicles. Where the Office for Product Safety and Standards receives a notification that these products present a serious risk or need to be recalled, such notifications will be promoted on the product recalls and alerts websites, on social media and via stakeholders. I do not have a precise number on the amount for research, but I will write to the noble Lord with that figure.

My Lords, in reviewing the success of the trial periods, will the Government consider parking, particularly of these dockless vehicles, and the impact on people with impaired vision and disabilities when such vehicles are left on pavements?

Yes. I am sure that that will be included in the review.

My Lords, the fire risks associated with lithium-ion batteries go beyond their use in e-bikes and e-scooters, adding to their wide-ranging risk in residential environments. Fire incidents caused by such batteries can also have severe environmental consequences due to the hazardous materials involved. Do the Government have any plans to work with manufacturers and recycling organisations to develop effective recycling and disposal methods for these batteries, ensuring that they are handled responsibly and minimising their impact on the environment?

I thank the noble Baroness and say absolutely yes on all counts. This is all part of the ongoing review. The work being done with the fire service is collecting information to find out how much of the risk is caused by the batteries versus the way they are used by the consumer in the household and whether they are being charged in the right way and in the right place. The consultation is ongoing and the results are imminent. We are fully cognisant of those risks.

My Lords, fires are one problem, but poor design of e-scooters means a low centre of gravity, ensuring that a lot of people who have accidents have head injuries. The Minister talks about studies and plans. The trials have been going on for years. Can he give us a date when the Government will actually do something about this problem?

The consultation has started and will be published imminently. The findings will be made available. Generally, it is not the Government’s position to ban all dangerous items. Some modes of transport are more dangerous than others, but you choose your own mode of transport. Certainly, when it comes to affecting the public and increasing danger, that is exactly why the law prohibits these vehicles other than in a legal trial. With three departments working on this, I can safely say that the Government are alive to these issues.

My Lords, the Minister will recognise that lithium-ion batteries are used in a variety of products and not just e-scooters. What steps are the UK Government taking to ensure that we have sufficient supplies of lithium-ion, and are those supply chains from sources that do not involve modern slavery?

That is a very far-reaching question. I will be delighted to write to the noble Lord on it.

To ask His Majesty’s Government how many people since January have (1) crossed the Channel irregularly by boat, and (2) claimed asylum having done so; and how many of these asylum claims are awaiting a decision.

An overall total of 11,279 people have arrived in the United Kingdom by small boat since January of this year to today’s date. From 1 March to 31 March, 3,362 asylum claims were raised from small boat arrivals, of which 3,306 are awaiting initial decision. The number of asylum claims made from arrivals from 1 April 2023 will be detailed in the next quarterly publication of statistics.

Can the Minister tell us how many of these people in the various categories were unaccompanied children? Is there any reason why unaccompanied children are barely mentioned in the impact assessment?

I will need to write to the noble Lord regarding the precise number of unaccompanied children in those statistics. We will be discussing the impact assessment in due course—to coin a phrase.

My Lords, some time ago, the Government pledged to eliminate the backlog of asylum claims by the end of this year. How is that going, and how confident is the Minister of that target being met?

On 31 December, the Prime Minister pledged to clear the backlog of 92,601 initial asylum claims; that relates to asylum claims made before 28 June 2022. One way this will be achieved is via the streamlined asylum process, which is centred around accelerating the processing of manifestly well-founded asylum claims. From 23 February, legacy claims from nationals of Afghanistan, Eritrea, Libya, Syria and Yemen will normally be considered through the streamlined asylum process. That means that a positive decision can be taken on the information available, and the claimant will not be substantively interviewed. I reassure the noble Lord that this work has progressed in terms of the recruitment of further caseworkers, and we hope to have 2,500 further case- workers in place by September.

My Lords, of the numbers crossing the channel, how many are women and how many are pregnant women? I asked this question in writing during the debates on the Illegal Migration Bill; I got a response, but no clarity on numbers. Could they be shared today?

Clearly, I can provide a breakdown of those numbers, probably during tomorrow’s debate. As far as I am aware, there were no pregnant women.

My Lords, further to the question about children from the noble Lord, Lord Dubs, does my noble friend have any evidence that human rights lawyers are telling people who come here illegally on boats across the channel to say that they are children, when they are clearly not?

My noble friend is right that intelligence exists suggesting that people smugglers give information to those they smuggle. I am aware that allegations have been made against lawyers, but I would not like to say any more at this stage.

My Lords, I first thank the noble Lord for facilitating my visit to RAF Manston and to Western Jet Foil a few weeks ago. During that trip, I was made aware of a cohort of youths who initially identify as adults because they want to work. Indeed, they may have been working in their home country since they were 13 or 14. Does the Home Office keep any record of whether this group is more likely to go missing or abscond, so that they can perhaps be identified earlier in the process, before they go missing?

I thank the noble Lord for that question, which is clearly important and I will find out the answer. I know that the noble Baroness, Lady Chakrabarti, has a Question about missing asylum-seeking children in the next fortnight, so I will report back to the House then and will of course write to the noble Lord.

My Lords, refugees escaping the horrors of war and arriving in the UK in small boats last year constituted less than 5% of the annual number of immigrants. Can the Minister explain why, despite Christian teachings—with which we begin proceedings in this House—requiring that they be treated with care and compassion, the Government are making their harassment and deportation, at £170,000 a head, a national priority?

The noble Lord will not be surprised to learn that I disagree with him. The purpose of the Illegal Migration Bill is to deter dangerous crossings of the channel and other methods of illegal entry. This is an entirely responsible and appropriate policy step.

My Lords, following the question from my noble friend Lord Dubs, can the Minister explain why we still do not have a child rights impact assessment, so that we can assess the Government’s argument that the Bill is in the best interests of children? All organisations, including children’s commissioner, believe that it is not.

I am afraid that I cannot provide the noble Baroness with an update on the child rights impact assessment, but I am sure that it will be provided.

My Lords, I cannot understand why the Government are dead set on spending huge amounts of money on sending asylum seekers to Rwanda. In fact, we would be much better off if we let them work here, as most of them want to do. Have the Government thought about that at all—about making them taxpayers?

As I have said many times in this House while the noble Baroness has been present, the reason why asylum seekers are not initially allowed to work is in order to prevent a very large pull factor encouraging illegal migration.

Can the Minister please give us the total figure of the number of asylum claims that have not been concluded? He gave a figure of 92,500, which, presumably, is the number of cases that have not been started. However, there may be many that have been started—a file has been opened—and which are excluded from that 92,500. Can the Minister give us the total number of asylum claims that have not been finished or started?

Of course, I do not have those statistics to hand but they are available on the GOV.UK website. The latest statistics release, covering 1 January 2023 to 31 March 2023, shows that during that period 3,793 people arrived in the UK having crossed the channel by small boat. The next quarter of statistics is due to be published on 24 August 2023. As the noble Lord is aware, the Home Office needs to ensure that information intended for publication meets the standards and requirements set for departmental publications.

Can the Minister explain how this wretched illegal trade is allowed to be conducted in broad daylight from the shores of northern France? What would the situation be if the boats were going in the opposite direction? Would we allow the south coast to be used as a trading post for this illegal trade?

I thank the noble Lord. The answer is clearly that we would not, and I agree with the sentiment of his question.

I thank the Minister for the letter he has put in the Library of the House recording that the UN Committee on the Rights of the Child has adopted a formal report saying that the Bill before the House, which we will discuss tomorrow, requires amendment if we are not to breach our international obligations. Will he bring us the good tidings that we are going to do something about that?

Tempting though it is to take up the noble Lord’s invitation to predict what might happen tomorrow, I will not go down that avenue. If I may, I will answer the earlier question of the noble Lord, Lord Dubs. Some 12% of arrivals claim to be unaccompanied asylum-seeking children—of course, those are claims and are not confirmed—and 13% of arrivals are female, whereas 87% are male.

My Lords, the Minister has been unable to answer several questions raised today in this exchange. We have a debate tomorrow. Can he guarantee that he will look this evening at the questions he has been unable to answer and give perhaps a better account of what is going on? He has his officials in the box—many of us have been in that box before—and I hope he will look at what he has been unable to answer and be able to give a full account in the debate tomorrow.

The noble Baroness will have noticed that I actually provided answers in response to those questions a moment ago. I am afraid I resent the tone of her question. I will of course have at my fingertips relevant information for tomorrow’s debate.

To ask His Majesty’s Government what assessment they have made of the possibilities of emerging technologies to create new opportunities for people who are deafblind.

The Government are continually reviewing and assessing the possibilities afforded by new and emerging technologies, particularly to support disabled people or anyone with specific access requirements. We believe we can achieve this by promoting bold discoveries, growing the economy, and being at the cutting edge of assistive and accessible technology—ATech. Our ambition is to make the UK the most accessible place in the world to live and work with technology.

My Lords, today is Helen Keller’s birthday. Born in 1880, she was both deaf and blind, and was one of the most well-known deafblind people in history, as she campaigned tirelessly. That is why this week, the week of her birthday, is when Deafblind Awareness Week takes place.

I thank the Minister for his reply. There are more than 450,000 deafblind people in the UK, and Sense predicts that, by 2030, that number will increase to more than 600,000. Will the Government commit to increasing their work with major technology companies such as Google, which is actively co-creating assistive technology with and for people with complex disabilities? In particular, will the Government support those people with complex disabilities who are looking for work with the equipment that they need by the introduction of a fund to ensure that adequate assistive technology is available in all jobcentres?

I thank the noble Baroness for raising her Question this week, which is, of course, Deafblind Awareness Week. I take this opportunity to pass my very best wishes to those who suffer from the affliction and those who work with them.

The Government are working with providers of technology of all different sizes in this space. The noble Baroness referred to Google’s new centre for technology for disabled people, which highlights its recognition that the UK is the right place for it to operate in this market. I could point to a number of fascinating new innovations by smaller organisations, but I will restrict myself to just one: BrightSign has created a life-changing AI-based smart glove, giving voice to the voiceless by enabling sign language users to communicate without an interpreter.

My Lords, the Minister rightly identified that there are many excellent technologies using smartphones and tablets that are designed to help those who are deafblind achieve greater independence. I too congratulate the noble Baroness, Lady Kennedy, on raising this Question during Deafblind Awareness Week. What co-ordination role does the new department, DSIT, have in this respect—there are many departments, and a couple have been mentioned already—and what resources does it have to help with training and information on these vital technologies?

As the noble Lord rightly points out, identifying the appropriate technologies by scanning the horizon for those that will be of most impact and use is, and must be, a cross-governmental matter. I take every opportunity to urge my fellow Ministers to fight the good fight in this respect. DSIT’s role is as the provider and exemplar of technology use to all of government and the public sector, and indeed all of the UK, but all government departments recognise their responsibility to continuously identify ways to use technology and to make technology in the United Kingdom as accessible as it can possibly be.

My Lords, I support the points that the noble Baroness made and note the staggering figure of 450,000. Would it be possible for the Minister to extend the review to include work undertaken at universities? There may well be scope for co-ordinating that work to help not only them and deafblind people but those in the commercial sector who are looking for new ideas.

DSIT works extensively across universities on this and other programmes. In addition, the Government commission a range of research, particularly in the area of deafblindness, not least, for instance, into the procurement of hearing aids by the NHS.

My Lords, we on our Benches very much welcome the research and development that is taking place, and the pretty unprecedented pace at which new technologies become available. However, this poses a challenge, not just for government departments, charities and individuals but for wider society. To pursue the points raised by the noble Lord, Lord Clement-Jones, I would like to pin the Minister down a bit more on what he sees as his department’s role, and that of the Department of Health and Social Care, in accrediting and procuring these emerging technologies. He seems to suggest that departments should just get on and do it themselves, without any plan or strategy. That cannot be right.

I thank the noble Lord for that question. I certainly hope my remarks did not come across as me asking other ministries to merely improvise in this space. DSIT can contribute in three very important ways under the structure of the science and technology framework, the ambition of which is to make us a science and tech superpower by 2030. We can make three distinction contributions: first, by growing the economy overall through the use of science and technology; secondly, by driving innovation in all areas; and, thirdly, and most pertinently to this Question, by ensuring that the technology developed in this space is always as inclusive and accessible as it can possibly be.

My Lords, I declare my interest as a trustee of the Ewing Foundation for deaf children. Does my noble friend the Minister agree that the progress of most children with sensory disabilities has been excellent, mainly due to dedicated teachers and modern electronics, such as cochlear implants, hearing aids and sound fields? However, these have to be maintained. Would it be a good idea for schools regularly to test their electronic equipment provided for the pupils to make sure it is working?

I thank my noble friend for the question and pay tribute to his ongoing work in this space. Supporting deaf children through the use of audiological equipment involves a range of government agencies, including the NHS, schools and local authorities’ social care teams. If a child is deaf, NHS audiology services work with multidisciplinary teams, which include teachers for the deaf, paediatricians, speech and language therapists, and cochlear implant teams, as well as the parents and guardians, and between them they agree individual management plans. Children who use audiological equipment based on this plan should of course be offered regular appointments with their audiology team to check their hearing and ears and to ensure that their audiological equipment is working and adjusted as necessary.

My Lords, the Minister is right in recognising that smaller companies are developing technologies for the deafblind, without using the internet, combining spectacles and hearing aids. The important point is that, when these technologies reach maturity, they are available to people who are deafblind. Digital technologies for the deaf, for instance, are currently not available on the NHS and are quite expensive on the private market. We must make sure they are available on the NHS when these technologies mature.

I suppose the structural problem overall is that those who find themselves disabled, with whatever disability, are in a very small group, and the smaller the group, the more difficult it is for manufacturers of equipment to provide for them in a commercially viable way. The Government have a number of levers they can pull in this space: first, by commissioning research directly; secondly, by the public sector procurement programme—we spend on average £1.5 billion every year on procuring ATech; and, finally, by working with partner organisations, such as UKRI and Innovate UK, to seed and fund emerging technology in the ATech space.

Is the Minister aware that the excellent “Strictly Come Dancing” winner, Rose Ayling-Ellis, who is herself deaf, has proposed that BSL lessons be given to everyone freely? What is the Government’s response?

