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House of Commons Hansard
General Committees
20 July 2020

Delegated Legislation Committee

Draft Alternative Dispute Resolution for Consumer Disputes (Extension of Time Limits for Legal Proceedings) (Amendment etc.) (EU Exit) Regulations 2020

The Committee consisted of the following Members:

Chair: Dr Rupa Huq

† Anderson, Lee (Ashfield) (Con)

† Atherton, Sarah (Wrexham) (Con)

† Benton, Scott (Blackpool South) (Con)

Coyle, Neil (Bermondsey and Old Southwark) (Lab)

† Gideon, Jo (Stoke-on-Trent Central) (Con)

† Green, Chris (Bolton West) (Con)

† Higginbotham, Antony (Burnley) (Con)

† Onwurah, Chi (Newcastle upon Tyne Central) (Lab)

† Randall, Tom (Gedling) (Con)

† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

Stringer, Graham (Blackley and Broughton) (Lab)

† Sunderland, James (Bracknell) (Con)

Tarry, Sam (Ilford South) (Lab)

Thompson, Owen (Midlothian) (SNP)

† Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)

Twigg, Derek (Halton) (Lab)

† Twist, Liz (Blaydon) (Lab)

Anwen Rees, Committee Clerk

† attended the Committee

First Delegated Legislation Committee

Monday 20 July 2020

[Dr Rupa Huq in the Chair]

Draft Alternative Dispute Resolution for Consumer Disputes (Extension of Time Limits for Legal Proceedings) (Amendment etc.) (EU Exit) Regulations 2020

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It is my first time as Chair, so be nice to me! Before we begin, I would like to remind hon. Members about social distancing. I think everyone is sitting in the right place, where there is a tick. Spaces are clearly marked. If you are going to make a speech, please send it to to speed things up with them.

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I beg to move,

That the Committee has considered the draft Alternative Dispute Resolution for Customer Disputes (Extension of Time Limits for Legal Proceedings) (Amendment etc.) (EU Exit) Regulations 2020.

It is an absolute pleasure to serve under your first of many chairmanships, Dr Huq.

The draft regulations were laid before the House on 29 June, and form part of the programme of work to update our legislative framework in readiness for the end of the transition period. We want a relationship with the European Union that is based on friendly co-operation between sovereign equals and centred on free trade. We will have a relationship with our European friends inspired by our shared history and values, and it is important to ensure that retained EU legislation continues to work effectively in the UK immediately after the transition period.

We have a strong framework of consumer rights in this country, which gives most consumers the confidence to settle any disputes directly with businesses—and they do; around six in 10 disputes are resolved directly with the business. However, we know that when resolution is not achievable directly, many consumers would prefer a way other than court action to settle their differences with businesses.

Alternative dispute resolution, known as ADR, helps consumers to resolve complaints with traders by providing a confidential and objective method for tackling disputes without going to court. More than 2.5 million disputes have been resolved through ADR in the past six years. Research by the Department for Business, Energy and Industrial Strategy found that 80% of consumers who used ADR thought that their problem would not have been resolved without it. The draft regulations we are considering today have no impact on the provision or quality of ADR, nor do they alter substantive consumer rights and protections available to UK residents more generally.

This statutory instrument will ensure that ADR continues to work as intended after the end of the transition period, in a context in which the EU’s ADR directive no longer applies to the UK. It amends four pieces of legislation that implement the EU ADR directive. Those four pieces of legislation extend the time limit for bringing court proceedings when a consumer is engaged in non-binding ADR. Those extensions of the time limit allow the ADR procedure to conclude and, if it has not been successful, give the parties an eight-week grace period to commence court proceedings thereafter. That ensures that the parties are not prevented from initiating judicial proceedings where the court time limit expires during or just after the ADR procedure.

The extensions will continue to apply, but, as a result of the draft regulations we are debating today, they will apply only where the consumer is resident in the UK and the ADR provider is approved under the UK’s ADR regulations. Provided those conditions are met, time limits will continue to be extended for consumers resident in the UK whether the trader is based in the UK or the EU, as is the case now.

The changes reflect those that have already been made to section 140AA of the Equality Act 2010, which also implements the ADR directive, via a separate instrument, the Equality (Amendment and Revocation) (EU Exit) Regulations 2019, which has already been approved by this House. The draft regulations before this Committee are designed to ensure that a consistent approach is taken across the statute book to all rules on extensions of time limits deriving from the ADR directive.

Most disputes involving UK consumers will not be affected by the draft regulations, which do not otherwise affect the ability of any consumer, whether resident in the UK or EU, to apply to the UK courts or to use ADR. Furthermore, the transitional provisions ensure that, where consumers have begun ADR proceedings before these draft regulations come into force, any extensions entailed will be unaffected.

As part of that process, officials from the Department have undertaken the appropriate assessment of the impacts of this instrument. That shows that there is likely to be a negligible impact on business, because the amendments do not bring about a wider policy change or impose any new liabilities or obligations on any relevant businesses, organisations or persons.

In conclusion, this instrument is a sensible and necessary use of the powers of the European Union (Withdrawal) Act 2018, which will ensure that the law in this area continues to function effectively after the transition period. I commend the draft regulations to the Committee.

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I start by offering my unequivocal support to the Minister in welcoming the opportunity to serve under your chairship, Dr Huq; it is a real pleasure. [Hon. Members: “Hear, hear.”] I hope the debate will be conducted with the same level of mutual support, although I am not sure about that.

Over 40 years of membership of the European Union, the UK has shared responsibility to protect the UK’s consumer rights with EU member states. An extensive body of law has grown up, with more than 90 European directives applying across the single market. The reciprocal rights enshrined in those directives enable UK consumers to seek redress for any poor service they receive anywhere in the EU. Indeed, the UK played a central role in negotiating many of those directives alongside the European Commission, including the alternative dispute resolution directive to which today’s regulations refer.

The ADR directive has made a valuable contribution to consumer confidence across the EU single market by reducing impediments to, and improving cross- border engagement with ADR organisations. The directive has helped UK consumers to avoid some of the more challenging issues about jurisdiction and applicable laws related to ADR that often arose before the directive came into play. That has saved UK citizens and businesses many hours of complex and costly court proceedings. In particular, the time extension provisions—the subject of today’s statutory instrument—have ensured that UK and EU consumers can enter into ADR processes in good faith, without fear of strict time limits to bring a case to court elapsing in the meantime.