I very much enjoyed the interview on the radio today to which the noble Lord refers. The British Sign Language Advisory Board has been established to help advise the Government on the implementation of the British Sign Language Act 2022, which legally recognises BSL as a language of England, Wales and Scotland. It is important to note here that the BSL board has a reserved place for a deafblind person, and an additional member of the board is deaf- blind. We look forward to receiving and acting on its advice in this space.

To ask His Majesty’s Government what assessment they have made of (1) the availability of animal torture videos on the internet, and (2) whether existing legislation is sufficient to punish people in the United Kingdom who are involved in the creation or promotion of such content.

We are aware of the prevalence of appalling animal cruelty videos online and take this issue very seriously. The Animal Welfare Act 2006 is commonly used to tackle domestic animal cruelty and it is an offence under the Communications Act 2003, which can be used to address offensive material being circulated online, be it from the UK or not.

My Lords, the recent reports about the global network to encourage and film the torture of baby monkeys for profit were harrowing. Internet users wanted to see animals hurt with pliers and hammers and set on fire, and then they were paying to watch the results. My noble friend Lord Stevenson’s amendment to the Online Safety Bill sought to add such severe animal cruelty to the list of priority offences, but it was rejected by the Government. I have read the Hansard, and it seems to me it was rejected because it was too difficult. Does the Minister agree that if an offence is illegal offline, it should be illegal online? If the Government are not prepared to include this in that Bill, will he commit to work with Defra to bring in the necessary animal welfare legislation?

The debate on this matter in Committee on the Online Safety Bill was well attended and certainly well received. The purpose of the Online Safety Bill is to intervene between the platforms on which the distressing images are published and the users who see those platforms. It is, first, for human beings and, secondly, for their experiences online. The appalling instances that the noble Baroness referenced, particularly in the BBC documentary, would themselves be covered by either the Animal Welfare Act or the Communications Act, both of which make those criminal offences without the need for recourse to the Online Safety Bill.

My Lords, these offences are bad enough by themselves, but does the Minister accept that there is a direct connection between animal cruelty and violence towards humans? If so, is this not yet another reason why the Government should use the Online Safety Bill to combat animal cruelty offences and make this a priority offence under the Bill?

I join the whole House in absolutely deploring these behaviours. The concern about adding animal cruelty offences to the Online Safety Bill is that it is a Bill built around the experiences online of human beings. To rearchitect the Bill around actions perpetrated or commissioned on animals runs the risk of diminishing the effectiveness of the Bill.

My Lords, needless to say, the behaviour referred to in this Question shows indescribable cruelty to animals. It is extremely concerning that anybody should do these things or, indeed, want to view them. It urgently emphasises the need for better regulation of the internet to reduce the danger of copying behaviour. Is the Minister aware—I fear that the noble Lord has just made him aware—of the increasing evidence that malicious cruelty to animals is a precursor, and can lead, to violent and abusive behaviour towards humans? Is this not another indication, were it needed, of why we need to better regulate the internet with regard to cruelty to animals?

I recognise the argument that increased cruelty to animals promotes further bad behaviour, including violence between humans, but I stress the point that the purpose of the Online Safety Bill is to bring into law a range of limitations on what can be published and what can be seen online by human beings. There are laws that effectively criminalise cruel behaviour to animals and the action of publishing evidence of cruelty to animals online; those laws just happen not to be the Online Safety Bill.

My Lords, the Minister says that the Government are against cruelty to animals, yet we have just heard that the present legislation does not stop it. Is it not the case that we need regulation that will prosecute and convict people involved in these practices? Can he tell us how many people have been prosecuted so far this year for animal cruelty?

I have the numbers prosecuted for animal cruelty in my notes somewhere; I will happily write to the noble Lord.

My Lords, at the moment the law we have been talking about has been preventing those who are perpetrating the harm and publishing it, but is there any merit in going after the people who are watching it and paying for it and have it on their computers—the consumers who ultimately are generating the harm at the end?

Indeed. I stress that laws preventing these behaviours are already in existence, and the Online Safety Bill supports those laws in some sense. If content is illegal, platforms are obliged to take it down. If content creates a risk of harm to children, again, platforms are obliged to take it down. In the case of the largest platforms, the so-called category 1 platforms, if content violates their terms of service, they are obliged to take it down.

My Lords, if the Minister’s central argument is that we do not need any amendments to the current Bill because these offences already exist, surely the response is that they are clearly not working because, from all the evidence we have heard, this cruelty is continuing. If the existing legislation simply is not working, surely the option of providing new legislation is precisely what is required.

I do not accept either that the existing legislation is not working or that, if it is not, the way to fix it is to make an amendment that redirects the Online Safety Bill in such a dramatic and fundamental way.

Does the Minister not agree that, on the basis of what has been said in the House today, there is clearly a problem? There appears to be some disagreement over exactly how that problem is to be solved, but does he agree that if there is a problem, it needs to be solved sooner rather than later?

I certainly agree that there is a problem. I am afraid that over the course of a year, the Social Media Animal Cruelty Coalition documented about 5,500 individual links to videos containing animal cruelty on the major platforms—YouTube, Facebook and TikTok—but globally the number of views of those incidents exceeded 5 billion. So I agree that there is a problem but I do not accept that the solution to it is a radical change to the Online Safety Bill, as was debated in Committee. I am open to working with my colleagues in Defra on what a more effective solution might be.

Is the Minister aware that he is very lucky that my almost namesake, the noble Baroness, Lady Fookes, is not in the House today, otherwise he would be in dead trouble?

I am grateful for it.

Would it be of help to my noble friend to consider that what we have heard today clearly sets out a difference between a crime of being cruel to an animal and what he proposes to bring forward in the Online Safety Bill? If in the Bill he simply added at the appropriate point—I am not familiar enough with it to know at exactly what point, but he will know—the words “and all sentient beings”, would that not include some of the animals we are talking about? It would not cover them all since there are other living creatures that would not be regarded as sentient, but certainly primates would be, and they have been mentioned today. Would that help my noble friend? Clearly there is a difference. I say this as someone who had ministerial responsibility many years ago for the welfare of farm animals. Would that not solve the problem? Could he at least explore it?

I am happy to explore all creative and inventive solutions to the very real problem of reducing not only cruelty to animals but people’s deplorable enjoyment of that cruelty.

That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 4 July to allow the Finance (No. 2) Bill to be taken through its remaining stages that day.

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 5, Schedule 1, Clauses 6 to 14, Schedule 2, Clauses 15 to 68, Title.

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Minister for Immigration to an Urgent Question in another place on the publication of the economic impact assessment on the Illegal Migration Bill. The Statement is as follows:

“The Illegal Migration Bill is critical to stopping the boats. Its intent is clear: if you come to the United Kingdom illegally, you should be detained and swiftly returned to your home country if safe or relocated to a third country such as Rwanda. This will help break the business model of the people smugglers, save lives and deter small boat crossings.

The impact assessment published yesterday makes it clear that inaction is simply not an option. The volumes and costs associated with illegal migration have risen exponentially, driven by small boat arrivals. Unless we act decisively to stop the boats, the cost to the taxpayer and the damage to society will continue to grow.

The asylum system currently costs £3.6 billion a year and £6 million a day in hotel accommodation. The impact assessment estimates that, at current spending levels, the Bill would need to deter 37% of arrivals to enable financial savings for the taxpayer. However, the cost of accommodating illegal migrants has increased dramatically since 2020. If these trends continue, the Home Office will be spending over £11 billion a year, or over £32 million a day, on asylum support by the end of 2026. In such a scenario, the Bill would need to deter only 2% of arrivals to enable cost savings.

The impact assessment suggests that passing this Bill could save the UK taxpayer over £100,000 for every illegal migrant deterred from making a small boat crossing. It also found that the Bill could lead to wider benefits, including reducing pressures on local authorities, public services and the housing market.

There is clear evidence that policies such as this have a significant deterrent effect. We considered evidence from Australia. Its Operation Sovereign Borders reduced the number of illegal maritime arrivals to Australia from around 18,000 in 2013 to virtually zero in subsequent years.

The British public are clear that they want to stop the boats. That is why we must keep using every tool at our disposal to stop the boats, and why this Bill must become law.”

My Lords, yesterday the Government released an impact assessment on the Illegal Migration Bill, two days before the first day of Report on the Bill, contrary to the principles of HM Treasury’s Green Book and the Better Regulation Framework guidance to departments. The impact assessment does not contain an explanation of the costs and benefits, does not outline alternative policy options and was not published on the same day that the Bill was introduced.

The impact assessment quite literally states that it has

“not attempted to estimate the total costs or benefits of the proposal”.

It also does not consider anything other than either implementing the Bill as a whole or not implementing the Bill at all. Do the Government believe there are any other options?

The timing of the impact assessment’s arrival has prevented the other place from improving it with its scrutiny. A significant proportion of the time set aside in this House has been taken up discussing the arrival of the impact assessment. Does the Minister think this is good policy-making procedure?

If this House is to perform its critical function of scrutinising legislation, it is necessary for us to have complete, comprehensive and timely information about the basis on which policy choices are made and the reasons alternative options have been rejected. Can the Government now explain why an impact assessment for such a significant Bill does not conform to government guidance on policy communication with Parliament?

I thank the noble Lord. The answer is that there are no other options. The option before the House tomorrow and on succeeding days is the Bill; the alternative is the present scenario, which is not tolerable, in the Government’s view. On the questions about the timing and context of the impact assessment, it was drafted, obviously, in the context of the need urgently to address the dangerous and illegal crossings of the channel. Accordingly, the legislation and the IA were prepared in order to address that problem at speed. It is also the case that the Rwanda scheme was the subject of a legal challenge in the courts, and clearly it was appropriate to take that into account in preparing the impact assessment.

On the question about whether the impact assessment complies with government guidance, I suggest that, in the context of the Bill, it does. It sets out, so far as can be ascertained, the likely impact. But this Bill, like others, is predicated on a strong theory of deterrence, and it is therefore important to note that it is hard empirically to provide detailed statistics, because the purpose of the Bill is to deter the illegal crossings, as the noble Lord acknowledges.

My Lords, it is no wonder that we have had to wait so long for this impact assessment, because it makes very uncomfortable reading for the Government. It tries to justify the unjustifiable by leaving out the costs of so many pieces of the project. It is certainly not rigorous: uncertainty is mentioned 24 times and the Government have looked at only one option. As the House heard in Committee, the Government could have made other choices. This IA cements in uncertainty because it fails to provide a sensible view of the cost consequences, given the outcome of a policy that does not distinguish between those fleeing for their lives and safety, and others.

The impact assessment does not measure the impact on local authorities. It does not measure the impact on the budget of not having the third countries to remove people to, with people having to remain in limbo. It also does not measure the impact on children and the victims of modern slavery, who are not able to obtain protection and support. In essence, this impact assessment has more holes than a Gruyère cheese.

Are the Government diverting resources from reducing the backlog in order to resource the implementation of the illegal migration legislation? That comment has been made in the media throughout the last week: people are being diverted from reducing the backlog in order to make sure that the Bill is resourced.

The impact assessment is clear that, if the deterrent does not work and the numbers arriving do not change, costs will be higher, so why has the range of costs left out the development costs to implement the project? Where is the cost in this assessment of containing more—

Too long!

My Lords, I remind noble Lords that there are 10 minutes for a UQ. Therefore, if noble Lords kept their comments to a minimum, we could get through more questions.

The Government say that this is an “illustrative analysis”—it certainly provides more illustrations than proper analysis of the costs.

I do not accept the premise of the noble Lord’s question, if that is what it was. The impact assessment published yesterday supports the need for change, sets out the broad costs of implementing the Bill, outlines potential savings, and highlights examples of where policy and operations have delivered an impact on illegal migration in other countries. For example, it shows that, for every illegal migrant deterred from making these crossings, the Bill will save the taxpayer £106,000, rising to £165,000 if current trends in accommodation costs continue.

My Lords, can the Minister advise the House as to what weight should be given to this financial and legal impact assessment alongside the damage caused to the consistency of our domestic law and the terrible damage being done to our reputation as a keeper of international treaties?

As I made clear during its earlier stages, the Bill introduces a new legal regime, and it is the Government’s view that it is consistent with our international obligations, which we always strive to meet. It is right that the facts in this impact assessment, and in the overall assessment of the situation made by the Government, are in favour of this legislation.

My Lords, the Statement said that the Bill will have a deterrent effect and that there was strong evidence of that effect. Could the Minister therefore explain why the impact assessment says that

“it is not possible to estimate with precision the level of deterrence that the Bill might achieve”?

It refers also to:

“The academic consensus … that there is little to no evidence suggesting”

such a deterrent effect.

I refer the noble Baroness to the answer I gave in relation to the evidence from Australia, and, in particular, to paragraph 38 of the impact assessment.

My Lords, the Minister used Australia as an example, but has he not noticed that the channel is 20 miles across? With Australia we are talking about thousands of miles, so there is no comparison to be made. How much will the £170,000 to Rwanda cost? What is the budget for that element, and is it built into the assessment?

Yes, I had noted the geographical distinction, but I suggest to the noble Lord that, in theory, the principle is the same: if you arrive here illegally, you will be detained and removed. That has worked in the context of Australia. As for the second part of his question, yes, the impact assessment does assist in the financial planning of the budget and strongly favours progression with the Bill.

My Lords, in the other place, Theresa May said:

“The Home Office knows that the Bill means that genuine victims of modern slavery will be denied support”.—[Official Report, Commons, 13/3/23; col. 593.]

In this House, we were very proud of the Modern Slavery Act, so why are the Government dismantling its provisions?

As the noble Lord is aware, it is the intention of the Bill to create as a tight a framework as possible, and there is a risk that a loophole would be created if the modern slavery provisions were left unamended. That is the purpose of the provisions on modern slavery in the Bill.

My Lords, that is no answer to the noble Lord. The Modern Slavery Act was introduced by the Government, supported by us on this side, and received with pride in all parts of the House. It is being unravelled and there is no proper excuse for that.

The noble Lord will not be surprised to learn that I do not agree with him.

That this House do agree with the Commons in their Amendments 1 to 12.

My Lords, with the leave of the House, as well as moving that this House do agree with the Commons in their Amendments 1 to 12, I will also speak to all the other Commons amendments.

I am pleased to bring the Bill back to the House and to see the progress that it has made since it left. This legislation seeks to drive the change that we know is so desperately needed in the social rented sector. It is vital that everyone learns from the mistakes that led to the Grenfell Tower tragedy, and the Bill will ensure that social housing tenants receive the protection and respect that they deserve. The Grenfell community’s tireless campaigning will leave a legacy of real change to social housing in this country.

The need to drive up the quality of social housing and rebalance the relationship between tenants and landlords was also thrown into sharp relief by the tragic death of Awaab Ishak. I know that Awaab’s father is watching today, and I know that I speak for all of us when I say that my thoughts remain with the Ishak family. I thank the family, along with Shelter and the Manchester Evening News, for their steadfast campaigning on Awaab’s law. This law will make a real difference to people’s lives, and I hope that it brings some degree of comfort to all those who knew and loved Awaab.

As I shall set out, the Government have listened carefully to the points raised, both in this House and in the other place, and tabled amendments in the other place to strengthen the legislation to its fullest extent. Commons Amendments 10, 11, 12, and 13 amend the clauses added by this House on competency and conduct standards and make provision for them to require that senior housing managers and senior housing executives have, or are working towards, appropriate level housing management qualifications.

We have also tabled a further amendment to the Bill to ensure that relevant managers employed by organisations which deliver housing management services on behalf of a registered provider are captured by the legislation, as was our original intention. I thank the noble Baroness, Lady Hayman of Ullock, for bringing the need for this amendment to my attention. This amendment will require registered providers to take steps to secure that relevant managers of these delegated services providers are qualified.

Our amendment also introduces implied terms into the contractual agreements between registered providers and delegated services providers and relevant sub-agreements, stipulating that their relevant managers should have, or be working towards, a specified qualification in housing management. This enables registered providers to take action against delegated services providers who are not compliant. These amendments, which have been welcomed by Grenfell United and Shelter, will drive up professional standards and the quality of housing services across the sector.

I turn to the amendments that we tabled in the other place on Awaab’s law. I am sure that I am not alone in saying that I was deeply shocked and saddened by the tragic death of Awaab Ishak. Commons Amendment 28 takes a power for the Secretary of State to set out requirements for landlords in secondary legislation to investigate and rectify hazards within a certain time. The amendment also inserts an implied covenant into tenancy agreements that landlords will comply with the requirements prescribed in regulations; this will impel landlords to deal with hazards such as damp and mould in a timely fashion, knowing that, if they fail to do so, they can face legal challenge from residents.

We have also introduced Amendments 14, 15, 17 and 29, which will ensure that the regulator sets standards for landlords to provide tenants with information about how to make complaints, and about their rights as tenants.

Commons Amendment 27 will give the ombudsman explicit statutory power to publish guidance on good practice, alongside the power to order landlords to complete a self-assessment if the ombudsman has received a relevant complaint about a landlord.

Amendments 1 and 2 repeal the provisions in the Housing and Regeneration Act 2008 which provide a specific power to enable the regulator to charge fees for inspections. Those fees will be recoverable under the regulator’s fee-charging powers under Section 117 of the Housing and Regeneration Act 2008, so the specific inspections power is now unnecessary.

Amendments 3 to 9 are technical amendments concerning moratorium procedures when the regulator is unable to locate any secured creditors.

Amendment 16 removes Clause 24 relating to energy demand, which was inserted into the Bill by this House. Although we are sympathetic to the aims of the clause, and we agree with the need to continue progress on making social homes warmer and more energy efficient, we do not believe it is appropriate to set consultation parameters without ministerial oversight. We recognise that the sector would benefit from clear standards to support energy efficiency improvements: that is why we announced that we will consult on standards for improving energy efficiency in the sector within six months of the Bill receiving Royal Assent. We remain committed to this, and officials have already begun work on this consultation. I am able to give noble Lords here today an indication of some of the areas for consultation. We will ask what the appropriate compliance date is for meeting an energy efficiency standard, what energy performance metric this should be measured against and what, if any, exemptions are appropriate.

Amendments 18 to 21 and 23 to 26 deliver technical changes that will ensure that, during a survey or emergency remedial action, any decision to leave equipment or materials on the premises takes into account the impact of that on tenants.

Amendment 22 amends requirements relating to the production and publication of an inspector’s report following the completion of an inspection. These amendments provide that the inspector must produce a summary of findings, as well as a report on any matters specified by the regulator. Amendment 31 was tabled to remove the Lords privilege amendment in Committee in the other place.

Amendments 32 to 51 deal with notices under Sections 104 to 108 of the Housing and Planning Act 2016. These amendments ensure that technical requirements relating to notices do not prevent the legislation working effectively, and help make provisions relating to insolvency easier for the regulator to operate.

Finally, Amendment 53 introduces a provision to clarify the relationship between the data protection legislation and Part 2 of the Housing and Regeneration Act 2008. I beg to move.

My Lords, I welcome the Commons additions to this important Bill. As a prelude, I thank the Minister for the earlier amendment she promised and delivered before the Bill left your Lordships’ House. This created the duty for the social housing regulator to carry out regular, routine inspections rather than just looking at the social landlord’s accounts and paperwork. This amendment had been earnestly requested by the Grenfell United group, which has campaigned tirelessly to improve key aspects of social housing regulation. If only the regulator’s team had made an inspection visit to the social landlord of Grenfell Tower and talked to residents, it would have been obvious that all was not well. The Minister has taken a close personal interest in the aftermath of the Grenfell tragedy, and I congratulate her on the amendment she brought forward which will now ensure routine inspections are a key part of the regulator’s future role.

I now welcome Commons Amendment 17, Awaab’s law, which will strengthen the role of the regulator in requiring social housing landlords to deal swiftly with problems of disrepair. Sadly, some housing associations and some councils have not been on top of these issues, with tragic consequences. There is a need now for some serious investment in the upgrading of outdated public housing, mostly from the 1960s and 1970s. As well as encouraging social landlords to listen more attentively to the matters raised by their residents, I hope we are moving to an extension of the ombudsman role, which will cut down the need for some of the sharp practices of the no-win, no-fee lawyers, who can exploit tenants’ predicaments. There is more to do here.

In particular, I greatly welcome the new Amendment 13B, which covers standards relating to competence and conduct. This amendment is of particular concern to the Grenfell United group and is intended to achieve greater professionalism of the social housing sector, requiring senior housing managers and executives to have or to work towards relevant qualifications. The noble Baroness, Lady Sanderson, raised these issues on behalf of Grenfell United when the Bill was in this House. We have had to wait until conclusions were reached in the other place to amend the Bill accordingly, but the wait has been worth while and I pay tribute to the noble Baroness.

These Commons amendments to Clause 21 will, over time, see the social housing sector properly “professionalised”. This approach was advocated for personnel managing privately rented and leasehold properties by the Government’s working group on the regulation of property agents, which I was pleased to chair. That badly needed change has yet to come about for the private rented sector, although the matter may be raised in the forthcoming Renters (Reform) Bill or the leasehold reform Bill. In the meantime, measures akin to those proposed for managers of privately rented homes will now be applied by this Bill to the management of the social housing sector. This enhancement of the skills of social housing personnel will greatly increase the role and responsibilities of the Chartered Institute of Housing, which is well able to play a vital role here.

My Lords, I declare my interests as co-chair of Peers for the Planet and in that I have a family member currently working in the field of energy efficiency. I will respond to the Government’s Motion to agree with the Commons in its Amendment 16. It removes Clause 24, on energy efficiency, which was inserted with cross-party support on Report. Our amendment sought to ensure a comprehensive approach to energy efficiency for tenants in social housing, to reduce their costs and to improve living conditions. It would also have cut the costs to government—and the taxpayer—of subsidising energy bills and helped with energy security and achieving the Government’s target of reducing energy demand by 15% by 2030.

The importance of energy efficiency has been highlighted by numerous committees and reports from this and the other place, including one recently from the Public Accounts Committee which highlighted the problems so far with energy efficiency schemes, including the lack of coherence. It said they had been “fragmented” and that

“stop-go activity has hindered stable long-term progress towards government’s energy efficiency ambitions.”

It is important that real progress has been made during the passage of this Bill. We should remember that, at an earlier stage, energy efficiency was added to the objectives of the Regulator of Social Housing, with the support of the Government. I pay tribute to the work of the noble Baroness, Lady Pinnock, in achieving that end.

The Minister and her officials have been generous with their time in discussions prior to today’s proceedings —I am very grateful for that—in which she stressed the centrality of consultation with the sector before imposing standards. We have made progress, as she said, with a commitment to publish a consultation within six months of Royal Assent. As the Minister has heard me say before, in the past, the Government have been rather better on publishing consultations than responding to them, and much better than on actioning the policy that was their original subject. Can she give any further reassurances about timelines for a government response to the consultation and the provision of a final plan to improve the energy efficiency of social housing within 12 months of Royal Assent?

While we have not made as much progress as I would have wished on this issue, we all understand that the priority of the Bill has been the urgent need for effective regulation of social housing, and I completely recognise any concerns about diverting from that central objective. I also recognise that energy efficiency is an issue not just for the social housing sector but across the whole of our housing stock. It arises mainly from the quality, or lack thereof, of that housing stock. As the Minister knows, I have tabled amendments to both the levelling-up Bill and the Energy Bill to try to address what we are talking about in this Bill: the need for a long-term strategic plan of action which would include but not be exclusive to the social housing sector.

This is an issue to which we will return, but I hope the Minister can give me some reassurance on the issues I have raised when she sums up.

My Lords, amazingly, it has been eight months since this House last discussed the Bill. At that time, I welcomed it and many of the details it provided to improve the regulation of social housing. However, across the House, noble Lords challenged the Government to think again on some of the detail of the Bill. The noble Lord, Lord Best, and the noble Baroness, Lady Hayman, have outlined some of the ways in which the Bill was challenged and subsequently improved.

I am pleased to say that some of the government amendments in the Commons have indeed built on the amendments made on Report in this House. I particularly support Commons Amendment 13, which sets new professional standards for senior social housing managers, as I do the power for the ombudsman to provide best practice guidance. Those are two great improvements made to the Bill since it first started in this House.

The Commons also introduced into the Bill “Awaab’s law” in memory of the tragic death of two-year-old Awaab Ishak, which was caused by appallingly damp and mouldy conditions in the flat where he and his family lived. The response of the social housing landlord was shockingly neglectful—and, as it turned out, fatally neglectful for poor young Awaab. I congratulate the Government on introducing that new clause to address those responsibilities and to ensure that social landlords properly address what is described in the amendment as “prescribed hazards”. Let us hope that this is sufficient to ensure that no family lives in such dreadful conditions again—albeit it applies currently to social housing only.

Finally, although I am pleased that on Report the Government accepted my amendment to include energy efficiency as a core responsibility of the regulator, I am disappointed that they have not been able to be as positive about the amendment in the name of the noble Baroness, Lady Hayman, agreed by this House, which contained a comprehensive approach to energy efficiency that my simple amendment failed to do. We have a challenge as a country, and the Government have a responsibility to make changes so that homes are warmer and less expensive to heat. There was an opportunity to do so; unfortunately, the Government failed to accept it.

However, I am pleased that the Government and the Minister have agreed to consult—although, as always, the caveat is the question of what that will lead to, as the noble Baroness, Lady Hayman, alluded to. I am sure that the noble Baroness and many of us in this House will scrutinise closely the outcome of such a consultation. This is an important matter. We need to get it right. People should not be living in cold homes because they cannot afford to heat them. If the Government have the power to make a change, we will press them to do so.

I want to end on a positive note. We on these Benches support the Bill and trust that social housing tenants will see the benefits that it should bring.

My Lords, this is a really important Bill. I am pleased to see it reach this stage; we have supported it all the way through. It has been a pleasure to work on a Bill that I think is the kind of Bill we ought to be doing. It is short, it is focused and it has a Minister who listens. That has been extremely good to work with. I am really pleased to see the government amendments that have been put forward, in particular those around professionalisation. I also pay tribute to the noble Baroness, Lady Sanderson; her work during the passage of the Bill was exceptional and is, I am sure, one of the main reasons why we have these amendments before us today. On Awaab’s law, I join the Minister and other noble Lords in paying tribute to his family.

I am pleased that the Government have listened to the concerns raised by the arm’s-length management organisations and tenant management organisations, as well as the National Housing Federation, in bringing forward the amendments that dealt with the concerns there.

The noble Lord, Lord Best, welcomed the promised amendment on inspections that was so important to Grenfell United. We are absolutely delighted that the Minister has brought forward those amendments today. I want to thank Grenfell United, Shelter and the Ishak family for their work and support during the passage of this Bill; it has helped us to keep the important issues at the centre and as the focus of what we need to achieve.

I thank the noble Baroness, Lady Hayman, for pushing the energy efficiency amendments, which are really important. It is good that we did not lose sight of them during the Bill’s passage and that we have made some progress. I also thank the noble Baroness, Lady Pinnock, for bringing forward her amendment on that.

I thank the Minister and her officials for their time and their constructive approach to working with us, the Opposition, and other noble Lords during the Bill’s progress through the House. It has enabled us to make what was a good Bill a much better Bill—one that is more fit for purpose.

Finally, I thank my noble friend Lady Wilcox for her invaluable help and support. I am sure that we are now both looking to see the Bill go on to the statute book, so that we can raise our eyes up and look forward to the Renters (Reform) Bill.

My Lords, I am grateful to all noble Lords who have contributed and for the wide-reaching support for this important Bill. In particular, I thank my honourable friend the Member for Bishop Auckland for steering the Bill so ably through the other place. I also thank the department’s Bill team, all the policy and legal officials, and my private office team, who have worked hard over the past year to deliver this legislation through both Houses. I especially thank the House authorities, parliamentary staff, clerks and doorkeepers, and all noble Lords who have contributed to the evolution of this Bill.

That this House do disagree with the Commons in their Amendment 13 but do propose Amendment 13B in lieu—

That this House do agree with the Commons in their Amendments 14 to 55.

That this House do not insist on its Amendment 7 and do agree with the Commons in their Amendments 7A, 7B and 7C in lieu.

My Lords, I beg to move Motion A and, with the leave of the House, will also speak to Motions B and C. I am grateful to all noble Lords for their considered scrutiny of the remaining issues in front of us today and throughout the Bill’s passage.

I will speak first to Lords Amendments 7 and 36, and I thank the noble Baronesses, Lady Hayman and Lady Boycott, in particular, for their leadership on these issues during the passage of the Bill.