We can therefore see that much of the EU’s consumer protection laws and UK national laws are interwoven in a complex and interconnected way. That harmonisation between our domestic and European law has provided us with the comprehensive protection UK consumers need to purchase goods and services with confidence, which has in turn bolstered trade across the single market, including here in the UK. While the Government’s withdrawal Act attempts to mirror in UK law the individual consumer rights that operate within the EU, it cannot guarantee the protection of UK consumers’ rights when they visit the EU27 after the transition period, nor can the UK Government assure UK consumers of continued access to the shared network of agencies, mechanisms and infrastructure that polices, secures, develops and underpins consumer confidence across the EU single market.

In short, the harmonised reciprocity of consumer protections we have enjoyed as members of the EU will come to an abrupt end once we leave the transition period, yet the Government are not clear about what comes next. We know that talks with the EU have been stalling, and as we move closer to the end of the transition period, it looks increasingly unlikely that the Government will be able to negotiate a post-Brexit relationship that continues to protect consumers’ rights for UK residents in the same way. That added uncertainty comes on top of the business interruption and drop in consumer confidence that we have seen as a result of covid-19.

Labour is concerned that without reciprocal obligations to investigate breaches of consumer law and progress with necessary enforcement actions between the UK and the EU, the Government will leave UK consumers unable to seek redress from EU-based traders in UK courts when things go wrong. There is every chance that divergence between UK and EU consumer law will become even more pronounced over time without proper oversight from the Government, which would have a significant impact on consumers and businesses and burden cross-border transactions and recourse processes with unnecessary red tape.

With the possibility of a no-deal Brexit and an economy hit by covid-19, Labour calls on the Government to take a more proactive approach to protecting UK consumers by agreeing mutual recognition rules, underpinned by a standard equivalence principle, as a matter of urgency. The Government may say that they want high regulatory standards and robust domestic market surveillance after the transition period, but they have slashed funding to frontline trading standards services by more than 50% in just over seven years. That has led to potentially dangerous counterfeit cigarettes and unsafe toys and electrical products entering our homes. The UK’s largest market surveillance authority and regulatory service, the Chartered Trading Standards Institute, recently said:

“Much has been made of maintaining the UK’s post-Brexit standards of regulation, but rules without resources for application, advice and enforcement are rendered ineffective and detrimental to the UK economy.”

The regulations remove all reference to the ADR directive from four pieces of EU-derived legislation. Of course, Labour accepts that it is a broadly technical instrument designed to ensure that EU law does not apply after the transition period has come to an end, but it excludes two key groups of people from the ADR-related time-limited extension: first, EU-based consumers buying goods and services in the UK and, secondly, UK-based consumers buying goods and services in the EU. It will ultimately mean that UK consumers are protected by the time-limited extensions only when working through ADR organisations. Will the Government seek to address that and ensure that all consumers are protected in the UK?

The Government estimate that the changes will affect about 131 ADR cases per year that are five years old or older, but it is not clear how those figures have been arrived at or what the total value of those cases might be. Can the Minister take this opportunity to show how the figures have been calculated? Can he outline clearly the Government’s plans to protect UK consumers when making purchases of goods and services in the EU, and vice versa, if the statutory instrument comes into force?

Labour has noted, and is grateful for, the European Statutory Instruments Committee’s intervention on the grounds that the diminution of rights to the time limit that the Government are proposing is significant, alongside the fact that the legislation being amended is mostly primary legislation. That Committee deemed it appropriate to upgrade the instrument to an affirmative resolution, and a debate will take place in Parliament after the recess.

Labour has always strongly supported giving consumers and businesses every opportunity they need to reach mutually beneficial dispute settlements. Mediation and conciliatory processes supported by third-party ADR organisations are informal, flexible, low-cost and user-friendly compared with court proceedings. The Government must make sure that UK consumers and businesses have an equally straightforward route to ADR and that any such access comes with similar provisions to ensure that parties are not caught out by time limits when entering into them in good faith.

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I thank the Committee for its consideration of the draft regulations, and I thank the hon. Member for Newcastle upon Tyne Central—I did promise to celebrate Newcastle, in the spirit of collaboration—for her valuable contribution to the debate. To be clear, nothing in the regulations changes which sectors are covered by ADR or the obligations on businesses to engage with consumers. They are limited in their scope to short-term extensions of the time limits for court proceedings where necessary, to give the parties the opportunity to resolve their differences through non-binding ADR.

The hon. Lady asked about the few cases that the regulations affect. That is when cases are getting up to the time limitation—typically six years—so that involves the lengthiest cases, if something has not been resolved by that point. Although it is estimated that 2.5 million cases have been resolved by ADR over the past six years, there are very few at the end period. Most disputes will not be affected by the regulations, and the transitional provisions have ensured that any extensions that have already taken place will also be unaffected by this SI. It avoids inconsistency in the statute books.

Essentially, the hon. Lady asked a few questions about what would happen with EU citizens, UK businesses working abroad and EU companies. UK law still applies to services targeted at UK consumers and UK businesses, so they would have the UK statute book to help protect them within that remit. Without the introduction of the SI, UK legislation would continue to provide EU consumers with flexibility in relation to the extension of court time limits, but it is not clear at this stage whether UK consumers would retain that benefit in member states.

Yes, we want to ensure that we can work through reasonable co-operation with the EU—as sovereign equals, as I said—because we have no intention of lowering standards. The political declaration sets out the parties’ ambitions to work together to safeguard high standards of consumer protection, but our high standards are not dependent on EU membership. The UK has often led or gone beyond the minimum requirements set out by EU consumer law. For example, in 2015, the UK brought digital content within the scope of consumer rights for the first time. We are seeking an agreement with the EU that is like those the EU has struck with other friendly countries, such as Canada. Effective co-operation on consumer protection will be an important part of the UK’s future relationship, and it is in the interests of all parties in that regard. We are examining ways to continue and enhance global co-operation on consumer protection, and the Competition and Markets Authority will continue to take an active role in international forums.

The hon. Lady asked about enforcing consumer rights. I have talked about the fact that UK consumer rights are stronger than those in many other EU countries, and compliance with the law is considered high. Some 84% of consumers think traders respect their rights—the joint-highest rate in the EU—and 79% of traders think their competitors comply with consumer law, which is the highest rate in the EU. We have excellent consumer advice organisations, such as Citizens Advice and Resolver, which can guide consumers in pursuing a complaint and provide data that reveal patterns of behaviour that might require a public enforcement response. That suggests that, for the majority of consumers, the current framework works well most of the time. I must say it is important that we continue to strengthen our consumer rights, and we do not take that lightly at all.

I come back to the fact that current domestic consumer protections relating to ADR will remain the same. The European Union (Withdrawal) Act maintains provisions on ADR that derive from the EU directive. The draft regulations ensure that the consumer rights framework continues to function effectively once the EU ADR directive ceases to apply to the UK. I hope the Committee will approve the SI.

Question put and agreed to.

Committee rose.

Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) Regulations 2020

The Committee consisted of the following Members:

Chair: †Julie Elliott

† Ansell, Caroline (Eastbourne) (Con)

† Bradley, Ben (Mansfield) (Con)

Brennan, Kevin (Cardiff West) (Lab)

Byrne, Liam (Birmingham, Hodge Hill) (Lab)

† Cartlidge, James (South Suffolk) (Con)

Champion, Sarah (Rotherham) (Lab)

† Crosbie, Virginia (Ynys Môn) (Con)

Davies, Geraint (Swansea West) (Lab/Co-op)

† Grundy, James (Leigh) (Con)

† Holden, Mr Richard (North West Durham) (Con)

† Hollinrake, Kevin (Thirsk and Malton) (Con)

† Largan, Robert (High Peak) (Con)

† Madders, Justin (Ellesmere Port and Neston) (Lab)

† Throup, Maggie (Lord Commissioner of Her Majesty's Treasury)

† Western, Matt (Warwick and Leamington) (Lab)

† Whately, Helen (Minister for Care)

Whittome, Nadia (Nottingham East) (Lab)

Liam Laurence Smyth, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee

Monday 20 July 2020

[Julie Elliott in the Chair]

Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) Regulations 2020

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Before we begin, I re-emphasise that we must stick to the social distancing markers on the desks, so that we are all safe. I am happy for Members to take off their jackets on this warm afternoon. If Members speak, they may email their notes to, rather than handing them over physically.

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I beg to move,

That the Committee has considered the Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) Regulations 2020 (S.I., 2020, No.719).

It is a pleasure to serve under your chairmanship, Ms Elliott.

The regulations were made by the Secretary of State for Health and Social Care on 9 July and came into force on 11 and 13 July. I thank the House for being so flexible in scheduling this debate to allow for timely parliamentary scrutiny. I note that, because of that flexibility, we are debating this statutory instrument before it has been formally cleared by the Joint Committee on Statutory Instruments.

Thanks to an immense national effort to slow the spread of the virus, we have been able to restore some of the freedoms that are cherished by us all. The regulations made on 3 July allow us to do that. They were debated on 16 July, and they committed several sectors to reopen, including hospitality and leisure. They also require some businesses to remain closed, owing to increased transmission risk from covid. However, we continue to ease remaining restrictions as the Government work with the relevant sectors to develop covid-safe practices.

As set out in the Health Secretary’s statement to the House on 16 July, we are moving from blanket national measures to targeted local measures, supported by our NHS test and trace system. Those measures may be implemented on a small scale, such as relating to an individual farm or a factory, but when needed, we may also act on a broader basis, as we did in Leicester. To allow that shift from national to local action, we have provided local authorities with new powers to enable those authorities to put in place local restrictions on individual premises, organised events and access to defined outdoor public spaces under the regulations that came into effect on Saturday. That includes the ability to require premises, events or public spaces to close.

The amendments we are debating allow outdoor facilities at water parks and outdoor swimming pools to reopen from 11 July, and allow the following close-contact services to open from 13 July: nail bars, tanning booths and salons, massage parlours, tattoo parlours, body and skin piercing services, and spas and beauty salons. Guidance has been published for those sectors, outlining how they may open safely. For example, they set out that face treatments should not be offered, although those will be allowed from 1 August, and that indoor pools and gyms within a spa should not open.

Along with the changes to regulations, guidance has been issued on how organised outdoor grassroots team sports and participation events may begin again, and how outdoor performances with an audience may take place. This is an important milestone for our performing artists, who have been waiting patiently in the wings since March.

As the Committee is aware, we have announced plans for future changes. The Secretary of State for Digital, Culture, Media and Sport announced that we plan for fitness and dance studios, indoor gyms and sports venue facilities, and indoor swimming pools and water parks to be able to open from 25 July. People will be able to get back to their gyms, indoor swimming pools and leisure centres, and to jump on a spin bike or treadmill for the first time in months.

In addition, the Prime Minister set out that from 1 August, subject to prevalence remaining around or below current levels, we will reopen most remaining leisure settings, namely bowling, skating rinks and casinos, provided they follow covid-secure guidance; enable all close-contact services to resume, including treatments on the face, such as eyebrow threading and make-up applications; restart indoor performances to a live audience, subject to the success of pilots; pilot larger gatherings in venues with a range of sizes of crowds, including in sports stadiums and business events, with a view to a wider reopening later in the autumn; allow exhibition halls and conference centres to reopen; allow small wedding receptions of no more than 30 people; give employers more discretion on how they ensure that employees may work safely; and confirm that the clinically extremely vulnerable will no longer need to follow the advice on shielding. Those are all positive developments.

We continue to follow the science when making those changes so that we ensure that any remaining measures are both proportionate and necessary. That is why some businesses will still need to remain closed from 1 August. They are nightclubs, dancehalls, discotheques and other similar venues; sexual entertainment venues and hostess bars; and indoor play areas, including soft play areas. Those venues are unable to open at this time as they pose an increased risk of transmission, but we continue to work with those sectors to develop and agree safe ways for them to reopen.