The UK is a global leader in sustainable finance. The Government’s ambition to support the growth of this important area is demonstrated by the amendment relating to sustainability disclosure requirements made on Report, and the amendments in lieu of Amendments 7 and 36 introduced during Commons consideration.

I turn first to Lords Amendment 7. The regulators have an important part to play in supporting the Government’s ambitions, which was demonstrated by the inclusion of the net-zero regulatory principle at introduction. The Government have reflected carefully on the calls to ensure that the regulatory framework also reflects the Government’s nature targets.

While I welcome the intention behind Amendment 7, the Government cannot accept this amendment because it is too broad and therefore too open to interpretation. We have therefore brought forward Amendments 7A, 7B and 7C in lieu of Amendment 7, which add the relevant and well-defined targets made under the Environment Act 2021 to the new regulatory principle. It is important to recognise that addressing climate change and nature issues is not the regulators’ primary function, which is, broadly, to advance their objectives, including to protect the integrity of the financial markets and the safety and soundness of firms within the financial system and to deliver appropriate protection for consumers. Most of the levers for reaching our net- zero and environmental targets sit outside the regulators’ remit and control.

The amendments in lieu will ensure that, when acting to advance their objectives, the regulators will be required to consider the Government’s commitments to achieve the net-zero emissions target and the environment targets. I assure noble Lords that the amendments do not weaken the requirement for the regulators to consider the Government’s net-zero target. FSMA requires the regulators to act in a way that advances their statutory objectives when carrying out their general functions. When advancing their objectives, the regulators must also have regard to the regulatory principles, which aim to promote good regulatory practice.

It is for the independent regulators to decide how best to meet the requirements placed on them in legislation when discharging their general functions. The drafting of the amendments in lieu makes this clear: the regulators are required to have regard to the regulatory principle only in so far as it is relevant to advancing their objectives. This does not change the effect of the net-zero requirement, but the Government considered that this additional language was needed, alongside expanding the principle, to make this point clear and to ensure consistency. I am confident that the Government’s approach meets the intended effect of Amendment 7, and I hope noble Lords will acknowledge it as a significant step to further support the growth of sustainable finance in the UK.

I turn to Lords Amendment 36 on deforestation-linked financing. As I set out on Report, the Government again support the intention behind this amendment. The policy considerations for tackling the financing of deforestation risk commodities are complex. We are grateful for the work of the Global Resource Initiative and in particular its report on this issue from May 2022. This emphasised the need to take a staged approach and that further exploratory work would be needed to investigate the implementation of a prohibition on the financing of the use of prohibited forest risk commodities.

The Government have therefore brought forward Amendment 36A in lieu of Amendment 36, which commits the Treasury to undertake a review to assess whether the financial regulatory framework is adequate for the purpose of eliminating the financing of illegal deforestation and to consider what changes to the regulatory framework may be appropriate. This will ensure that any intervention is scoped appropriately and that the UK moves in lockstep with our international partners to ensure the effectiveness of any regime in tackling the financing of illegal deforestation.

The Treasury will be required to undertake this review within nine months of the first relevant regulations under Schedule 17 to the Environment Act being made. This will enable the Government to reflect those regulations in the review, which is essential if we are to have a joined-up and effective approach.

As the Government set out in the updated green finance strategy, we will convene a series of round tables this year. These will form the basis of a taskforce to drive forward the work of this important review and support the development of clear conclusions. This will complement the Government’s existing commitment to explore how best the final Taskforce on Nature-related Financial Disclosures—or TNFD—framework should be incorporated into the UK policy and legislative architecture. As the GRI report acknowledged, the developing work of the TNFD is increasingly important, especially as it has now included recommendations relating to deforestation in its draft standards.

Following the review, the Government will consider what further action is appropriate to progress the goal of eliminating the financing of illegal deforestation. The Bill and the existing provisions in FSMA provide the Treasury with extensive powers, including through the regulated activities order or the designated activities regime, to bring new activities into the scope of regulation if needed.

Finally, I turn to Lords Amendment 10. As the Economic Secretary set out yesterday, and as I set out on Report, the Government cannot accept this amendment. While I acknowledge the intention behind it, I reiterate the point that financial inclusion is a complex societal issue that cannot be solved through financial regulation alone. The Government are committed to the aim of ensuring that people, regardless of their background or income, have access to useful and affordable financial products and services. The Government’s view is that the FCA’s current and ongoing initiatives around financial inclusion demonstrate that it can already effectively support the Government’s leadership on this agenda through its existing operational objectives and regulatory principles.

Parliamentary scrutiny of the introduction of the new secondary growth and competitiveness objectives for the regulators comes after two consultations on the Future Regulatory Framework Review and extensive engagement with industry and other stakeholders. It is not appropriate to amend the regulators’ objectives, which are crucial to the effective regulation of financial services in the UK, at this late stage of the Bill’s passage without due consultation. Furthermore, the FCA’s new consumer duty, which comes into force on 31 July, seeks to set a higher and clearer standard of care that firms owe to their customers, and includes a new principle requiring firms to act to deliver good outcomes for consumers. It is important that the sector is given the opportunity to embed these important new requirements before considering further action of a similar nature.

I ask noble Lords not to insist on Amendments 7, 10 and 36 and to agree with the Commons in their Amendments 7A, 7B, 7C, and 36A in lieu. I beg to move.

My Lords, I declare my interests as set out in the register, and will speak to Amendment 7A. I thank the Minister and her team for the considerable efforts that have been put in, since the Bill left this House, to find a way to respond positively to the issues raised in my original amendment, which was supported from all sides of the House. As the Minister knows, the central issue was that of providing a clear legislative basis for financial regulators to act, not only on our climate change duties, which the Government themselves recognised and included in the original Bill, but in relation to our duties relating to the natural environment.

This issue is seen as important in Parliament but also outside it. The inclusion of nature was supported both by Professor Sir Partha Dasgupta and, in a statement last week, by a group of eight leading financial firms. I am extremely pleased that the Government decided not to try to completely overturn the amendment but to introduce the amendment we have before us now, the basis of which the Minister has just explained. It recognises that the importance of climate should go alongside the importance of nature, which was not there originally.

My Lords, I will speak to Amendment 36, which was in my name and those of the noble Baronesses, Lady Sheehan and Lady Chapman, and the noble Lord, Lord Randall. I echo the words of the noble Baroness, Lady Hayman, by thanking the Minister very much for the time she spent working with us on this amendment and trying to lay out exactly why it has not quite passed. I am super grateful for the efforts that were made. I support everything that the noble Baroness, Lady Hayman, just said. We have to make sure that nature runs through everything we do like a stick of Brighton rock. It is extremely important. We cannot survive without it.

Amendment 36 would have introduced mandatory checks to protect the UK financial sector from lending to or investing in companies that engage in illegal deforestation and land grabs against indigenous peoples. It passed a vote in our House, which was wonderful, but sadly it was defeated in the other place, so instead of a new law to stop finance flowing to companies that plunder the environment, I am afraid we have ended up with another review.

I say that with sadness, because we have only just finished the last review into how to stop deforestation finance. That was the three-year inquiry by the Government’s expert body, the Global Resource Initiative —GRI—task force. I suppose many people have said this, but I will say it again: just to commission another review until one of them churns out an acceptable policy is not great governing. The GRI task force was composed of finance and business leaders, as well as civil society. It was excellently put together. It was tasked to provide a cross-sector blueprint to reduce the UK’s contribution to deforestation. In May last year—just over a year ago—it recommended that UK financial services firms should be obliged to check for the risk of any deforestation, legal and illegal, as well as any human rights abuses. The GRI recommended a due diligence regime much more far reaching than the one we proposed under Amendment 36, which, I hasten to emphasise, was limited to illegal deforestation only. Even the financial sector itself does not want this approach, as evidenced by the fact that investors representing £2.7 trillion publicly supported our amendment.

I will not push this Motion to another vote but, given the strength of support we have seen and the consensus behind the introduction of mandatory due diligence, I will ask the Minister for three clarifications. First, can she confirm that the Treasury’s review will put forward a specific proposal for a comprehensive due diligence system to prevent the financing of deforestation rather than another re-evaluation of what type of intervention is needed? It is vital that we do not waste any more time or money repeating the work of Sir Ian Cheshire and his GRI task force. This is not an excuse to wriggle out of due diligence and derogate to more reporting under frameworks such as the TNFD, which we discussed extensively at our meeting last week. I really hope to see a much more ambitious plan.

Secondly, can the Minister confirm that all forest risk commodities will be regulated under Schedule 17 to the Environment Act? Thirdly and finally, can she confirm here today a final date for when the now extremely delayed secondary regulations under Schedule 17 to the Environment Act will be made? The Treasury’s review will be limited at the moment to an investigation of how the UK finances prohibited commodities. This is fraught with problems, not least the fact that these regulations are nearly two years delayed. It also means that if the Government choose not to cover all forest risk commodities in that regime, the review will not be worth anything. For example, Defra’s June 2022 consultation proposed covering only two commodities. There were 14,000 respondents, and 99% of responses said that the law should cover all forest risk commodities, including cattle, palm oil, soy, rubber, cocoa, coffee and maize. This is the approach that the EU has taken. We risk becoming a laughing stock if our apparently world-leading secondary regulations cover only cocoa and soy, for instance.

To sum up, I am thankful that the Minister and the Economic Secretary have adopted a sensible proposal to allow the country’s financial regulators to address the threat of biodiversity loss. Our regulators should pay attention to nature because it is the bedrock of all our systems, but there is an irony to accept that an amendment merely commissioning a review into deforestation is all we are going to do. I spoke last week to the head of science at Kew, Alex Antonelli, and asked him to give me the up-to-date data from Kew about the state of deforestation across the world. He told me that illegal logging is the most important resource crime in the world and is valued at between $52 billion and $157 billion a year. Illegally obtained timber accounts for between 10% and 30% of all global timber that we all use, but in south-east Asia, central Africa and South America, between 50% and 90% is illegally obtained, so I think that the Government’s efforts need to be speeded up. But I will not oppose Motion C, and I thank the Minister for her considerations.

My Lords, it is a great privilege to follow the noble Baronesses, Lady Boycott and Lady Hayman. I congratulate my noble friend the Minister on her diligence in trying to come to some solution to our demands. As we have just heard, it is not quite what we wanted but it is getting there, pretty much. Personally, I am sure that the Minister shares our concerns, but sometimes the Treasury is a bit like one’s parents in saying, “You can’t have it all at once; you have to wait and be ready for it”.

I reiterate the questions asked by the noble Baroness, Lady Boycott, regarding regulating all forest risk commodities under the secondary regulations, and ask also for a firm date. I am delighted that we have got as far as we have but I would say, not just to my noble friend the Minister but to all other noble friends and Ministers, that we will not rest here. As we have heard, deforestation is one of the biggest crimes going on in the world and a threat to us all. We shall continue with this.

My Lords, I first pass on the apologies of my colleague and noble friend Lady Kramer, who is unable to be in her place; hence, you have me instead. I identify with the comments made by the noble Baronesses, Lady Hayman and Lady Boycott, and will not repeat them. Although the Government have given some territory, I do not feel that it is substantial enough.

Two points in particular worry me. The first is with regard to the climate change targets and the wording that

“each regulator considers the exercise of its functions to be relevant to the making of such a contribution”.

The Minister emphasised in her introduction that the regulators have to consider that it fits in squarely with their major objectives. That is quite a discouragement to them to pursue these matters. The regulators do not have to follow every objective and principle anyway; so they do not have an objective or principle and this has now been further diluted by that wording. So, while it is good that there is something on the face of the Bill, a lot of following up will be needed to make sure that something happens.

When it comes to the forestry issues, yes, there will be another consultation—another delay—but why do we have to be in lockstep with our partners? I thought we wanted to be leaders. That means you have to be prepared to go out there and, if you are a leading financial centre, show that it can be done. To always tie ourselves down, to be in lockstep, means that there is a fear to move, there is trepidation, and that does not mark us out or distinguish us as a financial centre. I therefore hope for better, and I hope that comes out of the Treasury’s review.

Overall, the Bill has seen issues raised on all sides of the House and a lot of common thinking. Yes, there has been some yielding by the Government as a consequence—though in general I would say not enough —but this shows that the mood and understanding of this House and of the industry are that the size and momentum of what we are doing in delegating everything to regulators need to have a little more beefing up when it comes to accountability and how matters can be pursued if the regulators do not do things, if they do not do them quickly enough, and so on. In quite a lot of our amendments we have tried to pursue those issues but we have got nowhere. I think that means we will be coming back.

My Lords, I want to comment on Motion B, which no one has addressed. I congratulate the Minister, her colleagues, the Bill team and all the Peers who have contributed to this 337-page whopper of a Bill, which has been broadly welcomed by all. I remind your Lordships of my declaration of interests, which includes the fact that I am an employee of an FCA-regulated business that is currently seeking to merge with another FCA-regulated business.

That takes me to Amendment 10. Within the Bill are the important amendments to Sections 1B and 1E of FSMA 2000. Amendment 10 seeks to add subsection (2)(ca) to the already strong provisions for consumer protection in Section 1C(2)(a) to (h). I agree with my noble friend the Minister that we should not push through Amendment 10.

I can tell my noble friend the Minister and fellow Peers that in the market the Bill is desperately sought. There is still huge frustration at the FCA about the time taken to progress and execute transactions. That has been a significant block on economic growth, which is one of the objectives that the FCA will now have. I ask the Minister to ensure that the FCA is aware of its new objectives and requirements and that this actually takes place in practice.

My Lords, we on these Benches supported all three of the amendments that we are discussing today when we looked at them last time, including Amendment 7, which would expand the regulatory principle on net-zero emissions to include conservation and nature. We also voted for Amendment 36, imposing a duty on those conducting regulated activity to conduct due diligence with the aim of preventing illegal deforestation.

We have listened carefully to what the Minister has said and will be listening to what she says in response to this debate, particularly to the questions asked by the noble Baroness, Lady Boycott. However, I thank the Minister for her openness in engaging with these issues and for the amendments in lieu, which demonstrate an agreement with your Lordships that these are issues that the Government need to address urgently. They may not be doing so in a way that we would have preferred today, but it is right that we acknowledge the moves that the Government have made.