As a nation we have made huge strides in getting the virus, which has brought grief to so many, under control. These regulations will help us to keep the virus cornered and to enjoy the summer safely. I am grateful to all parliamentarians for their valuable scrutiny and I commend the regulations to the Committee.

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It is a pleasure to see you in the Chair, Ms Elliott, and I wish you success in your first outing chairing a Committee. I thank the Minister for her introductory remarks.

I would like to start by noting a few facts and figures. This statutory instrument amends the Health Protection (Coronavirus Restrictions) (No. 2) for the first time. This is the second time the Minister and I have debated lockdown restrictions, although this is the fifth such debate taking place. I must apologise to the Minister in advance, because the concerns I raised on the last occasion will be repeated today, although I will be a little briefer.

It is just four days since we were here to debate the previous set of regulations following their coming into force on 4 July. We are here today to debate amendments to those regulations, which were laid on 10 July and came into force on 11 and 13 July. This will be the fifth occasion on which I am forced to highlight the unsatisfactory approach to parliamentary scrutiny of the regulations, which was at least acknowledged by the Minister last week and again today. It is still the case, however, that we continue to debate regulations after they come into effect.

I would not be so churlish as not to acknowledge that some progress has been made, as today’s debate comes only one week after the regulations came into effect, which is the shortest gap we have managed so far, but once again they have been superseded by events on Friday, when the Prime Minister announced sweeping changes to the regulations, with indoor gyms, pools and other sports facilities to reopen. In addition, the Government advice on going to work is changing from 1 August, along with the reopening of most remaining leisure settings and live indoor theatre settings.

To return to the regulations before us and the fact that we are debating them after the event, I have made it clear on numerous occasions that we accept that the initial regulations had to be hurriedly introduced in response to the rising number of infections. However, the House has now been running for more than two months and Members on both sides, and in the other place, have expressed concern about time not being provided to ensure future changes are debated before they are made. For me, it is evident that the Government are running out of excuses as to why they have failed to ensure that that happens.

As I said last Thursday, parliamentary scrutiny is not something that can be ditched because the timing is inconvenient, especially for regulations such as these, which have huge ramifications. These issues are too important not to be debated and given timely and full parliamentary scrutiny. Last Thursday, I made a plea to the Minister, and I will do so again: we need to find a better way of ensuring that these regulations are debated in a timely manner.

For example, take the set of regulations that were announced last Friday. The Government must have known that the instrument was going to be laid the next day, so surely some time could have been pencilled in this week to debate the regulations before the recess. The regulations contain a new raft of powers for local authorities to tackle local outbreaks, which is to be welcomed, but those important changes will now not be debated until September at the earliest. Without debate, we are unable to ascertain what support will be available to local authorities to utilise those powers. It is important that they have the powers, but they are being asked to exercise them without any guarantee that they will be financially recompensed for that work. What about the impact on people and businesses affected by a new local lockdown? It would have been helpful to have that debate before the recess so that the Minister could have put on record the answer to those questions so that people knew exactly where they stand.

The Committee will be relieved to hear that that is the last I am going to say about the timing of the debates, but our concern is on the record. We have also made it clear, in previous debates, that it is not acceptable for us to debate the regulations without the full extent of the information on which the Government have based their decisions. I reiterate that position again today.

I have previously asked the Minister why the legally required reviews of 16 April, 7 and 28 May and 25 June have not been published. I have not as yet had a satisfactory answer, so I ask that question again today. The Secondary Legislation Scrutiny Committee has also called on the Government to ensure that that information is provided. Without those reviews, we are not in a position to judge the impact of previous regulations; and when it comes to the current regulations, all that has been published alongside them is an explanatory note telling us that no consultation has been carried out and no regulatory impact assessment has been undertaken.

The key question that we have to ask is whether these regulations will increase the spread of the virus. The answer appears to be that they may do, but the Opposition are in no position to judge the extent of that risk. The explanatory memorandum does tell us—at paragraph 7.4 —as it did with the previous regulations, that there is

“recognition that these changes may lead to an increase in transmission rates”

and that that

“will continue to be kept under review.”

Of course, we would expect all the regulations to be kept under review, but we do need some more meat on that bone.

Last week, on the previous set of regulations, I pressed the Minister on whether she was able to provide us with clarity about which measures, individually or collectively, were considered likely to lead to an increase in transmission rates, and she was not able to answer that. This is important not just for hon. Members when considering the legislation before us, but for public confidence in the Government’s handling of the pandemic, particularly when we hear conflicting views on what the advice is.

For example, last Thursday, the Government’s chief scientific adviser, Sir Patrick Vallance, told Members that there was “absolutely no reason” to change the Government’s current guidance on working from home, but on Friday, the very next day, the Prime Minister announced that the guidance on working from home would be changed. Conflicting advice and statements from the Government only hinder our fight against the virus. Clear communication is vital in combating the spread of covid-19.

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My hon. Friend is making valuable points, as always. To be fair to the Government and to give them credit, when this crisis, the pandemic, started, the Government gave very clear messaging, and they are to be applauded for that. But over recent weeks—perhaps the last couple of months—it has become less clear and potentially more confused, and that is having a big impact on public confidence. Also, the businesses that the changes are designed to help cannot keep up with those changes. One seems to replace another, but it is not clear to those businesses where they are in the cycle.

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As my hon. Friend knows, I will always be fair to the Government. The point that he makes is correct: when we first entered lockdown, the messaging was clear. It was probably easier to make things clear at that point, because a clear and consistent message was being applied across the board. But when we first discussed version one of the regulations, I made the point that as we moved forward it would be really important to have a much more nuanced and clear message for the variations that we are having as a result of the changes. My hon. Friend has explained very well why we are not doing quite as well there as we would like.

In terms of clarity, it is really important that we hear from the Minister about the detail behind the statement on transmission. Is that based on advice from scientific advisers? How is the risk quantified? Which elements of the relaxation are considered more risky than others? What mitigating measures are recommended?