Amendment 10 in my name would require the FCA to take financial inclusion into account when advancing its consumer protection objective of securing an appropriate degree of protection for consumers. The Government disagree with that amendment, saying they consider that the FCA is already able to tackle issues of financial inclusion within its remit. We argue that the problem is that the Government have failed to address our key concern in tabling the amendment, which is about the poverty premium—that is, the extra costs that poorer people pay for essential services such as insurance, loans or credit cards.

We see this Bill as something of a missed opportunity to build a strong future for our financial services and rethink financial resilience, including how some of the wider well-being issues are tackled by the regulator in the future. Everybody should be able to access the financial services they need, regardless of their income or circumstances. Although we do not intend to push this to another vote today, I can assure noble Lords that we will be returning to this subject at every opportunity—especially if that opportunity arrives in the form of a Labour Government.

For now, I place on the record our sincere thanks, particularly to the noble Baronesses, Lady Hayman and Lady Boycott, who have been highly effective in raising nature and deforestation issues. I also thank my noble friends Lord Livermore and Lord Tunnicliffe for their work on this Bill. We are probably at the end of it now. I note what the noble Lord, Lord Leigh, said about the need to get this Bill through and on to the statute books for the benefit of this important sector.

My Lords, I am grateful to noble Lords for the debate today, and I would like to address some of the points raised.

On the addition of the obligations under the Environment Act to the principle on climate change, I intended in my opening speech to clarify some of the language in that amendment. I am very happy to emphasise again the Government’s intention that the legal effect of the new provisions will be the same as the original climate principle, with the addition of the targets under the Environment Act. The intention is that it will be at least as strong as the provisions in the Financial Services Act 2021. I explained in opening the reasons for amending the language. It is not about diluting the principles or commitments, but further clarifying them, given that these are new areas.

I accept the noble Baroness’s point that often, these issues can be two sides of the same coin. We had the debate on whether the issues were sufficiently covered by just mentioning climate. Adding the explicit reference to the Environment Act targets led to a desire to be even clearer about the effect of that principle, but it has not changed in the wording of our amendment.

On Lords Amendment 36, there were questions on the timing of the provisions under Schedule 17 to the Environment Act. I am afraid that, as hard as I have tried, I cannot provide a definitive date, but I reassure noble Lords that I have met the Minister leading on this at Defra. Work is under way to bring forward those regulations, and we are seeking to do it at the earliest opportunity.

The noble Baroness, Lady Boycott, and my noble friend Lord Randall of Uxbridge asked what commodities those provisions will cover, and the noble Baroness mentioned a consultation on two forest risk commodities. My understanding is that the consultation and impact assessment covered a variety of policy options across three different turnover thresholds and seven different commodities. While I cannot pre-judge the outcome of the regulations under Schedule 17, our approach to this review will mirror the approach taken forward under Schedule 17.

On the point about the outcomes of this review, I am sure that the noble Baroness will understand that I cannot prejudge that, but I can say that it is not intended to duplicate work already being done; it should build on it. I am happy to make sure that noble Lords and other parliamentarians are involved in the progress of that review as we take it forward, so that they can see that it is heading in the right direction.

I thank the noble Baroness, Lady Chapman of Darlington, for the constructive way she has approach the Bill in its latter stages. She raised the issue of the poverty premium that can be placed in financial services. We are progressing work in areas where the poverty premium can occur. For example, we are working with Fair4All Finance, the organisation set up to use funding from dormant assets for financial inclusion, to improve access to affordable and appropriate financial products, including a package of tailored support to scale affordable credit in order to help the sector develop a sustainable model for serving people in vulnerable circumstances. We also looked at issues in the insurance industry in a number of areas, in terms of outcomes and access. We will continue to look at the areas where the poverty premium occurs, the factors that are driving it and the right levers we should think about to address it. It is different for different sectors, services and products, but that work will continue, despite our not being able to accept the noble Baroness’s amendment.

I therefore ask noble Lords not to insist on Amendments 7, 10 and 36 and to agree with the Commons in their Amendments 7A, 7B, 7C and 36A in lieu.

That this House do not insist on its Amendment 10, to which the Commons have disagreed for their Reason 10A.

That this House do not insist on its Amendment 36 and do agree with the Commons in their Amendment 36A in lieu.

That the Bill be further considered on Report.

My Lords, I put on record my thanks to my noble friend Lord Johnson of Lainston, who took the Bill through its first day of Report last week, and my noble and learned friend Lord Bellamy for his work in the run-up to today’s debate. I extend my thanks to noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. This collaboration has resulted in comprehensive and much-needed legislation—

Would the Minister like to move that we move on to this item of business before he moves his first amendment?

I beg to move.

As I was saying, I put on record my thanks to my noble friend Lord Johnson of Lainston and my noble and learned friend Lord Bellamy, but I also extend my thanks to all noble Lords for the constructive debate we have had so far on the Bill, both in Committee and in separate meetings. It is nice to be able to say that more than once. This collaboration has resulted in comprehensive and much-needed legislation. As my noble friend Lord Johnson set out, the Government listened to the views of the House during the passage of the Bill and have moved to address many of its concerns in the amendments tabled for Report.

My Lords, briefly, I congratulate the Government on bringing forward the amendments; they will enhance the operation of the Bill. However, while we debate what could cover so-called crypto assets, I want to put on record my concern that by calling them “assets” and by not banning them from conventional financial markets we are potentially encouraging economic actors and criminals who demand payment in these untraceable types of so-called money. There is a danger to both our financial system and society if we continue to try to suggest that they are, in any way, conventional media of exchange.

My Lords, I reflect back the point made at the beginning by the Minister—in fact, made in triplicate—that this has been a co-operative approach. In fact, I was one of the people who raised the issue of crypto assets at the beginning. There was good consultation with the team involved, and the Government brought forward a number of amendments in Committee and on Report.

As the Minister acknowledged, the issue is going to have to be flexibility going forward, and the ability to make changes and to understand how criminals are using crypto assets and other assets to commit fraud will be very important. Having the ability to come back to Parliament and make those changes will be key to the success of this Bill. In that respect, anything that improves flexibility, as I think these amendments do, will be very helpful.

My Lords, I reiterate what the noble Baroness, Lady Altmann, and the noble Lord, Lord Fox, have said: there has been a co-operative approach to this Bill, which I think will make it a better Bill. I was going to make exactly the points that the noble Lord, Lord Fox, has just made about the need to build in a way of feeding back to Parliament, particularly given that crypto assets are a very turbulent technology; it is a very turbulent industry. We know about the criminality endemic within these types of so-called assets. The point has been made by the noble Lord, Lord Fox, that Parliament needs to find a way, through flexibility and feedback, to make sure that the appropriate regulations are kept in place.

My Lords, I thank all noble Lords for their brief points in this debate. Broadly speaking, I agree with all the points that have been made. It is important to maintain a high level of flexibility, because this is a very fast-moving space technologically as well as with regard to the use of these assets in the broader economy and for other purposes. I agree with everything that has been said. Obviously, these amendments allow us to maintain a high degree of flexibility, so I ask noble Lords to support them. There is not much point in saying anything else at this point.

My Lords, we now come a group of amendments about strategic lawsuits against public participation, or SLAPPs. These were much debated at Second Reading and in Grand Committee. As noble Lords will be aware, SLAPPs is the rather ungainly acronym to describe the abusive threats of litigation and actual litigation by deep-pocketed individuals with the intention of preventing journalists or others from revealing the truth, very often about economic crime or, at the very least, economic activity which the claimant would much rather was not revealed at all, or certainly not to the general public. This is a worldwide problem which has received a variable response.

In a sense, there is nothing new about SLAPPs. Powerful men have often used litigation to try to silence their critics, but there have recently been some egregious examples. The difficulty always exists in separating out genuine complaints by powerful men or organisations and those which have been commenced for a collateral purpose. When SLAPPs were debated at Second Reading, it was thought that amendments to prevent or limit such lawsuits would be outside the scope of the Bill. I am glad to say that that has now proved not to be the case, although it is clear that the relevant amendments, either mine or the Government’s, are focused on economic crime as opposed to wider areas of criminal activity which might provoke a strategic lawsuit. The Government’s position at Second Reading appeared to be that they were sympathetic to the notion of legislation in this area. However, they thought that the whole issue needed separate and mature consideration and should not be part of any amendment to this Bill.

I am delighted that the Government have changed their mind and brought forward amendments in this group which we will debate. I understand that the new Lord Chancellor has had much to do with this, and I thank him and the Minister for tabling the amendments.

A number of noble Lords have spoken about SLAPPs, including the noble Lords, Lord Agnew and Lord Cromwell, who gave a graphic description of the mischief at which any change in the law should be directed. My difficulty with any potential amendment was always that the courts have powers already to strike out abusive proceedings, but they tend to be extremely cautious about doing so, on the basis that striking out is a somewhat draconian remedy. Courts tend to be persuaded that it is better to see how the evidence emerges before putting a case out of its misery, but that can be too late. Huge expenditure will have been incurred, often by relatively impecunious defendants. Sometimes they have no realistic alternative but to capitulate—delay is plainly the friend of those who use SLAPPs. The best chance, in my experience, of striking out a claim is when there is a clear point of law, but even then there can be appeals and further expense, which work in favour of an abusive claimant.

The government amendments are clearly aimed in the right direction, but I can already foresee a few difficulties. There will be significant arguments as to what does or does not constitute a SLAPP, for example. That issue of itself has a lot of litigation potential. I am also concerned about the process of making the relevant Civil Procedure Rules. This can be a lengthy process, and is always a carefully considered process. I have studied the recent minutes of the Civil Procedure Rule Committee, so as to inform myself as to how the committee approaches rule changes. I would be grateful if the Minister could explain to the House how this amendment will make its way into the rules and the likely timescale.

Those reservations apart, my view is that we should go further. As pointed out at Second Reading by the noble Lord, Lord Thomas of Gresford, who has put his name to this amendment, there is no obvious reason why there should not be a criminal offence in this area.

I invite the House to consider a client consulting his expensive lawyers. He wants to take every step he can through litigation to suppress and exhaust the funds of those who would expose him. He utters those words which lawyers tend to love: “I don’t mind how much it costs”. The advice that he will or should receive after the government amendments become law is that there is a risk that the courts might decide to stop the litigation if it is regarded as abusive. “But”, the litigant says, correctly, “It will surely still be a lengthy and expensive process before a court even gets to consider that option”. However, if the Government were to accept my amendment, then the advice he should receive is that he risks criminal prosecution if he, without reasonable excuse, threatens litigation with the intent to suppress the publication of any information likely to be relevant to the investigation of an economic crime. This potential offence gives room for a defence, of course, but its very existence should act as a considerable deterrent against the sort of behaviour we want to stop. If this amendment becomes law then the hypothetical client might think much more carefully before threatening or embarking upon abusive litigation.

This amendment is particularly relevant to journalists, who have a huge role in tackling economic crime. I declare my interest as chair of the Independent Press Standards Organisation. It is also of importance to anyone who wants to reveal economic crime. It is entirely consistent with the aims of the Bill. Let us bear in mind that the opportunity to legislate in this space is unlikely to present itself again, or at least not for some time. I beg to move.

My Lords, I remind your Lordships that, at Second Reading of this Bill, on 8 February, I referred to a legal action brought by Yevgeny Prigozhin, founder of the Wagner Group, who has been somewhat in the news over the last weekend, against the journalist Eliot Higgins, who had investigated his activities. When his case was justly struck out last May, Prigozhin said that he brought court cases against journalists because

“in any issue there should be room for sport”.

The cost to Mr Higgins was in the region of £70,000, although he won his case. That is the sort of abuse of the English legal system that the current crop of so-called reputational lawyers have brought on behalf of Russian oligarchs and many other large co-operations that resent too close a look into their operations.

My Lords, I start by sincerely thanking the noble and learned Lord, Lord Bellamy, and his team for meeting me and others to discuss SLAPPs and for the subsequent correspondence with me on areas of concern that remain, to some of which I will return briefly in a few moments.

As noble Lords will know, I have been rather tenacious in arguing for the inclusion of provisions against SLAPPs in the Bill, so I welcome government Amendments 102 and 103 before us today. They reflect positive listening by the Government, in particular the new Lord Chancellor, to a long campaign by Members of both Houses, as well as a coalition of non-governmental organisations. The amendments do not deliver everywhere —Scotland is excluded, I believe—nor do they cover everything that I and others have been seeking. I shall put these, as succinctly as I can, on the record.

My main concern, because it goes to the heart of SLAPP tactics, is the lack of sufficient provision in Amendment 102 for the courts to bring matters to a halt pending a decision on striking out under subsection (1) of the new clause inserted by the amendment. In his letter to me on this point, the Minister characterised such an approach as unfair and restrictive on the court, but as others have said, those using SLAPPs will do all they can to run up the costs of their opponent, not as a route to justice but as a tool of harassment. For example, in relation to new subsection (1)(b) in the amendment, deliberate pursuance of disclosure pending resolution of an anti-SLAPP motion can easily ratchet up costs.

To be effective in assessing cases and in preventing SLAPPs, to which Amendment 102 is directed, the court should be inclined to call a halt to the litigation process until it is decided whether the case should be struck out. I therefore ask the Minister whether he agrees that the courts, guided by the Civil Procedure Rules, should as a default position take the approach of putting a stop on proceedings pending a decision on striking out and allowing processes to proceed only where a very compelling reason exists for them to do so.

On Amendment 103, subsection (1)(d) of the new clause inserted by the amendment refers to harassment, expense and other harms which are

“beyond that ordinarily encountered in the course of properly conducted litigation”.

It is exactly the use of so-called “properly conducted litigation” that SLAPPers weaponise in order to intimidate their victims. While some amount of emotional and financial cost is inevitable in court proceedings, I do not accept that harassment should ever be part of properly conducted litigation. The phrasing of the amendment appears to suggest that it is acceptable. This creates a significant opportunity for the SLAPPer’s legal team to claim its harassment tactics are just part of the machismo and cut and thrust of legal process and, perhaps, as if a bit of harassment never really hurt anyone. That is the bully’s excuse.

It also leaves the courts struggling to make a subjective judgment about what is in the minds of the claimant and the defendant. In his helpful letter to me, the Minister stated that the courts are well versed in deciding such matters. However, I remind the House, as I elaborated at some length in Committee, that courts have always been very shy of inferring intention, and I am not aware of any instance where a court has struck out a case for improper purpose.

Even the recent case involving Charlotte Leslie and Mr Amersi was thrown out pursuant to CPR part 3.4 —namely, that the statement of case disclosed no reasonable grounds for bringing the claim. The court judgment was explicit that the court was not making a decision on whether the case constituted an abuse of process. The most the court judgment was willing to say was that there were several aspects of Amersi’s behaviour which gave “real cause for concern” that it was brought with an improper purpose. That illustrates how high a hurdle the test for improper purpose currently is.

The courts’ hands need to be strengthened here. Unless we enable the courts more effectively to label an action as an abuse of process, the current shyness about ever striking out a case on those grounds seems set to continue. I therefore ask the Government to reconsider my suggestion, which I have written to the Minister about, that the phrase about “properly conducted litigation” is removed and that the court, in considering the claimant’s behaviour, should decide if it could be reasonably understood as

“intended to cause the defendant … harassment”,

et cetera.

I have two other brief points. I understand that the intention of subsection (3) of the new clause inserted by Amendment 103 is to draw a wide definition of economic crime. However, in practice, it puts a potentially costly burden on the defendant to show that it is a SLAPP, and to require a subjective, and perhaps lengthy, assessment of intent by the court. Above all, it seems redundant, because subsection (1)(d) already establishes whether a case is a SLAPP. I therefore hope that the Minister will consider a revised drafting in order to encompass the purpose of having a wide definition of economic crime while not creating a new area of difficulty for the defendant.

Finally, subsection (4) of the new clause inserted by Amendment 103 covers factors for the court to take into account. It misses a typical SLAPP intimidatory tactic of bringing an action against individuals as well as their publishers. An example of the latter is the case brought in the UK against Swedish investigative journalists by a Swedish business. By bringing the claim in the UK, the claimant was able to sue not only the publication and its editor but the journalists as individuals. This would not have been possible in Sweden where, tellingly, the claimant decided not to sue. Individuals do not typically have legal insurance, and bringing individual action in this way is a classic intimidatory tactic. I therefore urge the Minister to include this as a factor for the court to take into account under subsection (4).

In conclusion, like the song by Messrs Jagger and Richards says,

“You can’t always get what you want

But if you try sometime …

You get what you need”,

these amendments give us a good chunk of what we need. By highlighting SLAPPs as unacceptable, they will make lawyers think harder about engaging in SLAPP tactics, as the noble Lord, Lord Faulks, highlighted. It is a great start, but there is more to do, as I and others have tried to outline today. I hope that these points will yet be reconsidered, either in the other place or in the wider legislation on this subject that the Government have promised. I look forward to the Minister’s response.

My Lords, I too declare an interest as a member of the Bar who has, over the past several decades, specialised in defamation.

I agree with quite a lot of what the noble Lord, Lord Cromwell, has just said in that, first, this is in essence economically driven; and that, secondly, the decision in Amersi v Leslie and others did not designate that particular claim as a SLAPP. None the less, there was plenty in the judgment of Mr Justice Nicklin to demonstrate that the judge was quite acute about the motivation behind the claim. Essentially, it was a claim that he considered to be bullying and designed to cause the defendants the most financial embarrassment possible; he saw through that.

My Lords, I am pleased to hear my noble and learned friend say that he has changed his position since we met in Grand Committee because I recall that, during those debates, he was strong in his view and mildly critical of those of us who had brought forward amendments.

I have two amendments in this group, Amendments 125H and 125J. I will speak to them but, before I do, I join my noble and learned friend Lord Garnier in welcoming the amendments tabled by my noble and learned friend the Minister. I am very pleased to see them; they go a long way to addressing the concerns that my committee—I declare my interest as chairman of the Communications and Digital Select Committee—has raised in our hearings on this topic over the past 12 months. As has been acknowledged, those amendments are confined to economic crime but that is because this is a Bill about economic crime, so I am happy to accept them as far as they go.

None the less, I want to highlight something that my amendments, the same amendments that I tabled in Committee, refer to—the power of deterrence with regard to the solicitors who represent those who bring forward these forms of legal action. I listened very carefully to my noble friend Lord Faulks introducing his amendment. Unlike my noble and learned friend Lord Garnier, I find his arguments quite compelling, but at this point I am pleased with what we have here. The importance of deterrence and the link between the Solicitors Regulation Authority’s new fining powers, the tactics employed by those who bring SLAPPs and the new dismissal mechanism are where I want to focus my comments.

As we have heard, the Government’s amendments bring much-needed legal clarity about the definition of a SLAPP case. The new strike-out clause includes a likelihood test but not a requirement for the case to be shown to have merit. That is a bit of a gap. It suggests that well-to-do law firms could still threaten journalists with a defamation case that has no merit and force the journalist to deal with huge legal costs. As we have already heard, as long as the lawyers toe the line and are not too aggressive in their tactics, they are unlikely to be thrown out under the early dismissal mechanism, but just because a case is not thrown out at the start, that does not mean everything is fine.

Most SLAPP cases never make it to a court, as we have heard. They succeed by intimidating critics into dropping their investigation at a very early stage. In these circumstances, the early dismissal test will not even come into play. One of the best defences probably lies with the solicitors’ regulator. The SRA needs to have confidence that these amendments tabled by my noble and learned friend the Minister will give it a sufficiently robust basis to penalise solicitors and law firms that pursue SLAPPs.

I understand that the SRA has powers to take action against individuals and law firms for misconduct or failing to comply with the rules. I would be grateful for clarification from my noble and learned friend the Minister that the SRA’s new unlimited fining powers, which are already in the Bill, could definitely be used to deter and punish law firms facilitating SLAPP cases, even if the case is not thrown out by the early dismissal test or does not make it to court. Let us not forget that the lawyers are making huge amounts of money from this. They know exactly what they are doing and can be very clever about getting away with it. We need confidence and assurances that the regulator will be able to take robust enforcement action, as we in Parliament need to be able to set a clear expectation of the regulators that they will be proactive in asking people to come forward with concerns, process complaints speedily and investigate high-risk firms to put them on notice.

Above all, the SRA needs to enforce the spirit of the law, not just the letter, by demonstrating zero tolerance for those profiting from flagrant abuses of our legal system. From my noble and learned friend the Minister, I am looking for clarity at the Dispatch Box that the fining powers that the SRA now has in the Bill and this new definition of SLAPPs empower it to act against law firms if it considers it appropriate to do so because they have breached its codes and so on. We are not looking for a situation in which it is possible for the SRA not to do what is properly expected of it just because it has not been spelled out in words of one syllable in the Bill.

In my view, it is really important for any regulator or regulated sector to understand that the members of it and those who are regulating it have a responsibility to uphold the reputation of that sector. That is done by the way in which they conduct their business. It is important that that is made very clear if the Government bring forward this definition of SLAPPs, as they have, to try to prevent further use of this aggressive and abusive form of legal action, which is doing so much to undermine the Government’s overall intention to reduce economic crime.

My Lords, I am grateful to the Minister and I welcome the amendment he has put forward. I want to make three quick points.

First, it is clear that the will of the House is that something should be done quickly. The remedy should be speedy, inexpensive and flexible. This leads to my second point. The right course is to allow the rule committee to develop this, but the rules must be flexible and must allow for the development to be made judicially, rather than prescribed in rules. That, in my experience, has generally been the way forward; we have tried this in relation to other matters and know that it is impossible to lay down too many detailed things in rules. Thirdly, I hope that the Government will make available the necessary resources to the judiciary, so that this can be dealt with by a High Court or other senior judge. Speed, effectiveness and determination will show whether this is a means that will work or whether we will have to resort to that which was suggested by the first amendment that was debated.

My Lords, I add the thanks of our side to Ministers and their teams for the access that they have given us.

I will not say much more; we have had a full discussion and response to the concerns that were raised at Second Reading and in Committee. I believe that we are in a much better place than we were, as has been outlined by many of these contributions.

I have a few points to highlight. I honestly believe that providing the courts with powers to strike out SLAPPs would be a huge, ground-breaking step forward. We have to regard what is before us as a positive start. It is also positive that a robust threshold test has been introduced and that the profile of the defendant is not prescribed, which enables it to be used by anyone—journalists, whistleblowers, activists and academics—as we have heard.

We have to acknowledge the problems that other noble Lords have highlighted around the definition of what constitutes a SLAPP and where we will achieve that clarity. The proof will come as we move ahead, but I agree that we need to make sure of this in the rules and know when they will be available for us to consider. Perhaps the Minister can respond to this.

I want to press the Minister on an answer to when the Government expect to extend the use of protections against SLAPPs beyond the definition of economic crime as outlined. That would be very helpful for us all.

In conclusion, while limited, this is a promising framework. As I have said, the Government have committed to expanding the scope, and we all ask for this to be done speedily. I do not want to get into competing quotations from famous rock stars, but there are several we could follow. I hope that

“watch out, you might get what you’re after”,

from Talking Heads, is not one of them.

My Lords, I am very grateful to the House and to all noble Lords who have spoken in today’s debate and in earlier debates. If I may say so, I think we have collectively changed our minds, or developed our thoughts, in various respects as a result of a collective effort, for which the Government are grateful. I am particularly grateful to those noble Lords who have engaged outside the Chamber: the noble Lords, Lord Faulks, Lord Ponsonby and Lord Cromwell, the noble and learned Lord, Lord Thomas, the noble Baroness, Lady Stowell, and others, have all contributed most constructively to the debate. There is clearly a great deal of strength of feeling on the issue of SLAPPs. It is therefore with some optimism that I hope the amendments I am about to move formally will be accepted: Amendments 102, 103, 137, 141, 142 and 143.

I will first make a general remark. In civil litigation generally, parties are not necessarily evenly matched. One may have more private resources than the other; one may be legally aided while the other is not. That is a fact of life, but one relies on the rules of procedure and the good sense of the judge to see fair play, bearing also in mind the inherent power of the court to strike out a claim for abuse of process. But when we come to SLAPPS—short for strategic litigation against public participation, a rather unwieldy phrase—two additional factors come into play. This is probably common ground in this House. In addition to the possible imbalance of power between the parties, the two additional factors are, first, the right to free speech, which is essentially what this legislation protects, and secondly the public interest in full and frank disclosure of wrongdoing.

Effectively, to use the courts or the threat of litigation as a means of preventing free speech and possibly covering up wrongdoing is a particular kind of abuse of process. It may well be that the power to control such behaviour already exists under the inherent direct jurisdiction of the courts—as I think my noble and learned friend Lord Garnier may have observed earlier—but the Government wish to put that issue beyond doubt and to put a stop to SLAPP-type tactics. We cannot allow the misuse of our legal system to suppress public interest investigations and reports. On the other hand, we have to safeguard access to justice in the measures that we take, so there is a balance to be struck here. The Government respectfully suggest that this Bill finds that balance.

I will first take the definition of SLAPPs. What is a SLAPP claim? It has a number of components. First, it will be one where the complainant has acted, or intended to act, to restrain the defendant’s exercise of their right to freedom of speech. The defendant will typically be a journalist. Secondly, the exercise of that right is a matter relating to economic crime—this is necessarily limited at the moment to economic crime because of the scope of the Bill—and for a purpose related to the pursuit of the public interest in combating such economic crime. Lastly, the claimant will have misused the litigation to cause harm to the defendant, in the circumstances defined in the clause.

For such SLAPP claims there will be several protections. First, there is the early dismissal test. The claimant will have to establish that they are more likely than not to succeed at trial. Normally, if you try to strike something out, it is you who has to establish that, but if it is a SLAPP claim, the burden is reversed and the claimant must establish that they are more likely than not to succeed at trial. That is an important change in the onus.

Secondly, there is the costs protection of the defendant, who will not have to pay the costs, even if there is eventually an adverse outcome at trial. On pre-litigation tactics, raised on a number of occasions by the noble and learned Lord, Lord Thomas, and others—it is a very fair point—in the Government’s view the costs protection and the reversal of the burden of proof very largely draw the sting of those threats. The journalist can sit back and say, “Well, do your worst. I’m protected on costs and by the change of the onus”, so the teeth are drawn from the attempt to suppress the publication of wrongdoing.

In addition—I will come to this in a moment—there are the powers of the Solicitors Regulation Authority to pursue the solicitors through its disciplinary procedures. With those protections, there is a very substantial assault by this legislation on SLAPPs. The Government’s view is that the courts will have the necessary tools and guidance from Parliament to deal with SLAPP lawsuits aimed at stifling freedom of speech and preventing journalists exposing economic crime.

As to the points rightly raised by the noble Lord, Lord Cromwell, that we should have gone further and so forth, the Government’s view is that we can always improve the shining hour—of course we can—but here we have, to use the words of the noble Lord, a good chunk of what is necessary. The Government’s view is that, at the moment, these provisions go far enough. As far as Scotland is concerned, discussions are continuing with our Scottish counterparts—it is a separate legal jurisdiction—and the same is true in Northern Ireland, so those matters will be pursued in due course. But the Government ask the House to accept that the provisions of this Bill as framed cut the mustard, if I may use the expression.

Of course, SLAPPs are broader than just economic crime. In answer to the question of the noble Baroness, Lady Blake, and others, the Government will come forward with completing the jigsaw as soon as a suitable legislative vehicle appears. At the moment, we are engaged in what, in another context, is called horizon scanning, to see when we can find a legislative vehicle that will do the job. This is not something the Government are going to forget about, and nor would this House allow us to do so. As soon as we can do it, we will get on to it.

It is entirely true that we now need the Civil Procedure Rules to back this up. The Civil Procedure Rule Committee will no doubt proceed as fast as it can; it is well-versed in ensuring that there are appropriate rules to make sure that legislation can have its proper effect in the courts. I have no control over the timetable of the Civil Procedure Rule Committee, but the message from this House is to get on with this as fast as we can. Indeed, if I may quickly refer to the comments of the noble and learned Lord, Lord Thomas, of course we need, as he suggests, quick, cheap and flexible procedures. One would hope that those will be developed judicially by senior judges, and that this legislation will have the desired effect. The Government have every confidence in the ability of the courts to put into effect what is the clear will of Parliament.