There are some clues in the explanatory memorandum about some of the scientific advice on the measures. For example, it tells us:

“The decision to enable the re-opening of”

outdoor settings where multiple households gather, such as

“outdoor swimming pools and waterparks…has been taken based on SPI-M’s”—

SPI-M is the Scientific Pandemic Influenza Group on Modelling—

“previous statement that permitting outdoor contact…while continuing to maintain a 2m distance, would have no more than a very small impact on overall transmission rates.”

That has been considered alongside

“evidence…that UV exposure can reduce the half-life of the virus and ventilation can reduce the risk of aerosol transmission.”

The explanatory memorandum also tells us:

“The decision taken to enable the reopening of close contact services on 13 July is based on an assessment that Covid-19 Secure mitigations mean that existing restrictions are no longer necessary.”

Therefore, we have a little more information than we have seen with previous regulations, but it does seem a little at odds with the statement that these regulations may lead to an increase in transmission rates and it does not replace the need for the reviews of the regulations to be published in full, alongside the full scientific evidence and a full impact assessment.

I mentioned last Thursday that the frequently asked questions on the Government website about what people can and cannot do had not been updated since 9 July, and I am pleased to note that they now have been updated, so at least someone on the Government Benches listens to our speeches.

I also think it is helpful for us to remain clear and consistent about the Government rules as they move forward, as has already been mentioned in an intervention by my hon. Friend the Member for Warwick and Leamington, particularly as changes are coming thick and fast in the next few weeks. I am sure that many hon. Members will recognise that our inboxes are still full of questions from constituents trying to navigate the constantly changing advice and guidance to keep them and their colleagues, employers, co-workers, friends and families safe. That is the barometer by which we measure the effectiveness of the Government’s communication strategy, and I think there is still some way to go.

Just this morning it has been reported that senior doctors are concerned about the Government’s mixed messages about face masks and returning to work. They warn that a second peak, if combined with a seasonal flu outbreak, could be devastating for the NHS. That highlights the challenge for us all in getting things right, and the importance of communicating changes clearly and consistently.

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To amplify that point, the Government are spending a lot of money. Even in my local paper, the Leamington Courier, there is a double-page spread placed by the Government, entitled “All in, all together.” It would be interesting to know how much money is being spent on public health messaging and why the opportunity is not being used to place adverts saying clearly what should happen about wearing a face mask, and where.

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That is a fair point. I have been looking with interest at the advertising in my local newspaper. Some of it goes over the line of what would be considered public information and what would be considered the expounding of Government policies, but it is a fair point that if the contract with local newspapers still has, as I think it does, some way to run, clear messaging on the use of face masks would be beneficial as things move forward.

The Opposition will not oppose the regulations, but we remain concerned that we are entering another critical moment without having available the full information on which decisions are being made, without a clear understanding of the risks, and with the test and trace system not working at full efficiency. The gradual easing of lockdowns has to be done in a safe and cautious way. It should be carefully planned and clearly communicated, so that the public can have confidence in the measures that the Government have put in place, and the advice that has been given.

We need full transparency so that we can have confidence that the Government’s scientific advisers support the measures we are debating. That means that we need to end the promises of world-beating systems and record numbers of tests, because we know that the current system for testing and tracing is not reaching all those with suspected covid-19. Of course the app is nowhere to be seen.

It should be of concern when the director of public health in an area such as Blackburn with Darwen, where officials are currently battling a rise in cases, tells us that only 44% of the 799 close contacts of someone with coronavirus have been successfully contacted by the test and trace call handlers. That figure is roughly in line with the contact rate for non-complex cases nationally and it is clearly well below the level that is needed if we are to be confident that the system is working effectively.

We want the Government to succeed, but where things need to improve—and we have touched on only a few of those areas today—we shall continue to challenge them. It is right to challenge the Government on their decisions, because it is our constitutional duty, but also because we cannot simply risk losing control of the situation again. Any challenge that we make today is hampered, because we debate the regulations after the event, having had little sight of the scientific advice on which they are based.

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It is a pleasure to debate the regulations with colleagues, including the hon. Member for Ellesmere Port and Neston. I appreciate the tone that he brings to these conversations. I shall respond to some of his points, before bringing my remarks to a conclusion.

I note the hon. Gentleman’s concerns about the process, and particularly its sequencing. However, I will say that I know he also appreciates the importance of our moving cautiously but also quickly to reduce the restrictions on people’s lives—restrictions that limit economic activity and people’s freedoms..

Secondly, the hon. Gentleman talked about the impact of local lockdowns through the demands they may place on local authorities and the impact on local businesses. The Government are mindful of both those things and are working closely with local authorities in places such as Leicester, where a local lockdown has been imposed. Both the Ministry of Housing, Communities and Local Government and the Treasury are also mindful of, and keep under review, what support may be required for local authorities and businesses in those areas that may be affected.

Thirdly, coming to the hon. Gentleman’s point about clarity of messaging and the concerns expressed by the hon. Member for Warwick and Leamington that things might be moving too fast for businesses, I will say that certainly businesses in my constituency that have lobbied me as a constituency MP have wanted things to move forward. For instance, I had conversations with the pub sector, which very much wanted to be able to reopen and welcomed when things moved as swiftly as possible on that.

Clearly, there is some balance to be struck between not wanting to issue too much guidance too quickly or change things too quickly and, when it is safe for businesses and activities to restart, moving quickly to enable that to happen, which is in the interests of those businesses and the general public.

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It was not so much the speed, but the sequencing of it, as my hon. Friend the Member for Ellesmere Port and Neston has said, and the consistency of some of the policies announced. That is why he has been trying to make those points over recent weeks. It is through a more open, collaborative approach, with scrutiny from all sides, that things such as the inconsistencies of barbers versus beauty salons would be addressed, and that would be in the best interests of businesses.

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I hear the hon. Gentleman’s point. To address the specific example he gave of barbers versus beauty salons, there were indeed some conversations with colleagues about that, including female colleagues who said, “Hold on, what’s going on here?” The fact is that we know there are additional risks in activities that involve close face-to-face contact for an extended period of time. That was the reason there was sequencing of the easing of restrictions from one to the other. There was a rationale behind those things.

Moving on, the hon. Member for Ellesmere Port and Neston brought up questions about wanting to have more access to the scientific guidance and the connection between that and transmission risks. It is absolutely clear that there is indeed some increased risk of transmission as people are able to do more things and are more likely to come into contact with each other. That is the reason why the reduction and easing of restrictions is a step-by-step and cautious process.

Therefore, all these decisions draw on the scientific advice about the risks involved. Overall, there is a cautious approach, because we know we must keep the transmission rates down. That goes hand in hand with careful monitoring across the country of what is happening in each local area so that, should we need to take local action, we are able to do so.

The hon. Gentleman mentioned the concern about whether there might be a second peak. I am acutely mindful of the challenges we will face come winter when, in addition to potentially having coronavirus around, we will also have the usual coughs and sneezes and flu, and it will be much harder to tell who might have what, along with people being less likely to be in well-ventilated areas. That is why there is extensive winter planning going on across health and social care to be ready for what comes our way, and also why it is essential that we have effective tracking and monitoring and the ongoing NHS test and trace system running, so that we can limit any onward transmission of the virus and keep it under control. That is essential.

In conclusion, I restate the Government’s commitment to working with Parliament on this. We appreciate that the restrictions have placed a significant strain on individuals. The Government will only continue to impose restrictions that are necessary to protect the public from the spread of coronavirus. We will only make changes when we are confident it is safe to do so, and we remain prepared to reimpose stricter measures should that become necessary. It is a pleasure to serve under your chairmanship, Ms Elliott, and I commend these regulations to the Committee.

Question put and agreed to.

Committee rose.

Insolvency Act 1986 Part A1 Moratorium (Eligibility of Private Registered Providers) Regulations 2020

The Committee consisted of the following Members:

Chair: Clive Efford

† Baker, Duncan (North Norfolk) (Con)

† Clark, Feryal (Enfield North) (Lab)

† Debbonaire, Thangam (Bristol West) (Lab)

† Docherty, Leo (Aldershot) (Con)

† Drummond, Mrs Flick (Meon Valley) (Con)

† Elmore, Chris (Ogmore) (Lab)

Evans, Chris (Islwyn) (Lab/Co-op)

† Fell, Simon (Barrow and Furness) (Con)

Fovargue, Yvonne (Makerfield) (Lab)

† Grady, Patrick (Glasgow North) (SNP)

† Gullis, Jonathan (Stoke-on-Trent North) (Con)

† Hall, Luke (Parliamentary Under-Secretary of State for Housing, Communities and Local Government)

† Hunt, Jane (Loughborough) (Con)

† Mumby-Croft, Holly (Scunthorpe) (Con)

Rees, Christina (Neath) (Lab/Co-op)

† Saxby, Selaine (North Devon) (Con)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

Laura-Jane Tiley, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee

Monday 20 July 2020

[Clive Efford in the Chair]

Insolvency Act 1986 Part A1 Moratorium (Eligibility of Private Registered Providers) Regulations 2020

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Before we begin, Members may remove their jackets, if they want to. Please stay as socially distanced as you are, if you can. That will be perfect.

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I beg to move,

That the Committee has considered the Insolvency Act 1986 Part A1 Moratorium (Eligibility of Private Registered Providers) Regulations 2020 (S.I. 2020, No. 652).

It is a pleasure to serve under your chairmanship, Mr Efford. Welcome to your first Committee as Chair. I look forward to serving under you today and in the future.

The regulations were laid before this House on 29 June 2020. The Corporate Insolvency and Governance Act 2020 introduced a range of measures, both permanent and temporary, to assist businesses. The Act gives companies the flexibility and breathing space that they need to continue trading during this difficult time.

The regulations relate to the moratorium provisions contained in the 2020 Act. The measure gives struggling businesses a breathing space in which to explore their rescue and restructuring options free from creditor action. During the moratorium, no legal action may be taken against a business without leave of the courts. The measure ensures that businesses that are struggling are given the opportunity to survive.

Private registered providers of social housing already have special arrangements for dealing with financial difficulties. Those arrangements are set out in the Housing and Regeneration Act 2008 and the Housing and Planning Act 2016. The regime includes a 28-day moratorium to allow a provider in difficulty, working with the regulator of social housing, to resolve its problems.

This statutory instrument disapplies the moratorium powers applied under the Corporate Insolvency and Governance Act for private registered providers, given that the separate housing moratorium already exists to support them should they get into financial difficulty. The arrangements we have in place, combined with the economic regulation of the sector by the regulator of social housing, make this new moratorium unnecessary, because specific moratorium proceedings are already operational for this sector.

A private registered provider in financial difficulty would have two potential routes to follow and, in turn, that could lead to two moratoriums operating alongside each other and possibly conflicting with one another. That might undermine the ability of the regulator of social housing to support a private registered provider facing financial difficulty, thereby limiting its ability to protect tenants. We seek to avoid that situation.

The housing association sector benefits from a no loss on default record, meaning that no lender has lost money because of a private registered provider failure. That is important because it allows private registered providers to borrow cheaply to build the homes that we need. Ultimately, that strong financial performance protects tenants, because their homes are not put at risk.

Financial problems are rare, but the housing association sector has changed significantly in recent years. The level of private finance has grown from £48 billion in 2012 to more than £100 billion in 2020. That is why it is vital for us to maintain a clear and robust regime to support private registered providers facing financial difficulties.

The insolvency arrangements that we have in place today reflect extensive engagement with the regulator of social housing, lenders, private registered providers and their representative bodies. The regulations will ensure that those arrangements remain unaffected by the new moratorium provisions.

The regulations extend to Great Britain, but their practical effect is on arrangements for private registered providers registered with the regulator of social housing in England. However, because we also want the exemption to cover stock held in England by private registered providers registered as legal entities in Scotland and Wales, the territorial application is wider. It is worth noting that no such organisation currently exists.

In conclusion, the regulations are important and necessary to maintain arrangements that allow the regulator of social housing effectively to support a private registered provider in financial difficulty. They ensure a clear regulatory framework that applies to a private registered provider in financial difficulty. That will continue to safeguard investment in social housing and to protect tenants. I commend the regulations to the Committee.