I turn to Amendment 94, in the name of the noble Lord, Lord Faulks. With regret, the Government, although sympathetic to the amendment’s objectives, do not feel that it would be right to criminalise access to justice in the way proposed. As the noble and learned Lord, Lord Garnier, pointed out, we have got rid of criminal libel. We have a balance to strike here. It would be very strong to say that it is, or is potentially, a criminal offence to commence proceedings in the courts. The courts have to be open. In the Government’s view, the balance to be struck here is civil, not criminal. Creating a criminal offence with such a broad application to tackle what is, in essence, a civil matter would be inappropriate. We do not have the evidence to support such a development. It would be entirely inappropriate to create a criminal offence that would not be very clearly defined and would potentially prevent access to justice—apart from, of course, establishing the criminal instead of the civil standard, which we are essentially dealing with here.

The creation of a criminal offence would go far beyond the Government’s measures and, I think, would mark a departure from other jurisdictions, to which some reference has been made. I might be wrong, but I do not know of one that has made this kind of activity a criminal offence. In the light of those comments, I invite the noble Lord to withdraw the amendment.

Amendments 125H and 125J were tabled by my noble friend Lady Stowell. I thank her again for her constructive engagement on the Bill. These amendments seek to allow the Solicitors Regulation Authority to set its own fining limit for cases of professional misconduct relating to abusive litigation brought forward to suppress reporting on economic crime.

Clause 195 removes the statutory limit on the level of financial penalty that the Law Society, which delegates the matter to the SRA, may impose, and a similar provision applies to the Scottish Solicitors’ Discipline Tribunal. The intention that my noble friend expresses is shared by the Bill, but the Government’s view is that the current drafting of these clauses, which already captures disciplinary matters relating to economic crime, covers the matters to which my noble friend referred. If the SRA can demonstrate that an abusive litigation case breached a rule specifically for economic crime or

“purposes relating to the prevention or detection of economic crime”,

that should permit it to use its new fining powers, so my noble friend’s amendments are, in the Government’s view, unnecessary.

I assure my noble friend that the Government’s intention is that this measure allows the SRA to impose fines above £25,000 against solicitors and law firms that fail to comply with the rule by taking part in or facilitating abusive litigation, whether or not such cases reach court or are struck out, provided that the SRA can establish a link between this type of misconduct and the prevention or detection of economic crime. This legislation is directed not just to cases that come to court but to pre-action threats and actions to deal with attempts to intimidate.

My Lords, the Minister quite rightly emphasised that these amendments are concerned with two fundamental points: free speech and the public interest that exists to expose wrongdoing. He also said that the power, to be further elaborated by the rules, already exists. He is absolutely right to do so. In a way, the government amendments, which I welcome, tell the courts to do what they already can do. The question is whether they go far enough.

I have already indicated that I see a great deal of litigation potential in the definition of what SLAPPs may or may not be, notwithstanding the drafting. The Minister said that, with the comfort of these new rules, editors will be able to say to their journalists, “Well, we can go ahead. Sit back and do your worst”. I wonder how realistic that is, given that a journalist seeking after truth and attempting to expose wrongdoing will nevertheless expose him, her or their journal to a considerable hurdle before there is any chance of a striking out taking place. We hope the rules will come into effect in due course to encourage courts to take that view, but my experience, sadly, is that courts are reluctant to strike out claims on the basis that it is very difficult, without evidence, to come to a conclusion that something is an abusive process.

However, I accept that, for the moment, the view is taken that this amendment to create a criminal offence goes too far. I am afraid I do not accept the characterisation that it would “criminalise access to justice”; that was a most unfortunate phrase. In fact, it would create an offence that would help prevent the suppression of the publication of any information likely to be relevant to the investigation of economic crime. That is not criminalising access to justice; that was a most unfortunate characterisation.

However, I accept that the Government are with the spirit of the debate entered into in various stages on the Bill, and that they want to encourage the courts to intervene where necessary. I accept that, although it has expressed real concern, the House does not, for the moment, want to go as far as my amendment suggests. With some reluctance, but accepting the will of the Front Benches and of the Minister, I beg leave to withdraw my amendment.

I tabled all the amendments in this group. I am very grateful to those who have added their names to them: the noble Lords, Lord Verdirame, Lord Pannick and Lord Anderson of Ipswich. I am also very grateful to the Minister, the noble and learned Lord, Lord Bellamy, for meeting me and senior representatives of the Law Society and of the Bar Council to discuss what is now Clause 197.

All these amendments relate to the new regulatory objective in Clause 197 that amends the Legal Services Act 2007 by inserting for the Legal Services Board a new objective:

“promoting the prevention and detection of economic crime”.

As I said in Committee, this proposed new regulatory objective is extraordinarily wide and imprecise. The meaning of the word “promoting” lacks any clarity or certainty. It raises legitimate concerns about a potential lack of proportionality and overregulation by regulators, and about a lack of evidential risk as to those sectors most likely to come into contact with economic crime—for example, advisers rather than advocates. And even in the area of advisers, it is hardly likely to involve experts in the environment or town planning.

As the MoJ’s impact assessment of the new regulatory objective makes clear, the front-line regulators of the legal profession are already implicitly under a duty to ensure that lawyers are not breaching economic crime rules. The provisions in Clause 197 are merely to make explicit what is already implicit, and it is important that the Legal Services Board and the front-line regulators understand that this is the case.

The definition of economic crime for the purposes of Clause 197 is provided in Clause 187(1) by mean of cross-reference to Schedule 10, which contains a long list of statutes. This provides no focus on what is really at issue and should be the concern of regulators. That is spelled out clearly in my Amendment 95—namely,

“the offences of fraud, false accounting, money laundering or offences under any binding sanctions regime, whether at common law or in primary or secondary legislation”.

This lack of focus could well promote overregulation and a lack of proportionality.

What is needed is a clear statement from the Minister, which I would very much welcome today, on the following. First, regulators must understand that this is not a new regulatory duty but one that states explicitly what is already implicit. Secondly, there should be a focus on the particular criminal activity which is relevant: fraud, false accounting, money laundering and offences under any binding sanctions regime. Thirdly, there is a need for evidence-based regulation according to evidence of risk in particular areas of work and practice, as I described, such as transactional work rather than contentious and court-based work, and areas of advisory work which might be relevant in which economic crime might well occur. Fourthly, there will also be a need for proportionality by regulators. Fifthly, the regulators must understand, as the Minister said before, that there is to be no interference with the principle of legal professional privilege. Finally, there is a need for consultation with the profession to ensure that the new objective successfully tackles economic crime in the proportionate and evidence-based way I have described.

I hope the Minister will be able to make those points clear to the profession to enable a proper regulatory framework to work. I beg to move.

I thank the noble and learned Lord, Lord Etherton, for his engagement on this topic throughout the Bill and for his remarks today. I briefly reiterate that the definition of economic crime is deliberately widely drawn. It applies not only to the regulatory objective but to several other clauses of the Bill, including the information-sharing measures between various financial institutions at Clauses 182 and 183. The Government do not believe that restricting that definition would be right.

It is true that there is a long list of offences in Schedule 10, including the reference to theft. Sometimes it is difficult to distinguish between fraud and theft, but I am happy to acknowledge that typical forms of theft, including low-level theft such as shoplifting or street crime or similar activities, are most unlikely to be relevant to anything in the Bill. Therefore, the Government do not feel able to change the definition of economic crime specifically for the legal sector, and the regulators must be able to respond to circumstances as they develop.

I shall address in a little more detail some of the points raised by the noble and learned Lord, Lord Etherton, this afternoon. I hope to cover all those points one way or another. First, in relation to legal professional privilege, the regulatory objective already requires adherence to professional principles under the Legal Services Act. In the Government’s view, there is no need for a specific reference to legal professional privilege, but I can make it absolutely clear that the Government do not consider that the Bill makes any difference to the principle of legal professional privilege. It is in no way an assault or attack on that fundamental principle of English law. The protection of legal professional privilege, as developed in the courts, will continue to apply in this area, as in many other areas. That is the Government’s position, and I hope that it is clear

As to how the regulatory objective and the provisions of the Bill will operate in practice, and in response to the noble and learned Lord, Lord Etherton, who made various entirely fair points, the intention and purpose of the regulatory objective is to put the onus on legal services regulators to be active in promoting and upholding adherence to the economic crime regime. The new objective will put beyond doubt and clarify that securing compliance is explicitly part of the regulatory role. We expect regulators to use all the tools available to them, but their activity should be appropriately targeted and not in any sense just a box-ticking exercise. The objective does not directly place new duties on lawyers. It is directed to the legal services regulators, and existing safeguards remain.

All those regulators will still be bound by public law principles, which will ensure that any regulation of legal services is proportionate and fair. Proportionality is particularly important. Section 3 of the Legal Services Act already requires the Legal Services Board to have regard to the principle that regulatory activity should be transparent, accountable, proportionate, consistent and targeted only for cases where action is required. The new regulatory objective on economic crime fits within this framework and existing objectives, such as supporting the rule of law, promoting the public interest and improving access to justice.

It is understood and expected that the Legal Services Board will work closely with the professions in developing guidance to support the new objective. This will include a public consultation on any necessary policy statement or guidance to ensure that the regulatory objective is implemented in a targeted and proportionate way. This will allow the LSB to capture and analyse any concerns that professional bodies or others may have, or continue to have, in relation to the new objective.

I am extremely grateful to the Minister for all those assurances. They are extremely helpful, and I do think that they will assist in settling the concerns of many of those in the legal profession. On the basis of the assurances that he has given, I am very happy to indicate that I will withdraw my amendment.

My Lords, corporate criminal liability is a topic that many across the House care deeply about—

Not yet.

Sorry. I beg to move Amendment 96 formally.

My Lords, my apologies again for my early start on this; my enthusiasm keeps getting the better of me today.

As I was saying, corporate criminal liability is a topic that many across the House care deeply about, and one where the Government are committed to making significant reforms. I thank noble Lords for the robust and constructive debate we had in Committee on this topic and for the ongoing engagement which many noble Lords have afforded me in the weeks leading up to this debate.

I reiterate the Government’s commitment to reforming corporate criminal liability and tackling fraud. Since this Bill was introduced, significant steps forward have been taken. I hope, with the further government amendments to which I will speak shortly, noble Lords will recognise that we have gone to great lengths to strengthen the Bill in this area. In addition, government action continues outside of this Bill. The recently published Fraud Strategy further demonstrates the ongoing work across government and with partners to take action to tackle fraud.

I will speak first to government Amendments 104, 105, 106, 109, 138, 139, 140, 144 and 145, which introduce new clauses to this Bill to reform the identification doctrine. As noble Lords will be aware, the identification doctrine is outdated and ineffective in the way in which it holds corporates to account, given the breadth of business we see in the 21st century. Companies have grown tenfold since the “directing mind and will” test was devised in the 1970s. As companies have grown, their operations and governance have become spread across different areas, making it incredibly difficult to pinpoint the directing mind of a company, particularly in a large organisation. Individuals with significant authority can escape corporate liability by asserting that the directing mind and will is elsewhere.

Meanwhile, there is an unfairness here. Smaller companies, perhaps with one or two directors, have much more easily identifiable directing minds, meaning that corporate liability is more easily attributable and a prosecution is more likely to be successful. It is this inequality in the law that we need to address. The government amendments place the identification doctrine on a statutory footing for economic crimes for the first time, providing legislative certainty that senior managers are within the scope of the rule.

Under these new measures a corporate will be held liable if a senior manager has committed an offence under the new schedule, or if they have encouraged or assisted an offence by another, or have attempted or conspired to commit an offence under the schedule. The corporate will be criminally prosecuted and, if convicted, will receive a fine, in addition to any sentences imposed for individuals who are separately prosecuted and found guilty of the same offence. The reform will apply to all corporate bodies and partnerships established in England and Wales, Scotland and Northern Ireland.

These amendments build on the extensive work and consultation conducted by the Law Commission in this area. Building on feedback from prosecuting bodies, business representatives and Members of both Houses, some tweaks have been made to the Law Commission’s proposal to ensure the reform is applicable to the widest set of cases. Under the Government’s reform, economic crime is defined according to a new schedule in the Bill—introduced via Amendment 109—which reflects existing Schedule 10 but without those offences that principally apply to a corporate body, such as failure to prevent bribery.

For the purpose of these amendments, “senior management” will be defined in accordance with the well-established definition provided for in the Corporate Manslaughter and Corporate Homicide Act 2007. This model considered the senior managers’ roles and responsibilities within the relevant organisation and the level of managerial influence they might exert, rather than their job title.

The clauses tabled by the Government also seek to capture instances where a senior manager commissions or encourages a lower-ranking employee to do their “dirty work” by making it clear that the corporate can also be held liable where the senior manager encourages or assists a listed offence in the schedule.

To be clear to the House, subsection (3) of the new clause introduced by Amendment 104 ensures that criminal liability will not attach to an organisation based and operating overseas for conduct carried out wholly overseas simply because the senior manager concerned was subject to the UK’s extraterritorial jurisdiction; for instance, because that manager is a British citizen. Domestic law does not generally apply to conduct carried out wholly overseas unless the offence has some connection with the UK. This is an important matter of international legal comity.

However, some offences, wherever they are committed, can be prosecuted against individuals or organisations who have certain close connections to the UK. Subsection (3) makes sure that any such test will still apply to organisations when the new identification doctrine applies. Extending the identification doctrine test to senior management better reflects how decision-making is often dispersed across multiple controlling minds, mitigating the ability to artificially transfer, remove or create titles to escape liability. This is a positive step to increasing lines of clear governance and accountability in corporations.

Looking forward, although these government amendments are a strong step to improving corporate criminal liability laws, they are not the final step. The Government have committed in the Economic Crime Plan 2 and the Fraud Strategy to introduce reform of the identification doctrine to apply to all criminal offences. This will take place when a suitable legislative vehicle arises.

I move on now to the government amendments on failure to prevent fraud. In Committee, the Government tabled amendments which introduced a new corporate offence of failure to prevent fraud. Under the new failure to prevent offence, a large organisation will be liable to prosecution where fraud was committed by an employee for the organisation’s benefit and the organisation did not have reasonable fraud prevention procedures in place. The new offence will help to protect victims and cut crime by driving a culture change towards improved fraud prevention procedures in organisations and by holding organisations to account through prosecutions if they profit from the fraudulent actions of their employees.