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It is a pleasure to serve under your chairmanship, Mr Efford. This is a first for us both; this is the first time I have been sat here rather than where my hon. Friend the Member for Ogmore is sat. Although I have whipped many a statutory instrument, I am sure that the Minister will be terribly disappointed to hear that I do not intend to disagree with him at all this afternoon. The Opposition have examined the statutory instrument carefully and have consulted colleagues in the social housing sector and in other teams, and we accept that the minor amendments are largely technical in nature and have been implemented to reduce conflict between potentially competing legislation.

As we understand it, the amendments will remove private registered providers of social housing from the Insolvency Act 1986, which would allow them to be covered by existing housing legislation instead. Private registered providers are subject to special rules about insolvency, including provision for a moratorium—I wondered what the plural of moratorium was, and I am still not completely sure—in sections 143A to 159 of the Housing and Regeneration Act 2008. Those provisions were substantially amended by the Housing Planning Act 2016, so this area has received recent legislative attention for private registered providers. From our understanding—I am sure the Minister will correct me if I am wrong—the statutory instrument seeks to ensure that, owing to the recent amendments to the 2016 Act, there is no conflicting legislation. There are lots of double negatives in this argument, aren’t there?

The 2008 Act provides a 28-day moratorium for private registered providers, while the amended Corporate Insolvency and Governance Act 2020 provides for 20 days. The instrument makes it clear that private registered providers have 28 days, not 20 days. The Opposition therefore have no immediate concerns or points that we would like to raise with the Minister.

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I thank the hon. Lady for her comments. She asked only one question, about the plural of moratorium, which I will categorically fail to answer. I welcome her constructive comments in her first SI Committee as shadow Minister rather than as a Whip.

The occasions on which this legislation will be necessary are rare. The disapplication of the moratorium that was introduced by the Corporate Insolvency and Governance Act 2020 means that there is only one moratorium available to private registered providers, avoiding the potential for two moratoriums being in play together. The moratorium from housing legislation ensures that the regulator has the tools it needs to maintain lender confidence as far as possible and to protect tenants should insolvency occur.

Question put and agreed to.

Committee rose.

Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2020

The Committee consisted of the following Members:

Chair: Sir Graham Brady

† Aiken, Nickie (Cities of London and Westminster) (Con)

† Amesbury, Mike (Weaver Vale) (Lab)

Benn, Hilary (Leeds Central) (Lab)

† Campbell, Sir Alan (Tynemouth) (Lab)

Cooper, Yvette (Normanton, Pontefract and Castleford) (Lab)

† Costa, Alberto (South Leicestershire) (Con)

Duffield, Rosie (Canterbury) (Lab)

Hopkins, Rachel (Luton South) (Lab)

† Hughes, Eddie (Walsall North) (Con)

† Jones, Fay (Brecon and Radnorshire) (Con)

† Levy, Ian (Blyth Valley) (Con)

Lloyd, Tony (Rochdale) (Lab)

† Mullan, Dr Kieran (Crewe and Nantwich) (Con)

† Pincher, Christopher (Minister for Housing)

† Richards, Nicola (West Bromwich East) (Con)

† Syms, Sir Robert (Poole) (Con)

† Wakeford, Christian (Bury South) (Con)

Dominic Stockbridge, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Monday 20 July 2020

[Sir Graham Brady in the Chair]

Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2020

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I beg to move,

That the Committee has considered the draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2020.

It is a pleasure to serve under your chairmanship, Sir Graham, although it is not such a pleasure to see the Government Whip sitting with the Opposition. I trust that social distancing does not extend as far as political distancing.

The regulations were laid in draft before the House on Monday 6 July. If approved and made, they will introduce a fee for a new permitted development right that allows detached purpose-built blocks of flats of three storeys or more to be extended upwards by two stories to provide new homes without making an application for planning permission. They will be subject instead to obtaining prior approval from the local planning authority. The regulations will come into force on 1 August.

As hon. Members are aware, the Government’s moral mission is to build the homes we need, and that is more critical than ever. It is fundamental to our economic recovery following the pandemic to get Britain building back better, faster and greener, and uniting and levelling up our entire country. To achieve that, we must make the most of land that has already been developed. That is what this new permitted development right does, creating new homes for sale and rent that would not otherwise exist. That will benefit families, young people and many others at the heart of established communities.

I turn to the draft regulations. The prior approval process means that, instead of going through a full planning application process, a developer must secure the prior approval of a local planning authority for specific planning elements of the development before work can proceed. That allows for a more streamlined planning process while maintaining local oversight of key planning matters. In relation to the new permitted development right, the number of additional considerations as well as consultation and scrutiny by local authorities is greater than for existing permitted developments’ prior approval applications but less than otherwise required on a full planning application.

That has resource implications for local authorities. It is therefore right that a higher fee should be paid compared with other prior approval applications but less than that for a full planning application. That is reflected in the regulations in the new part 20 of the Town and Country Planning (General Permitted Development) (England) Order 2015, which introduces a fee for applications for prior approval for such upward extensions of existing blocks of flats of £334 per dwelling house for development proposals of 50 or fewer new dwelling houses. For development proposals of more than 50 new dwelling houses, the fee is £16,525 plus an additional £100 for each dwelling house in excess of 50, subject to a maximum fee of £300,000.

The £334 fee represents a modest midway point between the £206 fee for an application for prior approval for the change of use of a building to residential and the fee for a full planning application of £462 per new dwelling house. As such, it strikes an important balance between accelerating the delivery of much-needed homes and ensuring that local authorities, which will be required to assess applications for prior approval for this new permitted development right, are paid for the service they provide. If there was no application fee, this cost would have to be funded by the taxpayer.

The approach that I have set out was welcomed in our consultation, “Planning Reform: Supporting the high street and increasing the delivery of new homes”, which was published in October 2018. The responses to it recognised that the proposed changes would require significant local planning authority resources and should therefore be subject to an appropriate fee. Planning fees are an important source of income for councils, as the basis of a well-resourced, effective and efficient planning system, underpinning housing delivery and economic growth.

In January 2018 the Government raised planning application fees by 20%, which was the first uplift since 2012. The increased income that generated for the planning system has driven up the performance of local planning authorities, which I believe we will all agree with.

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I do not disagree with what the Minister is saying; it may be a good idea. I presume there is guidance on how that will be dealt with. If a developer has a three-storey block of flats and wants to build over the top, would the practice be to move the residents out or to build over them, and what consultation would there be of the residents affected by the additional floors going above their property? That might be one of the key factors that the local authority and other people will be concerned about.

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I am obliged to my hon. Friend for his question. The individual leaseholder agreements with the freeholder will determine some of the issues that he has raised. Certainly, as part of prior approval it will be necessary for the local authority to consider such matters as the effect on leaseholders’ or residents’ amenity, so the prior approvals process will apply in that sense.

We are keen to keep up the momentum to help us, in the words of the Prime Minister, “Build, build, build” towards a brighter future, following an extraordinarily challenging period for our country. That is why we are considering wider reform of the planning system, with these draft regulations underlining our commitment to a system that is fit for the 21st century. I commend the regulations to the Committee.

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It is a pleasure to serve under your chairmanship, Sir Graham. Ultimately, we will not oppose the regulations, which introduce, as the Minister said, much needed fees for applications prior to approval on extending blocks of flats of three storeys or more upwards, to create new residential homes. However, I want to take a few minutes to outline why this does not mean that we support the Government’s extension to permitted development, to give it context.

The Minister will already have seen that I have put my name to a prayer, alongside the shadow Minister for Housing, my hon. Friend the Member for Bristol West (Thangam Debbonaire), against the Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronavirus) Regulations 2020. Our concern centres around the impact on those already living in the blocks of flats that will be extended upwards, those who will be moving into those new homes and those on the housing register, who need developers to contribute to schemes to provide vital social and affordable housing.

I am sure that the Minister will say that the issue of the quality of these new homes has been addressed now that councils will consider the adequate provision of light in the extensions, but the fact remains that permitted development has previously allowed what has been classed as “slum housing” to be built without any windows at all. That is disgraceful. A rabbit hutch with large windows is still a rabbit hutch; it is not fit for human habitation. The permitted development system has led to the delivery of homes as small as 13 square metres—smaller than the average living room. For reference, the national guidance for most housing developments states that the minimum internal floor space area should be 37 square metres—just under three times the size of the smallest permitted development homes.

The fact that the Government are continuing the permitted development system without addressing the fact that it bypasses space standards shows that they are not interested in ensuring that housing is fit for habitation; they are seeking only to avoid more headlines about the lack of windows in permitted development homes. Given that we have just come out of a pandemic in which we have rightly asked the public to stay at home, we cannot continue to allow housing to be built that risks the physical and mental health, and the dignity, of the people living in those homes in normal times, let alone when they are asked to be in them for 24 hours a day.

I also have concerns about the impact on existing leaseholders in those blocks. Leasehold Knowledge Partnership and the hon. Member for Worthing West (Sir Peter Bottomley) have raised concerns that this legislation will give a windfall to freeholders while compromising the value of flats owned by leaseholders. It offers no compensation for disruption while the work takes place, and potentially increases the cost to residents who want to buy their freeholds in the future. Given that we also have a broken system of leaseholds—a feudal system of leaseholds—with no legislation or reform in sight, why are the Government introducing an instrument that will exacerbate the problems for leaseholders?

The expansion of permitted development will also increase the number of developments that can bypass schemes that fund affordable housing and the things that we want in our constituencies—GP surgeries, schools, transport and green spaces, through section 106 and the community infrastructure levy. As the Local Government Association noted earlier this year, 13,500 affordable homes have potentially been lost in the past four years as a result of the permitted development rules. Instead of good-quality affordable and social homes that could have been funded by development through the planning system, low-quality slum housing has been propped up in all our constituencies.

Instead of finding ways to get around the current rules, the Government need to build—build, build, build—an alternative that delivers the communities that our constituents want and need. The Government should stop slashing planning departments’ funding and seeing section 106s and the community infrastructure levy as nuisances to be avoided. They can hardly state that that is not their attitude, given the recent Westferry saga.

Given that the draft Building Safety Bill was published today, I find it rather odd that buildings that are clad in flammable materials and have been built without the necessary firebreaks and additional safety measures are being given the green light through this statutory instrument and the Government’s direction to be extended upwards. I look forward to the Minister’s response.

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I am obliged to the Committee for its time, and to the hon. Member for Weaver Vale for his questions and his support in principle for this measure.

The hon. Gentleman mentioned three key points, the first of which was building quality. He is right to suppose that the Secretary of State’s decision was made as a result of conversations that he had with several colleagues, including my right hon. Friend the Member for Harlow (Robert Halfon) and Opposition Members, about requiring that there be appropriate windows and lighting in all habitable rooms with this PDR. That is an important piece of progress that we have made.

I remind the hon. Gentleman that the regulations surrounding the PDRs will still require building regulations to be met. There will still be the prior approval test to be applied in any prior approvals that any local authority might apply. I also remind him that the report that we commissioned on PDRs for conversion, and the quality standards in those conversions, has been under- taken. We look forward to considering the report’s recommendations in due course.

The hon. Gentleman mentioned the rights of lease- holders. As I said in response to my hon. Friend the Member for Poole, leaseholders will certainly have the right to consultation and will be part of the prior approval process. Beyond that, of course, on the question of leasehold reform, the White Paper and the legislation that the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Thornbury and Yate (Luke Hall), will introduce in due course will encompass many of these matters. I am sure that we will debate them again, so I will not dwell on them further now.

Finally, the hon. Gentleman mentioned affordable homes. We reckon that building more homes in this way will be worth about 8,000 extra homes a year that would not otherwise be built. We are providing properties that people want. Housing associations, which own some of these blocks, can build upwards more effectively and provide affordable homes if they wish for their potential tenants. I also point out that if it is appropriate, the extra floor space created might generate CIL payments, which can be contributed towards the local community. The wider planning reforms that my right hon. Friend the Secretary of State is considering will include further consideration of how developer contributions work and what that might mean for our affordable housing programme.

I hope that my remarks have answered the hon. Gentleman’s questions. I look forward to further such collaborations with him in future, and perhaps also the occasional joust. On that note, I commend the regulations to the Committee.

Question put and agreed to.

Committee rose.