Following this, noble Lords have raised further points with me on where the Government clauses could be strengthened. I have listened to the points raised, and the Government have tabled further amendments on the definition of large organisations and the treatment of subsidiaries. I thank the noble Lord, Lord Vaux of Harrowden, for bringing this point to my attention.

As I have set out on many occasions, the failure to prevent fraud offence is designed to balance the fraud prevention benefits with minimising burdens on small business. Amendments 111, 112, 113, 114, 115, 116, 118, 119, 122, 123 and 124 will help prevent companies from avoiding responsibility by moving high-risk operations into subsidiaries that fall below the size threshold for the offence. They will also ensure that groups of companies with significant resources are incentivised to take steps to prevent fraud.

First, we have made a clarification to ensure that an assessment of whether an organisation meets the size criteria, and is therefore in scope of the offence, is made cumulatively across the parent company and its subsidiaries—that is, the group—rather than being based on each individual entity. We then have to consider where liability would attach within that group. The group itself is not a legal entity so cannot be liable. It may be more appropriate for the subsidiary or the parent to be accountable directly, depending on the circumstances. We have therefore clarified that whichever of the individual entities within a group was responsible for the fraud can be directly liable for a failure to prevent fraud, in the same way as any other entity in scope of the offence.

Additionally, we have clarified that an employee of a subsidiary can be an associated person of its parent or owning company. That makes it more feasible to attach liability to the parent company should the approach of targeting the specific subsidiary be inappropriate. A test would still have to be met that the fraud by the subsidiary employee intended to benefit the parent, and the parent would have the defence that it was reasonable to take no steps to prevent the fraud—for example, if the structure was such that the parent had no say over the activities of the subsidiary.

Finally, Amendment 120 ensures that the views of the Scottish and Northern Ireland Governments are taken into account before any future changes to the offence threshold based on organisation size.

I hope noble Lords will recognise that this is a hugely meaningful package of amendments. I recognise that a number of noble Lords will have hoped the Government would go further, particularly around the threshold in the failure to prevent fraud offence. However, I stress that we have already taken tremendous strides forward. The Government firmly believe that our reforms to the identification doctrine; the introduction of a failure to prevent fraud offence covering around 50% of economic activity; measures to prevent avoidance via subsidiaries; and our existing ability to identify and prosecute fraud more easily in smaller organisations will cumulatively have the desired effect of tackling and deterring economic crime, without unnecessarily imposing billions of pounds of burdens and bureaucracy on actual or potential small businesses. I hope noble Lords can recognise the great progress we have made, and I beg to move.

My Lords, I thank my noble friend the Minister for his opening remarks and for the advance that the Government have made on two fronts. The first is by clarifying the senior management officers within a company; in doing so, they have clarified the way in which the identification doctrine can be applied in modern Britain.

As I have said on previous occasions, I have an interest to declare. I will not specifically recite it again because I did so in Committee, at Second Reading and, I think, on the three or four previous pieces of legislation into which a failure to prevent amendment could have been inserted—but of course it was not the right Bill, the right vehicle or the right time, and in fact it was just not right. So here I am again.

I shall speak to my Amendments 110 and 125A, which at the appropriate time I will move to a Division unless the Government persuade me otherwise. I am not engaging here in party politics or even in a rebellion. I am doing nothing by surprise; anyone who has followed discussions on economic crime over the last 13 years will know precisely what I am going to say. Indeed, my noble friend the Minister is adept at moving from one corridor to the next to avoid having a yet further conversation with me about my favourite subject. He has also heard all my jokes before, but not every Member of our House has had that advantage so it may be that, unless the Government accept my amendment, my little Aunt Sally will have another canter around the course. However, I will take things in stages.

First, I thank the Government, as I hope I have done —and I mean it sincerely—for their Amendments 104 to 106 and 109—essentially, the modernisation of the identification principle, so far as it goes. We are now slowly catching up with the Americans; they did something similar to this in 1912, but this is the United Kingdom and we must not rush.

My Lords, I will briefly add my support to the amendments proposed by the noble and learned Lord, Lord Garnier, which try to strengthen the failure to prevent clauses the Government have proposed. I welcome those clauses and the changes the Government have added at this stage. In particular, I strongly support Amendment 110, to which I have added my name, which removes the restriction of this offence to large companies.

Let us be clear what this failure to prevent offence deals with. It does not cover, for example, the use of a company’s services by fraudsters, something I greatly regret. I am sure that—along with, I hope, the noble Baroness, Lady Morgan—we will come back to this in another Bill. It actually applies only to situations where somebody associated with the company, such as an employee, commits a fraud that is intended to benefit the company. Let me emphasise that: it applies only to frauds carried out by associates such as employees or agents, and only where those frauds are effectively committed on behalf of the company. It is pretty restricted.

When I was in business, frankly, it never occurred to me that such situations were not already caught by the law. Surely, it must be a fundamental principle that a company should take reasonable steps to prevent its employees committing fraud on its behalf. But the Government seem to take a different view. Having been dragged somewhat reluctantly into putting forward their own amendments to create this offence of failure to prevent, they have decided it should apply only to larger companies. As we have heard, they have set the threshold so that less than 1% will be covered.

The argument, as we have heard, is that the cost would be disproportionate. The Government have come up with some costings to support this. I am afraid I do not think I am the only person who simply does not find those costings credible. Any reputable company should, and I believe generally will, be doing this already. There are some things we should ensure that companies do anyway. A good example is that companies must ensure that health and safety rules are followed. It is not an excuse to say, “It wasn’t me; an employee caused the accident”. Nor is it an excuse to say, “My company is too small to follow health and safety rules”. We do not give small companies an exemption from health and safety, tax evasion or bribery legislation. Why would we do so, uniquely, for fraud—committed on the company’s behalf?

If the Government are genuinely worried about the cost, they can deal with that easily enough by issuing timely guidance that sets out what steps would be reasonable and the circumstances in which no additional procedures would be required, which is likely to be the case for most small enterprises. Amendment 125D makes some sensible suggestions in that regard.

My Lords, my noble and learned friend Lord Garnier wonders why the noble Baroness, Lady Bennett of Manor Castle, supports his amendment. I have heard wags tell me that he is referred to as a Green Peer, on account of the number of times he recycles his gags. That might be a little unfair—I hear disapproval, but never mind.

I will speak to these amendments, having followed the Bill extremely closely. The noble Lord, Lord Vaux of Harrowden, is of course right to pinpoint what we are debating: fraud perpetrated to benefit a relevant body. However, the noble Lord actually said “on the company’s behalf”, and that is not right. I do not think it is necessarily to capture exclusively where a company seeks to benefit itself; it could also, quite rightly, seek to capture an employee who commits fraud to benefit himself or herself because of a bonus arrangement or other matters. So it is not just on a company’s behalf.

In Grand Committee and elsewhere, I have argued that there should be exemptions for small and medium-sized companies, in opposition to Amendment 110. I totally agree with my noble and learned friend Lord Garnier that the numbers proposed by the Government—any two of the following: a turnover of £36 million; a balance sheet of £18 million, which is undefined; and 250 employees, which is easy to define—are not appropriate. As he said, they capture only 0.5% of companies, but of course they capture the most important companies, which is where this legislation is perhaps intended to attack—it covers pretty much every FTSE and AIM company, which would perhaps have someone to put their mind to undertaking a fraud.

Although I have reservations about Amendment 110, curiously enough I support my noble and learned friend Lord Garnier’s Amendment 117, which is eminently sensible and deals with the issue. He has specified a turnover of more than £10 million, a balance sheet of more than £3 million, and more than 25 employees, which is sensible and fair. However, that applies only to fraud. His Amendment 125D does not have any SME exemption but simply says that the Secretary of State must issue guidance specifically for SMEs and particular micro-enterprises. He recognises that there is a difference for SMEs and micro-enterprises, and I think we should do so. I am nervous about this legislation: we just do not know what that regulation might be and do not understand what the guidance might be, how it might work and what effect it will have on SMEs and micro-enterprises.

I had a micro-enterprise at one point; I started a business. I refer your Lordships to the register of interests, which discloses that the business grew quite substantially, but it was originally micro by any definition. I do not know how many of your Lordships have started and run a micro-business, where everything revolves around survival and one’s entire life revolves around next week’s and next month’s wages, paying suppliers and creditors, and dealing with HMRC. There are so many pressures on micro-businesses, growing through to SME businesses, and we should think very carefully about putting another hurdle in place, however small, that makes an entrepreneur say, “You know what? Maybe I won’t bother. The Government are saying that I’ve got to take care about failure to prevent fraud. Really? Is that something I should worry about at this micro level? Have I not got enough to do to try to survive?”

I urge caution in adopting Amendment 110. If it is passed, I urge the House to adopt Amendment 117. I would be very careful about adopting Amendment 125 without clarification of exactly what will be in Amendment 125B.

My Lords, I will speak briefly to this group. I thank my noble friend the Minister for the steps that the Government have taken in relation to the failure to prevent fraud offence and the identification doctrine. These are significant steps, and he is right to say that they will obviously be followed up in future Bills.

It is worth remembering the scale of fraud in England and Wales in particular. Some 40% of crime is fraud against individuals, and clearly the scale of the cases against small, medium-sized and large businesses is also devastating. On Friday, we will debate the wider issues relating to fraud looked at by the committee on digital fraud, which I was privileged to chair. I am grateful that, from that committee and the work with my noble friend, the Fraud Strategy was published in early May.

I support my noble and learned friend Lord Garnier’s Amendment 110 and the associated Amendment 121, and have added my name to them. He and the noble Lord, Lord Vaux, set out clearly why these amendments are necessary. There is no SME exemption in the Bribery Act or in relation to tax evasion.

I want to take on one of the points raised by my noble friend Lord Leigh. He talked about the survival of SMEs, and he is of course right to do so. I have not set up a small business but I have set up a small charity, and many of the issues are similar. If that small business or small charity were the victim of fraud, it would be absolutely devastating. One of the arguments here is the burden on small businesses of having to set up fraud-prevention measures, but they have to do it anyway these days because they have to be very cautious about anyone attempting invoice fraud or utility fraud. If they have an employee, they have to make sure that they are making best use and correct use of the corporate credit card, for example.

Noble Lords rightly referred to Clause 192 and the guidance that the Government will publish. We already have an example of it, as the Government have published the outline of how it would look. If this amendment is passed, it would be perfectly within the rights of the Government to set out clearly how that guidance should be interpreted by small and medium-sized enterprises, which are quite used to reading extensive amounts of guidance. If we want to have a broader debate about red tape and regulation, that is perhaps for another day, but they are used to dealing with much guidance. If they are likely to be victims of fraud, they will take that guidance very seriously.

I support these amendments and I support my noble and learned friend’s Amendment 125A on expanding the failure to prevent offence to money laundering. If we are going to introduce the failure to prevent offence, which I thoroughly welcome, we might as well do it properly and expand it to money laundering, which is also a huge a problem and one that the Bill seeks to tackle as well.

My Lords, my name is on several amendments relating to failure to prevent fraud, and I support what has been said already and what was said extensively in Grand Committee on both failure to prevent fraud and the identification doctrine. If the noble and learned Lord, Lord Garnier, moves his Amendments 110 and 125A, we on these Benches will support them.

I retabled my amendment on regulatory failure to prevent, which was well supported in Committee. I do not intend to move it but I have tabled it as a reminder that we have not yet covered the enablers, as the noble Lord, Lord Vaux, spoke about. This is probably the best route to do so, with regulators being perhaps best able to understand where actions could or could not have been taken. This recommendation was encompassed within the Fraud Act report.

We have, I suppose, gone a long way, and the Government have gone a long way within the remit covered by the Law Commission, which unfortunately included the harm aspect. As a lot of the crime that has come about through this enabling channel has been since that report was commissioned, this is unfinished business; we will necessarily have to come to this again. For now, we should strengthen the government proposals through Amendments 110 and 125A.

My Lords, I start by acknowledging the great progress that has been made on the failure to prevent process through the debates in the House of Commons. There was significant movement there, which we of course welcome.

I say at the outset that if the noble and learned Lord, Lord Garnier, is minded to divide the House on Amendments 110 and 125A, he will have the support of these Benches. There are very good reasons for that, as have been outlined in the debate today. The statistics, particularly the 0.5% figure, are startling. Surely, we all need to take this incredibly seriously if, as the noble Baroness, Lady Morgan, said, we are serious about tackling the wider fraud issues, which seem to be growing daily. The numbers of people we all know personally who are affected by this shows the sheer extent of the problem.

I will make the very strong point that the issue of costs and burdens on SMEs has been overemphasised. If these processes are tightened in the way proposed, those very businesses will themselves be protected by the action taken on other companies. In particular, I completely support the extension to the money laundering provision in Amendment 125A.

We have had a really good debate throughout our proceedings on these measures. It would be so disappointing if, at this final stage, we did not go the full distance we can at this point, recognising, as we know, that more will need to be done in the future. We have the opportunity now and we should seize it.

My Lords, I thank all noble Lords for their contributions to today’s debate on corporate criminal liability and for their continued engagement on this subject. These conversations have been robust and constructive and have helped the Government immensely in the development of the clauses —developed, I say to the noble Lord, Lord Vaux, without any reluctance at all.

I turn to Amendments 135 and 125G on senior manager liability, tabled by my noble and learned friend Lord Garnier. As he has noted, senior managers hold a higher level of responsibility than ordinary employees in conducting business because they take important decisions on the corporate policy, strategy and operation of the company. The extension of the identification doctrine to senior management in Amendment 104, which I spoke to previously, recognises this. To reflect the heightened responsibility of a senior manager in the actions of a corporation, powers are available already to prosecutors to hold a senior manager liable where a company conducts an economic crime offence.

Under the fraud, theft and bribery Acts and the money laundering regulations 2017, senior officers, including managers, are liable if they consent to or connive in fraud, theft, bribery or money laundering regulatory breaches. This extends as far as the senior manager knowingly turning a blind eye to offending, extending beyond the usual law on accessory liability for other crimes. If a senior manager is guilty of the offence and liable, they can be proceeded against and punished accordingly, including by imprisonment.

Additionally, in the regulatory space, the senior managers and certification regime is in place to improve good corporate behaviour and compliance in the sectors regulated by the Financial Conduct Authority and Prudential Regulation Authority, placing specific requirements on senior managers to encourage positive corporate behaviour.